Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended JUNE 30, 2010

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

	For the transition period from ______________ to _____________

Commission File Number: 000-50586

MARKETING WORLDWIDE CORPORATION

(Exact name of registrant as specified in its charter)

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

2212 GRAND COMMERCE DR.

HOWELL, MICHIGAN 48855

(Address of principal executive offices)

631-444- 8090

(Registrant's telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year,

if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	¨	Accelerated filer ¨

Non-accelerated filer	¨	Smaller reporting company x
(Do not check if a smaller reporting
company)

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date, August 13, 2010 21,010,091

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

Form 10-Q for the Quarter ended June 30, 2010

Table of Contents

	PAGE

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of June 30, 2010 (unaudited) and September 30, 2009		F-1
Condensed Consolidated Statements of Operations for the three and nine month periods ended June 30, 2010 and 2009 (unaudited)		F-2
Condensed Consolidated Statements of Cash Flows for the nine month periods ended June 30, 2010 and 2009 (unaudited)		F-3
Notes to unaudited Condensed Consolidated Financial Statements		F-4
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		2

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		9

ITEM 4T - CONTROLS AND PROCEDURES

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS		9

ITEM 1A – RISK FACTORS

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		9

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		9

ITEM 5 - OTHER INFORMATION		9

ITEM 6 - EXHIBITS		10

SIGNATURES		12

Page 1

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			September 30,
	2010			2009
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,133		$	113,539
Accounts receivable, net		334,574			737,094
Inventories, net		249,472			543,075
Other current assets		50,701			24,564
Current assets of discontinued operations		-			184,833
Total current assets		658,880			1,603,105

Property, plant and equipment, net		2,631,304			2,903,520

Other assets:
Other intangible assets		57,500			80,000
Capitalized finance costs, net		238,802			337,750
Other assets, net		19,400			19,400
Other assets of discontinued operations		-			178,352
Total other assets		315,702			615,502

Total assets	$	3,605,886		$	5,122,127

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Bank line of credits	$	244,750		$	721,224
Notes payable and capital leases, current portion		1,872,997			1,919,692
Accounts payable		1,229,061			663,586
Warranty liability		66,216			66,216
Interest swap liabilities		108,200			82,075
Due to supplier		195,000			-
Other current liabilities		589,750			325,759
Current liabilities of discontinued operations		492,006			464,229
Total current liabilities		4,797,980			4,242,781

Long term debt:
Derivative liability		1,021,292			-
Capital leases, long term		-			21,247

Total liabilities		5,819,272			4,264,028

Series A convertible preferred stock, $0.001 par value; 3,500,000 shares issued and outstanding		3,499,950			3,499,950

Stockholders' Deficiency
Series B convertible preferred stock, $0.001 par value, 10,000,000 authorized; 1,192,308 shares issued and outstanding as of June 30, 2010 and September 30, 2009		1,192			1,192
Common stock, $0.001 par value, 100,000,000 shares authorized; 21,010,091 and 17,835,091 shares issued and outstanding as of June 30, 2010 and September 30, 2009, respectively		21,010			17,835
Additional paid in capital		8,190,379			9,639,388
Deficit		(13,725,835	)		(12,154,087	)
Accumulated other comprehensive loss		(148,873	)		(107,929	)
Total Marketing Worldwide Corporation stockholders' deficiency		(5,662,127	)		(2,603,601	)
Non controlling interest		(51,209	)		(38,250	)
Total stockholders' deficiency		(5,713,336	)		(2,641,851	)

Total Liabilities and Stockholders' Deficiency	$	3,605,886		$	5,122,127

See the accompanying notes to the unaudited condensed consolidated financial statements

F-1

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended June 30,						Nine months ended June 30,
	2010			2009			2010			2009
Revenue	$	1,051,495		$	834,406		$	3,223,922		$	2,541,087

Total cost of sales		581,319			389,837			2,071,116			1,433,674

Gross profit		470,176			444,569			1,152,806			1,107,413

Operating expenses:
Selling, general and administrative expenses		732,102			731,709			2,839,603			2,475,989

Loss from operations		(261,926	)		(287,140	)		(1,686,797	)		(1,368,576	)

Gain on change in fair value of derivative liability		994,018			-			949,823			-
Financing expenses		(84,367	)		(33,382	)		(290,208	)		(214,857	)
Other income (expense), net		75,916			24,464			83,743			44,182

Income (Loss) from continuing operations		723,641			(296,058	)		(943,439	)		(1,539,251	)

Loss from discontinued operations		(27,789	)		(143,787	)		(405,017	)		(579,381	)

Net Income (Loss)		695,852			(439,845	)		(1,348,456	)		(2,118,632	)

Income (loss) attributable to Non-controlling interest		5,835			-			(12,959	)		44,298

Income (loss) attributable to Company		690,017			(439,845	)		(1,335,497	)		(2,162,930	)

Preferred stock dividend		(78,750	)		(78,750	)		(236,250	)		(236,250	)

NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS	$	611,267		$	(518,595	)	$	(1,571,747	)	$	(2,399,180	)

Income (loss) per common share, basic:
Continuing operations	$	0.03		$	(0.02	)	$	(0.06	)	$	(0.11	)
Discontinued operations		(0.00	)		(0.01	)		(0.02	)		(0.03	)
Total	$	0.03		$	(0.03	)	$	(0.08	)	$	(0.14	)

