UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x Annual Report Under Section 13 or 15(d) of the Securities Exchange Act

of 1934 For the fiscal year ended September 30, ~~2011~~2012

¨ Transition Report Under Section 13 or 15(d) of the Securities Exchange

Act of 1934 For the transition period _______ to ________

COMMISSION FILE NUMBER 000-50586

MARKETING WORLDWIDE CORPORATION

(Name of small business issuer in its charter)

Delaware		68-0566295
State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization

2212 Grand Commerce Drive, Howell, MI 48855

(Address of principal executive offices) (Zip Code)

(Issuer's telephone number) (517) 540-0045

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

$.~~001~~00001 PAR VALUE COMMON STOCK

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ . No x .

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨. No x

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

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

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 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

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

The aggregate market value of the Registrant's common stock held by non-affiliates (as defined by Rule 12b-2 of the Exchange Act) computed by reference to the average bid and asked price of such common equity on March 31, ~~2011~~2012 ~~was~~as $~~795~~887,~~754~~386.

At January 179, ~~2012~~2013, there were ~~148~~470,~~997~~667,~~630~~013 shares of $.~~001~~ 00001 par value common stock issued and outstanding.

TABLE OF CONTENTS

			PAGE	~~PAGE~~
PART I
	ITEM 1.	BUSINESS	1	1
	ITEM 1A.	RISK FACTORS	4	5
	ITEM 1B.	UNRESOLVED STAFF COMMENTS	7	8
	ITEM 2.	PROPERTIES	7	8
	ITEM 3.	LEGAL PROCEEDINGS	7	9
	ITEM 4.	~~REMOVED~~MINE ~~AND~~SAFETY ~~RESERVED~~DISCLOSURES	8	9
PART II
	ITEM 5.	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	8	9
	ITEM 6.	SELECTED FINANCIAL DATA	8	9
	ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	8	9
	ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13	14
	ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	14	15
	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	15	16
	ITEM 9A.	CONTROLS AND PROCEDURES	15	16
	ITEM 9A(T).	CONTROLS AND PROCEDURES		16
	ITEM 9B.	OTHER INFORMATION	16
	ITEM 9B.	OTHER INFORMATION		17
PART III
PART III
	ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	16
	ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		17
	ITEM 11.	EXECUTIVE COMPENSATION.	17
	ITEM 11.	EXECUTIVE COMPENSATION.		19
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	17
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		20
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	19
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		21
	ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES.	19
	ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES.		22
PART IV
PART IV
	ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	20
	ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		23

PART I

ITEM 1. BUSINESS

This Annual Report on Form 10-K (including the section regarding Management's Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements using terminology such as "can", "may", "believe", "designated to", "will", "expect", "plan", "anticipate", "estimate", "potential" or "continue", or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future. You should read statements that contain these words carefully because they:

o discuss our future expectations;

o contain projections of our future results of operations or of our financial condition; and

o state other "forward-looking" information.

We believe it is important to communicate our expectations. However, forward looking statements involve risks and uncertainties and our actual results and the timing of certain events could differ materially from those discussed in forward-looking statements as a result of certain factors, including those set forth under "Risk Factors," "Business" and elsewhere in this report. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to us as of the date thereof, and we assume no obligations to update any forward-looking statement or risk factor, unless we are required to do so by law.

Marketing Worldwide Corporation

Marketing Worldwide Corporation, a Delaware corporation ("MWWC” "We" "Us" "Our" or the "Company"), was incorporated on July 21, 2003. MWWC's headquarters are in Howell, Michigan. MWWC operates through the holding company structure and conducts its business operations through our wholly owned subsidiaries Colortek, Inc. (“CT”) and Marketing Worldwide, LLC (“MWW”).

In previous reporting periods, the Company had a 100 % German subsidiary, Modelworxx, GmbH (“MWX”). As the direct result from the world-wide economic recession, MWX was forced to file insolvency in the German legal system. This filing was done in February, 2010 and MWWC has not been provided any final determination from the German courts and does not expect to receive any further communication.. The Company reported this transaction as discontinued operations in the reported consolidated financial statements.