Income (loss) per common share, fully diluted
Continuing operations	$	0.02		$	(0.02	)	$	(0.06	)	$	(0.11	)
Discontinued operations		(0.00	)		(0.01	)		(0.02	)		(0.03	)
Total	$	0.02		$	(0.03	)	$	(0.08	)	$	(0.14	)

Weighted average common stock outstanding
Basic		21,010,091			17,168,003			19,577,509			16,903,278
Fully Diluted		42,299,817			17,168,003			19,577,509			16,903,278

Comprehensive loss:
Net Income (loss)	$	695,852		$	(439,845	)	$	(1,348,456	)	$	(2,118,632	)
Foreign currency translation, loss		(13,488	)		(43,902	)		(40,944	)		(45,940	)

Comprehensive income (loss)		682,364			(483,747	)		(1,389,400	)		(2,164,572	)
Comprehensive income (loss) attributable to non controlling interest		5,835			-			(12,959	)		44,298
Comprehensive income (loss) attributable to Marketing Worldwide Corporation	$	676,529		$	(483,747	)	$	(1,376,441	)	$	(2,208,870	)

See the accompanying notes to the unaudited condensed consolidated financial statements

F-2

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JUNE 30, 2010 AND 2009

(unaudited)

	2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to continuing operations	$	(943,439	)	$	(1,539,251	)
Loss from discontinued operations		(405,017	)		(579,381	)
Adjustments to reconcile net loss to cash provided by (used in) operations:
Depreciation and amortization		331,222			310,903
					-
Amortization of deferred financing costs		98,948			98,948
Beneficial conversion feature attributable to convertible debt		6,250			-
Loss on disposal of property, plant and equipment		10,617
Change in fair value of derivative liability		(949,823	)		-
Fair value of vested employee options		5,831			109,779
Common stock issued for services rendered		434,250			61,500
Changes in operating assets and liabilities:
Accounts receivable		402,520			268,140
Inventory		293,603			154,636
Other current assets		(26,137	)		268,150
Other assets		-			20
Accounts payable		711,374			(301,397	)
Other current liabilities		181,916			(201,103	)
Cash provided by (used in) continuing operating activities		152,115			(1,349,056	)
Cash provided by discontinued operating operations		241,960			528,294
Net cash provided by (used in) operating activities:		394,075			(820,762	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, continuing operations		(47,123	)		(9,084	)
Cash provided by (used) in discontinued investing activities		149,002			(23,665	)
Net cash provided by (used in) investing activities:		101,879			(32,749	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution by non controlling entity		-			(90,000	)
Proceeds (repayments of) from lines of credit		(476,474	)		234,790
Proceeds from promissory note		25,000			-
Repayments of notes payable and capital leases		(92,942	)		(79,724	)
Cash (used in) provided by continuing financing activities		(544,416	)		65,066
Cash provided by discontinued financing activities		-			2,050
Net cash (used in) provided by financing activities		(544,416	)		67,116

Effect of currency rate change on cash:		(40,944	)		(45,940	)

Net decrease in cash and cash equivalents		(89,406	)		(832,335	)
Cash and cash equivalents, beginning of period		113,539			1,003,071

Cash and cash equivalents, end of period	$	24,133		$	170,736

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for interest	$	251,433		$	139,322

NON-CASH TRANSACTIONS:
Common stock issued in settlement of debt	$	78,950		$	-
Common stock issued for services rendered	$	434,250		$	80,000
Common stock issued for dividend payments	$	-		$	236,250

See the accompanying notes to the unaudited condensed consolidated financial statements

F-3

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Operations

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

Basis of presentation

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

In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair presentation have been included. Accordingly, the results from operations for the nine month period ended June 30, 2010, are not necessarily indicative of the results that may be expected for the year ended September 30, 2010. The unaudited condensed consolidated financial statements should be read in conjunction with the September 30, 2009 financial statements and footnotes thereto included in the Company's SEC Form 10-K. The Company has evaluated and included subsequent events through the filing date of this Form 10-Q.

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

NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

For revenue from products and services, the Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”). ASC 605-10 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered/services rendered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

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

F-4

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

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

Inventories

The inventory are stated at the lower of cost (first in, first out) or net realizable value and majority of the inventory consists of work in process goods available for sale. The Company purchases the merchandise on delivered duty paid basis. The amounts for cost of goods sold during the three and nine month periods ended June 30, 2010 and 2009 are removed from inventory on weighted average cost method.

Net income (loss) per share

Basic and diluted loss per common share is based upon the weighted average number of common shares outstanding during the fiscal year computed under the provisions of Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). However, diluted net (loss) per share for the nine month periods ended June 30, 2010 and 2009 do not reflect the effects of 21,289,726 and 18,335,091 shares potentially issuable upon conversion of our convertible preferred shares and convertible debt as of June 30, 2010 and 2009, respectively, and 1,000,000 and 1,490,000 shares potentially issuable upon the exercise of the Company's stock options and warrants (calculated using the treasury stock method) as of June 30, 2010 and 2009, respectively. These were not considered for the three and nine month periods ended June 30, 2010 and 2009, respectively, as they would have been anti-dilutive.

Comprehensive Income (Loss)

The Company adopted Statement of Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”). ASC 220-10 establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments and unrealized gains and losses on available for sale securities.

F-5

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Effect of Related Prospective Accounting Pronouncement

Effective October 1, 2009 and in accordance with Accounting Standards Codification subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC 815-40”), the Company initially recorded the derivative liability of $1,971,115 with respect to the reset provision of its Preferred Stock using the Black-Scholes formula assuming no dividends, a risk-free interest rate of 1.36%, expected volatility of 265.79%, and expected life of 2.56 years. Changes in fair value are recorded as non-operating, non-cash income or expense at each reporting date.

The fair value of the reset provision of $1,021,292 at June 30, 2010 was determined using the Black Scholes Option Pricing Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	361.60	%
Risk free rate:	0.61	%

As of the date of the financial statements, the Company believes an event under the contract that would create an obligation to settle in cash or other current assets is remote and has classified the obligation as a long term liability.

The change in fair value of the derivative liability resulted in a current period non operating gain to operations of $994,018 and $949,823 for the three and nine month periods ended June 30, 2010.

Reclassification

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

Accounting for variable interest entities

Accounting Standards Codification subtopic 810-10, Consolidation (“ASC 810-10”) discusses certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity risk for the entity to finance its activities without additional subordinated financial support. ASC 810-10 requires the consolidation of these entities, known as variable interest entities, by the primary beneficiary of the entity. The primary beneficiary is the entity, if any, that will absorb a majority of the entities expected losses, receive a majority of the entity's expected residual returns, or both.

Pursuant to the effective date of a related party lease obligation, the Company adopted ASC 810-10. This resulted in the consolidation of one variable interest entity (VIE) of which the Company is considered the primary beneficiary. The Company's variable interest in this VIE is the result of providing certain secured debt mortgage guarantees on behalf of a limited liability company that leases warehouse and general offices located in the city of Howell, Michigan. As a result the Company recorded the equity of this VIE as a non controlling interest in the financial statements.

F-6

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Implementation of Accounting Standards Codification subtopic 810-10, Consolidation (“ASC 810-10”)

Effective October 1, 2009, the Company adopted the provisions of ASC 810-10. Pursuant to ASC 810-10, the following provisions were applied retrospectively to all periods presented in the financial statements:

The Company reclassified noncontrolling interests, formerly known as “minority interests,” from a separate caption between liabilities and stockholders’ equity (“mezzanine section”) to a component of equity Previously, minority interests generally were reported in the balance sheet in the mezzanine section.

Consolidated net income and comprehensive income include amounts attributable to both the Company and the noncontrolling interests. Previously, net income attributable to the noncontrolling interests was reported as a deduction in arriving at consolidated net income. This presentation change does not impact the calculation of basic or diluted earnings per share, which continue to be calculated based on Net income attributable to the Company.

Pursuant to ASC 810-10, the following provisions were applied prospectively effective October 1, 2009:

ASC 810-10 provides that all earnings and losses of a subsidiary should be attributed to the parent and the noncontrolling interest, even if the losses attributable to the noncontrolling interest result in a deficit noncontrolling interest balance. Previously, any losses exceeding the noncontrolling interest’s investment in the subsidiary were attributed to the parent. This change did not have a significant impact on the Company’s condensed consolidated financial statements for the three and nine month period ended June 30, 2010.

Recent accounting pronouncements

In March 2010, the FASB issued new accounting guidance, under ASC Topic 605 on Revenue Recognition. This standard provides that the milestone method is a valid application of the proportional performance model for revenue recognition if the milestones are substantive and there is substantive uncertainty about whether the milestones will be achieved. Determining whether a milestone is substantive requires judgment that should be made at the inception of the arrangement. To meet the definition of a substantive milestone, the consideration earned by achieving the milestone (1) would have to be commensurate with either the level of effort required to achieve the milestone or the enhancement in the value of the item delivered, (2) would have to relate solely to past performance, and (3) should be reasonable relative to all deliverables and payment terms in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. The standard is effective for interim and annual periods beginning on or after June 15, 2010. The Company is currently evaluating the impact the adoption of this guidance will have on its financial statements.

F-7

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (Continued)

In May 2010, the FASB issued Accounting Standards Update No. 2010-19, “Foreign Currency Issues: Multiple Foreign Currency Exchange Rates.” The guidance provides clarification of accounting treatment when reported balances in an entity’s financial statements differ from their underlying U.S. dollar denominated values due to different rates being used for remeasurement and translation. The guidance indicates that upon adopting highly inflationary accounting for Venezuela, since the U.S. dollar is now the functional currency of a Venezuelan subsidiary, there should no longer be any differences between the amounts reported for financial reporting purposes and the amount of any underlying U.S. dollar denominated value held by the subsidiary. Therefore, any differences between these should either be recognized in the income statement or as a cumulative translation adjustment, if the difference was previously recognized as a cumulative translation adjustment. The adoption of this standard did not have any impact on the Company’s consolidated financial position and results of operations.

In April 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-13, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”). ASU 2010-13 addresses the classification of a share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. FASB Accounting Standards Codification (“ASC”) Topic 718 was amended to clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade shall not be considered to contain a market, performance or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies for equity classification. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.