Marketing Worldwide, LLC (“MWW”)

The MWW Automotive Group (OTCQB: MWWC) administration office is alocated ~~global~~in ~~design~~Howell, ~~engineering~~Michigan, ~~manufacturer~~with a 46,000 square foot Class A manufacturing and ~~fulfillment~~logistics ~~firm~~facility ~~serving~~in Baroda, ~~some~~Michigan offor the ~~world’s~~production ~~leading~~of high quality OE automotive and industrial ~~manufacturers,~~products. ~~providing~~MWW delivers its products and ~~services~~Class A topainting, ~~Automotive~~assembly and ~~Industrial~~logistics ~~Original~~services ~~Equipment~~directly ~~Manufacturers~~to ~~along~~major ~~with~~US ~~accessories~~and ~~for~~Foreign ~~the~~automobile ~~customization~~manufacturers' ofVehicle ~~vehicles~~Processing ~~and~~Centers (VPC), ~~delivers~~leading ~~its~~edge ~~products~~show tocar ~~certain~~and ~~Vehicle~~performance ~~Processing~~accessory ~~Centers~~design ~~primarily~~firms, and/or assembly lines in North America. MWW's ~~operates~~industrial products inare adelivered ~~23,000~~directly ~~square~~to ~~foot~~the ~~leased~~industrial ~~building~~manufacturers for installation in ~~Howell~~their ~~Michigan~~facilities.

The primary automotive accessory products services provided by MWW ~~are~~is the refinishing of blow-molded spoilers (bridge and lip), front and rear fascia systems, side skirts, door panels, extruded body-side moldings and interior ~~dash~~ components. During ~~2011~~2012, we have identified several new Tier 1 business partners to drive more automotive and industrial product sales and expect fiscal year ~~2012~~2013 to be greater than ~~2011~~2012.

MWW’s programs are sold not only to Automotive and Industrial Original Equipment Manufacturers but also directly to vehicle processing centers, ~~and~~manufacturers and distributors located primarily in North America. ~~These~~and ~~vehicle~~through ~~processing~~its ~~centers~~Tier ~~and~~1 ~~distributors~~partner companies. These companies receive a continuous stream of new vehicles from the foreign and domestic automobile manufacturers for accessorization, customization, and subsequently, distribution into the domestic dealer distribution network. Distributors also sell MWW’s accessories directly to their dealers and end customers. The industrial partners are delivering components from the US and European market to MWW, expecting refinishing and just-in time inventory delivery to their large assembly plants in the U.S. and Europe. Special design vehicle components are delivered to MWW from within the US and delivered directly to the design firms extended client distribution network.

MWW's business model empowers its customers, some of the largest brands in the U.S., to make the selection of various accessories and components (sold by MWW) later in the production cycle, thus improving time to market for their automobiles and faster reaction to the dynamically changing demand of its customers. The principal MWW products sold during the last two fiscal years include Automotive Body Components such as:

* Hood Scoops

* Grills

* Rear Deck Spoilers

* Body Side Moldings

* Front and Rear Fascia Systems

* Side Skirts

* Door Panels

* Interior Components

Page 1

~~Several~~* ofEngine the vehicles MWW currently provides accessories to are changing models next year and will provide additional growth opportunities. Based on expertise and space available in its Baroda plant, MWW is also negotiating to provide fulfillment activities for new customers, going beyond the Company’s original business plan, meaning MWW will receive, store and ship products that are designed and manufactured by other unrelated companies.Components

* Interior Dash Components

* Large industrial components

Based on expertise and space available in its Baroda plant, MWW is also providing logistics support for new customers, going beyond the Company’s original business plan, meaning MWW receives, stores and distributes products that are designed and manufactured by other unrelated companies.

Colortek, Inc. (“CT”)

CT is a wholly owned Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. We invested approximately $2 million into this paint facility and expect the majority of our future growth to come from this business. We have restructured the management of this subsidiary, implemented rigid cost down exercises and streamlining of production processes and have successfully gained ~~more~~substantial new business opportunities ~~than ever before~~.. CT is aggressively beginning to diversify to non-automotive paint applications ~~(household~~and ~~goods~~has ~~and~~secured its first industrial client, (construction and agricultural equipment) which we believe will help stabilize the Company going forward during ~~2012~~2013.