F-8

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE C - GOING CONCERN MATTERS AND TRIGGERING EVENTS

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements during the nine month period ended June 30, 2010, the Company incurred a loss of $1,571,747.

On January 27, 2009, the primary secured lender notified the Company that the Company was in default of its obligations under the commercial mortgage loan secured by first deed of trust on real property to JCMD Properties, LLC. The notification is declaring the debt obligations in default and is therefore entitling the lender to exercise certain rights and remedies, including but not limited to, increasing the interest rate to the default rate and demanding immediate repayment in full of the principal, interest and interest swap outstanding liability.

The Company has reduced cash required for operations by reducing operating costs and reducing staff levels. In addition, the Company is working to manage its current liabilities while it continues to make changes in operations to improve its cash flow and liquidity position. An estimated $2,000,000 is needed over the next 12 months for operational and program development purposes.

The Company's existence is dependent upon management's ability to raise additional financing and develop profitable operations. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. These unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE D - LINE OF CREDIT

In August 2009, Marketing Worldwide, LLC entered into a financing agreement with Summit Financial Resources L.P. (Summit) for a maximum borrowing of up to $750,000 maturing August 31, 2010. The arrangement is based on recourse factoring of the Company’s accounts receivables. Substantially all assets of Marketing Worldwide, LLC have been pledged as collateral for the Summit facility. Marketing Worldwide Corp has guaranteed the financing arrangement. The Summit agreement contains a 60 day notice before termination. Neither the Company or Summit has provided any type of notice to terminate the agreement. Absent any notification to terminate, the existing agreement will automatically renew.

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

F-9

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE D - LINE OF CREDIT (continued)

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

The interest rate at June 30, 2010 was 4.25%

Under the terms of the recourse provision, the Company is required to repurchase factored receivables if they are not paid in full or are deemed no longer acceptable. Accordingly, the Company has accounted for the financing agreement as a secured borrowing arrangement and not a sale of financial assets.

As of June 30, 2010, the advance balance due to Summit was $244,750.

NOTE E - NOTES PAYABLE AND CAPITAL LEASES

As of June 30, 2010 and September 30, 2009, notes payable consists of the following:

	June 30, 2010		September 30, 2009
JCMD Mortgage loan payable in monthly principal installments plus interest. Note secured by first deed of trust on real property and improvements located in Howell, MI. The JCMD General Partners personally guarantee the loan. The note is in default. (*)	$	669,352	$	683,165

JCMD Mortgage loan payable in 240 monthly principal installments plus interest. The loan is secured by a second deed of trust on real property and improvements located in Howell, MI. The JCMD General Partners personally guarantee the loan The note is in default. (*)		538,800		551,850

Mortgage loan payable in monthly principal installments of $5,633 with a fixed interest rate of 5.98% per annum. Note based on a 20 year amortization. Note is secured by first priority security interest in the business property of Colortek, Inc, the Company's wholly owned subsidiary. The note is currently in default. (**)		623,281		644,129

Notes payable in monthly payments of $1,857.54 per month including interest at 7.25% per annum, unsecured		11,847		24,218

Capital leases, net		4,717		16,330

Convertible promissory note, due on demand with interest rate of 5% per annum, convertible into shares of the Company’s common stock at 80% discount to market at the date of conversion, but in no event , lower than $0.07 per share, unsecured		25,000		-
		1,872,997		1,919,692
Less current portion		1,872,997		1,919,692
Long term portion	$	-0-	$	-0-

F-10

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - NOTES PAYABLE (continued)

(*) In accordance with the Forbearance Agreement, the secured lender of the JCMD Mortgage Loans increased the interest rate on unpaid balances to bear interest at a floating rate of two and quarter percent (2.25%) in excess of the Bank’s Prime Rate, and upon default shall bear interest at a rate of five and one quarter percent (5.25%) in excess of the Bank’s Prime Rate. At June 30, 2010, the effective rate of interest on these loans was 8.25%

(**) In accordance with the mortgage loan agreement, the Company (as guarantor) is currently in default of certain loan covenants.

NOTE F – OTHER CURRENT LIABILITIES

Other current liabilities consist of the following at June 30, 2010 and September 30, 2009:

	June 30, 2010		September 30, 2009

Dividends payable	$	392,250	$	157,500
Consulting fees		103,200		76,600
Payroll and other miscellaneous		94,300		91,659
Total	$	589,750	$	325,759

NOTE G - CAPITAL STOCK

The Company is authorized to issue 110,000,000 shares of which stock 100,000,000 shares at par value of $.001 each shall be common stock and 10,000,000 shares at par value of $.001 each shall be preferred stock.

As of June 30, 2010 and September 30, 2009, the Company has issued and outstanding 3,500,000 shares of Series A preferred stock, 1,192,308 Series B preferred stock and 21,010,091 and 17,835,091 shares of common stock, respectively.

PAYMENT OF DIVIDENDS. Commencing on the date of issuance of the Series A Preferred Stock, the holders of record of shares of Series A Preferred Stock shall be entitled to receive, out of any assets at the time legally available therefore and as declared by the Board of Directors, dividends at the rate of nine percent (9%) of the stated Liquidation Preference Amount (see below) per share per annum, payable quarterly. At June 30, 2010 and September 30, 2009, a total of $393,750 and $157,500 has been accrued for dividends payable on the Series A Preferred stock.

As additional consideration for the purchase of the Series A Preferred Stock, the Company granted to the holders warrants entitling them to purchase 11,000,000 common shares of the Company's common stock at the price of $0.70 per share, 6,000,000 at $0.85 per share and 6,000,000 at $1.20 per share. The underlying A, B & C warrants lapse if not exercised by April 23, 2012.

In accordance with Accounting Standards Codification subtopic 470-20, Debt, Debt with Conversions and Other Options (“ASC 470-20”), the Company recognized an imbedded beneficial conversion feature present in the Convertible Series A Preferred Stock. The Company allocated a portion of the proceeds equal to the fair value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $3,500,000 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a charge as preferred stock dividend. The fair value of the warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions: Dividend yield: $-0-; Volatility: 146.64%, risk free rate: 4.55%.

The Series A Preferred Stock includes certain redemption features allowing the holders the right, at the holder’s option, to require the Company to redeem all or a portion of the holder’s shares of Series A Preferred Stock upon the occurrence of a Major Transaction or Triggering Event. Major Transaction is defined as a consolidation or merger; sale or transfer of more than 50% of the Company assets or transfer of more than 50% of the Company’s common stock. A Triggering Event is defined as a lapse in the effectiveness of the related registration statement; suspension from listing; failure to honor for conversion or going private.

F-11

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE G - CAPITAL STOCK (continued)

In accordance with ASC 470-20, the Company has classified the Series A Preferred Stock outside of permanent equity.

In addition, The Series A Preferred Stock has reset provisions to the exercise price if the Company issues equity at a price less than the exercise price and therefore, as described in Note B above, and in accordance with ASC 815-40 the Company determined the fair value of the initial reset provision of $1,971,115 at October 1, 2009 and reclassified to liability using the Black-Scholes formula assuming no dividends, a risk-free interest rate of 1.36%, expected volatility of 265.79%, and expected life of 2.56 years. The net value of the reset provision at the date of adoption of ASC 815-40 was recorded as a derivative liability. Changes in fair value are recorded as non-operating, non-cash income or expense at each reporting date.

The fair value of the reset provision of $1,021,292 at June 30, 2010 was determined using the Black Scholes Option Pricing Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	361.60	%
Risk free rate:	0.61	%

The change in fair value of the derivative liability resulted in a non operating gain to operations of $994,018 and $949,823 for the three and nine months ended June 30, 2010, respectively.

Series B Preferred stock

On July 10, 2008, the Company filed a Certificate of Designation creating a $0.001 par value Series B Convertible Preferred stock for 1,200,000 shares.

RANK. The Series B Preferred Stock shall rank pari passu as to liquidation rights and other matters to the Company's common stock, par value $0.001 per share (the "COMMON STOCK"). The Series B Preferred Stock shall be subordinate to and rank junior to all indebtedness of the Company now or hereafter outstanding.

PAYMENT OF DIVIDENDS. If declared by the Company, dividends on the Series B Preferred Stock shall be on a pro rata basis with the Common Stock and all other equity securities of the Company ranking pari passu with the Common Stock as to the payment of dividends.

VOTING RIGHTS. The holders of Series B Preferred Stock shall have no voting rights with the exception relating to increasing the number of outstanding shares of Series A Preferred or modifying the rights of the Series A Preferred Stock.

LIQUIDATION AMOUNT. In the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of shares of Series B Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company available for Distribution to its stockholders, an amount per share of Series B Preferred Stock equal to the amount distributable with respect to that number of shares of the Common Stock into which one share of the Series B Preferred Stock is then convertible, plus any accrued and unpaid dividends.

F-12

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE G - CAPITAL STOCK (continued)

CONVERSION. At any time on or after the date of the initial issuance of the Series B Preferred Stock, the holder of any such shares of Series B Preferred Stock may, at such holder's option, elect to convert all or any portion of the shares of Series B Preferred Stock held into a number of fully paid and non-assessable shares of Common Stock for each such share of Series B Preferred Stock equal to the quotient of: (a) the Original Issue Price, plus any accrued and unpaid dividends thereon, divided by (b) the Conversion Price in effect as of the date of the delivery by such holder of its notice of election to convert. The initial Conversion Price is $16.90, subject to change for events such as stock splits.

On July 11, 2008, the Company entered an Exchange Agreement with holders of Series F Common Stock Purchase Warrants and Series J Common Stock Purchase Warrants. Under the Exchange Agreement, the Company issued 750,000 shares of Series B Convertible Preferred Stock for the cancellation of 3,500,000 Series A Common Stock Purchase Warrants, 3,500,000 Series B Common Stock Purchase Warrants, 3,500,000 Series C Common Stock Purchase Warrants, 2,500,000 Series D Common Stock Purchase Warrants, and 2,500,000 Series E Common Stock Purchase Warrants. In addition, holders exercised 1,000,000 Series J Warrants and 2,500,000 Series F Warrants for $525,000 in exchange for 442,308 shares of Series B Convertible Preferred Stock.

As of June 30, 2010, the Company has 1,192,308 shares of Series B Preferred Stock outstanding.

Common stock

On October 9, 2009, the Company issued 500,000 shares of common stock in settlement of outstanding accounts payable of $78,950.