RECENT DEVELOPMENTS

In September, 2009, the Company entered into a new loan agreement with Summit Financial to borrow up to $1,000,000. MWW pledged all of its inventory, equipment, accounts receivable, chattel paper, instruments, and letters of credit, documents, deposit accounts, investment property, money, rights to payment and general intangibles to secure the Loan. The financing arrangement ~~expires~~was set to expire on August 31, 2012, unless extended by both parties. This financing agreement was terminated by the company on June 5, 2012.

~~Effective~~The ~~February,~~Company ~~2010,~~had ~~the~~a ~~Company’s~~wholly ~~German~~owned subsidiary in Germany, ~~ModelWorxx~~Modelworxx, GmbH, ~~filed~~which, ~~insolvency. The~~in ~~Company~~February, ~~has~~2010, ~~not~~filed ~~received~~insolvency ~~final~~in ~~resolution of this matter from~~ the German courts. The ~~net~~Company ~~liabilities~~has ofreclassified ~~the~~Modelworxx, GmbH ~~100~~fiscal %year ~~owned~~ended ~~subsidiary~~September ~~are~~30, ~~included~~2011 inbalances ~~the~~to ~~reported~~reflect ~~consolidated~~them ~~financial~~as ~~statements~~discontinued ofoperations ~~the Company. The income~~ and ~~expense~~upon ~~accounts~~final ofliquidation, ~~ModelWorxx~~recognized a ~~have~~net ~~been~~gain ~~reclassified~~on ~~and~~disposal ~~its~~of ~~operations~~international ~~have~~subsidiary ~~been~~of ~~treated~~$349,322 asduring athe ~~loss~~year ~~from~~ended ~~discontinued~~September ~~operations~~30, ~~in these consolidated financial statements~~2012.

As part of the continued restructuring of the Company, the Board hired a new Chief Executive Officer, Charles Pinkerton, to further and accelerate the turnaround efforts. To date, the Company has reduced labor by 40 % and occupancy cost by 80 %. Under the new leadership of Mr. Pinkerton, the Company has increased new revenue opportunities ten-fold.

PRODUCTS IN DEVELOPMENT

During ~~2010~~2012, MWW significantly expanded its customer base securing new automotive projects for Chevrolet, Ford, Mazda, Subaru, Scion and Hyundai. ~~One~~Two of the ~~most~~highlights of ~~important~~2012 ~~developments~~were isthe development and implementation of products and services for two large domestic/international alliance partners who have quickly become our ~~recent~~largest ~~move~~clients. ~~into~~Five ~~the~~Axis ~~automotive~~Design ~~interior~~out ~~supply~~of ~~chain,~~California ~~securing~~along ~~programs~~with Roush Performance Products located in Michigan has partnered with MWW for ~~both~~entry into the ~~Ford~~extremely ~~F-150~~lucrative ~~truck~~marketplace ~~line~~of very high end custom and ~~the~~specialty ~~Chevrolet~~automobiles, that ~~Sonic~~falls squarely within our core competencies. ~~These~~This ~~are~~is ~~two~~a very crucial ~~developments~~development in the MWW market diversification effort and a corner stone for ~~future~~improving revenue generation.

During ~~2010~~2012, MWW ~~began and has partially~~ concluded the certification and approval process with Roush, Five Axis, Mazda and GSI International, ~~providing~~who will provide us with substantial ~~Industrial~~Automotive and Industrial opportunities well into the future.

InColortek, ~~January~~Inc. ~~2009~~is ~~MWW~~currently ~~was~~manufacturing products ~~awarded~~for ~~the~~several ~~4Runner~~domestic ~~running~~and ~~board~~import ~~program~~automotive ~~for~~manufacturers ~~Toyota~~along ~~Canada. This~~with the first awarded program ~~launched~~to inprovide ~~September~~painting ofservices to ~~2009~~both the industrial and ~~should~~construction ~~continue~~industries. ~~through~~Colortek ~~2014~~satisfies a growing marketplace requiring smaller production runs at Class A production quality.