On October 9, 2009, the Company issued an aggregate of 80,000 shares of common stock in exchange for services valued at $12,000. These shares were valued at $0.15 per share which represents the fair value of services received which did not differ materially from the value of the stock issued.

On February 17, 2010, the Company issued an aggregate of 1,520,000 shares of common stock in exchange for services valued at $304,000. These shares were valued at $0.20 per share which represents the fair value of services received which did not differ materially from the value of the stock issued.

On March 10, 2010, the Company issued an aggregate of 1,075,000 shares of common stock in exchange for services valued at $118,250. These shares were valued at $0.11 per share which represents the fair value of services received which did not differ materially from the value of the stock issued.

F-13

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - STOCK OPTIONS AND WARRANTS

Employee Stock Options

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company's common stock issued to employees of the Company as of June 30, 2010:

						Options Exercisable
				Options Outstanding		Weighted
				Weighted Average		Average		Weighted
Exercise		Number		Remaining Contractual		Exercise		Number		Average
Price		Outstanding		Life (Years)		Price		Exercisable		Exercise Price
$	0.26		490,000		3.01	$	0.26		430,000	$	0.26
$	0.45		170,000		3.90	$	0.45		170,000	$	0.45
			660,000		3.25	$	0.31		600,000	$	0.32

Transactions involving options issued to employees are summarized as follows:

	Number of Options		Weighted Average Exercise Price per Share		Intrinsic Value Per Share
Outstanding, September 30, 2009		660,000		0.31	$	0.00
Granted		-		-
Exercised		-		-
Canceled or expired		-		-
Outstanding, June 30, 2010		660,000	$	0.31	$	0.00
Exercisable, June 30, 2010		600,000	$	0.32	$

The weighted average fair value of the options on the date of grant, using the fair value based methodology of the nine months ended June 30, 2010 and 2009 was $-0- and $-0-.

The Company recorded as current period expenses the vested portions of the above employee options of $1,944 and $17,196 for the three month periods ended June 30, 2010 and 2009, respectively, and $5,831 and $109,779 for the nine month periods ended June 30, 2010 and 2009. As of June 30, 2010, total unamortized value of stock options held by employees was $7,028.

At June 30, 2010, the unamortized portion will be expensed over a weighted average period of 0.92 years.

F-14

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - STOCK OPTIONS AND WARRANTS (continued)

Non employee options

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company's common stock issued to non- employees of the Company as of June 30, 2010:

Options Outstanding

Options Exercisable

Weighted Average

Remaining

Weighted

Average

Weighted

Number

Contractual

Exercise

Number

Average

Exercise Price

Outstanding

Life (Years)

Price

Exercisable

Exercise Price

0.10

1,000,000

2.25

0.10

1,000,000

0.10

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

	Number of Options		Weighted Average Exercise Price per Share		Intrinsic Value
Outstanding, September 30, 2009		1,000,000		0.10	$	0.00
Granted
Exercised		-		-
Canceled or expired		-		-

Outstanding, June 30, 2010		1,000,000	$	0.10		0.00
Exercisable, June 30, 2010		1,000,000	$	0.10

Warrants

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company's common stock issued to non-employees of the Company as of June 30, 2010:

Warrants Outstanding

Warrants Exercisable

Weighted Average

Remaining

Weighted

Average

Weighted

Number

Contractual

Exercise

Number

Average

Exercise Price

Outstanding

Life (Years)

Price

Exercisable

Exercise Price

0.30

100,000

1.19

0.30

100,000

0.30

F-15

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - STOCK OPTIONS AND WARRANTS (continued)

Transactions involving warrants are summarized as follows:

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

NOTE I - CONSOLIDATION OF VARIABLE INTEREST ENTITIES

On June 6, 2005 and August 8, 2005, JCMD Properties LLC, an entity controlled by the Company's Chief Executive and Chief Operating officers respectively ("JCMD"), entered into a Secured Loan Agreement with a financial institution, in connection with the financing of real property and improvements ("property"). This agreement is guaranteed by the Company.

The property is leased to the Company under a long term operating lease beginning on January 1, 2005. Under the loan agreements, JCMD is obligated to make periodic payments of principal repayments and interest. The Company has no equity interest in JCMD or the property.

Based on the terms of the lending agreement with the above entity, the Company determined that JCMD was a variable interest entity ("VIE") and the Company was the primary beneficiary under ASC 810-10 since JCMD does not have sufficient equity at risk for the entity to finance its activities.

ASC 810-10 requires that an enterprise consolidate a VIE if that enterprise has a variable interest that will absorb a majority of the entity's expected losses if they occur. Accordingly, the Company consolidated JCMD as a VIE, regardless of the Company not having an equity interest in JCMD.

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

F-16

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE I - CONSOLIDATION OF VARIABLE INTEREST ENTITIES (continued)

	June 30, 2010			September 30, 2009
ASSETS (JCMD)
Cash and cash equivalents	$	755		$	17,616
Accounts receivable, prepaid expenses and other current assets		80,000			19,400
Total current assets		80,755			37,016
Property, plant and equipment, net		1,237,223			1,241,824
Total assets		1,317,978			1,278,840

LIABILITIES:
Current portion of long term debt		1,208,152			1,235,015
Accounts payable and accrued liabilities		161,035			82,075
Total current liabilities		1,369,187			1,317,090
Long term debt					-
Total liabilities		1,369,187			1,317,090
Net assets	$	(51,209	)	$	(38,250	)
		1,317,978			1,278,840

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

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

Operating income -Real estate	$	5,835	$

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

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

Operating loss-Real estate	$	(12,959)	$	(49,019	)

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

F-17

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE J - DERIVATIVE FINANCIAL INSTRUMENTS

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

NOTE K - FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

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

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

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

F-18

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Balance, June 30, 2010	$	98,057	$	1,021,292

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

NOTE L – DISCONTINUED OPERATIONS

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

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

Assets:

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

F-19

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE L – DISCONTINUED OPERATIONS (continued)

Liabilities:

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

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

	June 30, 2010			June 30, 2009
Sales	$	-		$	177,119
Cost of sales		-			160,025
Gross profit		-			17,094

Operating expenses:
Selling, general and administrative		-			153,457
Depreciation and amortization		-			10,870
Total operating costs		-			164,327
Net loss from operations		-			(147,233	)

Other (loss) income		(27,789	)		3,446
Net loss	$	(27,789	)	$	(143,787	)

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

	June 30, 2010			June 30, 2009
Sales	$	316,110		$	492,976
Cost of sales		266,556			601,596
Gross profit (loss)		49,554			(108,620	)

Operating expenses:
Selling, general and administrative		153,543			449,849
Depreciation and amortization		11,639			31,320
Total operating costs		165,182			481,169
Net loss from operations		(115,628	)		(589,789	)

Other (loss) income		(289,389	)		10,408
Net loss	$	(405,017	)	$	(579,381	)

F-20

MARKETING WORLDWIDE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE M – SUBSEQUENT EVENTS

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

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

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

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

F-21

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

THIS REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS IN THIS REPORT ARE INDICATED BY WORDS SUCH AS "ANTICIPATES," "EXPECTS," "BELIEVES," "INTENDS," "PLANS," "ESTIMATES," "PROJECTS" AND SIMILAR EXPRESSIONS. THESE STATEMENTS REPRESENT OUR EXPECTATIONS BASED ON CURRENT INFORMATION AND ASSUMPTIONS. FORWARD-LOOKING STATEMENTS ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE WHICH ARE ANTICIPATED OR PROJECTED AS A RESULT OF CERTAIN RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO A NUMBER OF FACTORS, SUCH AS ECONOMIC AND MARKET CONDITIONS; THE PERFORMANCE OF THE AUTOMOTIVE AFTERMARKET SECTOR; CHANGES IN BUSINESS RELATIONSHIPS WITH OUR MAJOR CUSTOMERS AND IN THE TIMING, SIZE AND CONTINUATION OF OUR CUSTOMERS' PROGRAMS; THE ABILITY OF OUR CUSTOMERS TO ACHIEVE THEIR PROJECTED SALES; COMPETITIVE PRODUCT AND PRICING PRESSURES; INCREASES IN PRODUCTION OR MATERIAL COSTS THAT CANNOT BE RECOUPED IN PRODUCT PRICING; SUCCESSFUL INTEGRATION OF ACQUIRED BUSINESSES; PRODUCT LIABILITY, AS WELL AS OTHER RISKS AND UNCERTAINTIES, SUCH AS THOSE DESCRIBED

UNDER QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK AND THOSE DETAILED HEREIN AND FROM TIME TO TIME IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. THOSE FORWARD-LOOKING STATEMENTS ARE MADE ONLY AS OF THE DATE HEREOF, AND WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE THE FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, INCLUDED ELSEWHERE IN THIS FORM 10-Q

BUSINESS OVERVIEW

Marketing Worldwide Corporation (“MWW” or the "Company"), was incorporated under the laws of the State of Delaware in July 2003. The Company is engaged, through its wholly-owned subsidiary, Marketing Worldwide LLC ("MWWLLC").

MWW is a full service design, engineering and manufacturing firm of original equipment manufacturer ("OEM") components in the automotive accessory market. MWW provides a number of large foreign and domestic automobile manufacturers' and independently owned vehicle processing and distribution centers in the US, Canada and Europe with MWW's components directly at their respective locations. At the instruction of MWW, the vehicle processing centers' technical teams install MWW's accessory products on new automobiles, as soon as these new vehicles arrive from foreign or domestic automobile manufacturers at their centers. From the vehicle processing or distribution centers the accessorized automobiles are then delivered into the domestic car dealer distribution systems throughout the Continental US, Canada and Europe. MWW's relationship is solely with the vehicle processing and/or distribution centers, which also pay for MWW's products.

Since its inception, the continuously increasing demand for the Company's products and services has prompted an ongoing expansion of MWW's infrastructure and staff and warranted the diversification and expansion of its activities into the design and engineering of its products in the US and Europe. The Company has also continued to increase vertical integration in manufacturing, in order to address newly arising market opportunities. Drawing from the experience of its principals, consultants and management team, strategically utilizing longstanding relationships in the industry, the Company has steadily expanded its design services, product range, client and employees/contractor base and is currently aggressively pursuing the expansion of its client roster, in addition to its existing major clients such as South East Toyota, Gulf States Toyota and Toyota Canada. In its effort for more vertical integration, the Company has acquired Colortek, a "Class A" painting facility in Baroda, Michigan.