In December of 2009 the new Yaris HB package was approved by Southeast Toyota which included a spoiler, interior trim, lighted door sills and the new Bongiovi Acoustics sound system embedded in a special built JVC stereo system.

During the spring and summer of 2009 a full line of newly designed carbon fiber seat heater systems was developed and launched in July 2009. This expands the product line to 7 configurations, expanding the spectrum of applications in different vehicles.

In addition to its internal development programs, MWW is in various stages of joint program developments on a number of new programs with several other suppliers. These development efforts were undertaken to expand our product offering and customer base, while reducing our development costs. These products are either currently being designed, prototyped or in various stages of tooling with expected launch dates in the second or third quarter of fiscal year 2011.

Colortek, Inc. is currently manufacturing products for several domestic and import automotive manufacturers along with negotiating to provide painting services to both the industrial and construction industries. Colortek satisfies a growing marketplace market where lower volume painting releases and Class A production quality are demanded.

Page 2

THE MARKET

The global automobile accessory market is highly fragmented and not dominated by a few large participants. The Industrial market is somewhat less fragmented, but also dominated by a few large European and North American companies. Competitive pressures among vehicle manufacturers have evolved so that the manufacturers add options to their vehicles at the vehicle processing centers and not during the initial manufacturing process at the assembly line. In addition many manufacturers have switched to smaller vehicle production runs which can be accommodated by MWW’s business model. These options packages are commonly referred to as "port installed" or "dealer installed" option packages. MWW accessory programs are a crucial part of the option packages installed at the vehicle processing centers in North America. Accordingly, MWW receives its revenue directly from the vehicle processing centers and not from the automobile manufacturers or the automotive dealer. MWW future prospects are expected to be positively impacted by the fact that the Domestic Automotive and commercial markets have recovered and the prospects for the next few years are positive.

~~The~~Page vehicle processing centers, which MWW sells to, do not design or manufacture the option packages. Instead, they have well-trained employees who install virtually any accessory for all vehicles they distribute. As such, any vehicle received by the vehicle processing centers can be accessorized before it goes into the respective domestic retail dealer distribution network. MWW's accessory programs that are sold to the vehicle processing centers include the individual components, parts, installation instructions and training, fixtures, templates, and warranty.2

~~Vehicle~~A ~~manufacturers~~large part of MWW’s manufacturing and fulfillment programs is enhanced by the ~~vehicle~~fact ~~processing~~that ~~centers~~MWW ~~rely~~owns onCT, its 46,000 square foot Class A paint facility. Accordingly, MWW is in a position to ~~propose~~provide painted products to their customers at the Vehicle Processing Centers, ~~design~~directly to OE automotive and industrial manufacturers, ~~manufacture~~as well as through its strategic Tier 1 partnerships. Over the recent years MWW’s has gathered the experience and ~~deliver~~track record and has established the ~~accessory~~production capacity and expertise to effectively manufacturer programs the automotive and commercial marketplaces. ~~The~~MWW ~~vehicle~~is ~~processing~~clearly ~~centers~~positioned ~~operate~~to ~~under~~satisfy ~~quality~~the ~~control~~need ~~programs~~for ~~similar~~low orvolume ~~equal~~and tomore frequent production runs currently dominating the ~~manufacturer's~~automotive ~~on-line~~industry. Large volume production facilities. ~~Therefore,~~are ~~process~~considering ~~stability,~~and ~~quality~~have ~~control~~begun ~~issues~~shutting down their robotic facilities and ~~other~~moving ~~related~~their ~~procedures~~business ~~are~~to asmall ~~crucial~~manufacturers ~~component~~such ofas aMWW, ~~successful~~who ~~relationship~~can ~~with~~execute ~~the~~these ~~processing~~production ~~centers~~runs more cost effectively. MWW’s ~~The~~production ~~vehicle~~facilities ~~processing~~have ~~centers~~also ~~that~~been ~~will~~enhanced ~~market~~to ~~particular~~process ~~vehicles~~large ~~into~~industrial ~~the~~components in ~~dealer~~its ~~network~~oversized ~~are~~paint ~~responsible~~booth ~~for~~and ~~requesting,~~bake ~~approving,~~ovens ~~and~~to ~~ultimately~~satisfy ~~paying~~the ~~for~~demand from the ~~accessory~~industrial ~~programs~~markets. We are in negotiations with several of these types of new opportunities.