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The Company has established initial relationships with several new major foreign and domestic automobile manufacturers, has recently begun delivering accessory programs to KIA Motors America and has received additional Request for Quotes from Toyota's Scion Group, KIA Motors America, MOBIS (KIA and Hyundai Worldwide) and Nissan. MWW has been delivering product directly to the Toyota Motor Manufacturing Corporation assembly plant in Canada for nearly twenty six (26) months and has been awarded new programs to be delivered to Toyota Canada International. We are in various stages of seeking to provide our accessory programs to other major foreign and domestic automobile manufacturers such as Ford, GM, Nissan, Subaru and Hyundai in the US.

SEASONALITY. Historically, our operating results have fluctuated by quarter to quarter, with the greatest sales occurring in the quarters of the fiscal year with the largest number of automobile manufacturers new model releases. Revenues are generally being recognized at the time of product shipment. It is in these quarters of new model releases that demand for our products is typically the highest. As we expand our business globally, we expect to better able to mitigate these impacts.

The limited seasonality of our business offers significant operational challenges in our manufacturing and distribution functions, based on a partial dependency on manufacturing abroad. To limit these challenges and to provide a rapid turnaround time of customer orders, we traditionally keep somewhat higher inventory levels. New strategies to decrease inventory and improve inventory turns over rates are currently being implemented. Utilizing the synergies between our newly acquired companies and the utilization of the newly created manufacturing capacities here in the US that are now controlled by us, we are expecting to produce higher levels of efficiency over time.

CORPORATE DEVELOPMENTS

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

The independent auditors report on our September 30, 2009 financial statements states that our difficulty in generating sufficient cash flow to meet our obligations and sustain operations raise substantial doubts about the our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

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

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

RESULTS OF OPERATIONS

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

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

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

OPERATING EXPENSES

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

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

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

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

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

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

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

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

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

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

OPERATING EXPENSES

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

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

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

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

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

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

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

CRITICAL ACCOUNTING POLICIES

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

Accounting for variable interest entities

Revenue recognition

Inventories

Allowance for doubtful accounts

Stock based compensation

Derivative liability

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ACCOUNTING FOR VARIABLE INTEREST ENTITIES

Pursuant to the effective date of a related party lease obligation, the Company adopted ASC 810-10. This resulted in the consolidation of one variable interest entity (VIE) of which the Company is considered the primary beneficiary. The Company’s variable interest in this VIE is the result of providing certain secured debt mortgage guarantees on behalf of a limited liability company that leases warehouse and general offices located in the city of Howell, Michigan.

REVENUE RECOGNITION

For revenue from products and services, the Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”). ASC 605-10 requires that four basic criteria must be met before revenue can be recognized; (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered/services rendered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

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

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

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INVENTORIES

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

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

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

Our reserves are also based on amounts determined by using percentages applied to certain aged receivable categories. These percentages are determined by a variety of factors including, but are not limited to, current economic trends, historical payment and bad debt write-off experience. We are not able to predict changes in the financial condition of our customers and if circumstances related to our customers deteriorate, our estimates of the recoverability of our receivables could be materially affected and we may be required to record additional allowances. Alternatively, if we provided more allowances than are ultimately required, we may reverse a portion of such provisions in future periods based on our actual collection experience. The allowance for doubtful accounts was $19,751 and $131,458 at June 30, 2010 and at September 30, 2009, respectively.

STOCK-BASED COMPENSATION

The Company has adopted the fair value provisions for share-based awards pursuant to ASC 718-10, using the modified-prospective-transition method. Under that transition method, compensation cost recognized in 2006 includes (a) compensation cost for all share-based awards granted prior to, but not yet vested as of January 1, 2006, based on the attribution method and grant date fair value estimated in accordance with the original provisions of ASC 718-10, and (b) compensation cost for all share-based awards granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10, all recognized on a straight line basis as the requisite service periods are rendered.

DERIVATIVE LIABILTY

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

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

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

a) Evaluation of Disclosure Controls and Procedures. As of June 30, 2010, the Company's management carried out an evaluation, under the supervision of the Company's Chief Executive Officer and the Chief Financial Officer of the effectiveness of the design and operation of the Company's system of disclosure controls and procedures pursuant to the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses previously found in our internal controls, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

b) Changes in internal controls. There were no changes in internal controls over financial reporting, known to the Chief Executive Officer or Chief Financial Officer that occurred during the period covered by this report that has materially affected, or is likely to materially effect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no current legal proceedings.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

(a) EXHIBIT(S) DESCRIPTION

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

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

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

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

(5) Opinion on Legality *****

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MARKETING WORLDWIDE CORPORATION

BY:	/s/ MICHAEL WINZKOWSKI
	NAME: MICHAEL WINZKOWSKI
	TITLE: CHIEF EXECUTIVE OFFICER
	Date: August 17, 2010

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

BY:	/s/ MICHAEL WINZKOWSKI
	NAME: MICHAEL WINZKOWSKI
	TITLE: CHIEF EXECUTIVE OFFICER,
	SECRETARY AND DIRECTOR
	Date: August 17, 2010

BY:	/s/ JAMES E. DAVIS
	NAME: JAMES E. DAVIS
	TITLE: CHIEF FINANCIAL OFFICER
	AND DIRECTOR
	Date: August 17, 2010

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