A large part of the fulfillment program is enhanced by the fact that MWW owns CT, the Class A paint facility. MWW, through its relationship with CT, provides painted products to their customers at the Vehicle Processing Centers as well as through other customers. CT has continued developing its own customers independent of MWW and MWW’s customers, hence providing more diversification. It now seems that MWW’s capacity to produce products efficiently in this segment of the market and satisfy the need for smaller but more frequent production runs is happening as large faculties are considering shutting down their robotic facilities and moving their business to small manufacturers such as MWW, who can execute these production runs cost effectively. We are in negotiations with several of these types of opportunities.

MAJOR CUSTOMERS

MWW's major customers in North America are the ~~Toyota Vehicle Processing Centers,~~ Domestic and ~~Imported~~Import Automobile Manufacturers, Industrial Equipment ~~Manufactures~~Manufacturers, aslarge Tier 1 strategic partners, as well as a variety of tier 2 and tier 3 manufacturers to the auto industry. and a high-end design and prototype and concept show cars studio with a line of aftermarket styling products

~~Colortek~~For ~~paints~~the ~~for~~year ended September 30, 2012, MWW aswas ~~well~~dependent asupon ~~several~~four ~~tier~~(4) ~~one~~customers for 96.81% of its revenue. Customer #1, Customer #2, Customer #3 and ~~two~~Customer ~~companies~~#4 represented 76.40%, 12.84%, 5.11% and ~~continued~~2.47% ~~growth~~of isrevenue, ~~expected~~respectively. toMoreover, be96.69% ~~achieved~~of our accounts receivable at September 30, 2012 were due from these four (4) customers. For the ~~Colortek~~year ~~niche~~ended ~~Class~~September A30, ~~paint~~2012, ~~facility~~Customer #1, Customer #2, Customer #3, and Customer #4 represented 12.88%, 16.07%, 3.15%, and 11.07% of accounts receivable, respectively.

For the year ended September 30, 2011, MWW was dependent upon four (4) customers for 95.18% of its revenue. Customer #1, Customer #2, Customer #3, and Customer #4 represented 36.57%, 32.70%, 20.37% and 5.53% of revenue, respectively. Moreover, 96.51% of our accounts receivable at September 30, 2011 were due from these four (4) customers. For the year ended September 30, 2010, MWW was dependent upon four customers for 99.5% of its revenue. Customer #1, Customer #2, Customer #3, and Customer #4 represented 35.3%, 24%, 20.4%, and 19.8% of revenue, respectively. Moreover, 97.2% of our accounts receivable at September 30, 2010 were due from four customers.

PRODUCT WARRANTIES

MWW generally warranties its products to be free from material defects and to conform to material specifications for a period of three (3) years. MWW has not experienced significant returns to date. MWW suppliers provide warranties for each product manufactured covering manufacturing defects for the same period that MWW offers to its customers. Therefore, a majority of the claims made under product warranties by MWW's customers are covered by our supplier partners and sub-suppliers.

TECHNOLOGY

MWW has an experienced design team whose members have launched successful programs with a variety of customers. MWW applies the latest design tools and technologies during this process and covers the entire range of the design process from the initial sketch to computer aided design (“CAD”), full size clay modeling to fully functional show cars to finally preparing automobiles for production. This experience is expected to accelerate the development of accessory programs for sale in the European and North American markets.

Page 3

PORTABLE DIGITIZING SYSTEM

In order to produce its products and at the same time expedite the design and development, MWW uses the latest in digital recognition and design technology. Digital recognition refers to the use of up to date digital imaging equipment to capture data for manipulation, using CAD programs to assist the process. MWW uses portable equipment to obtain surface and/or component data acceptable for CAD, either in the field or at the processing center's location. This allows MWW to create highly accurate full-scale parts that can be used for development, presentations and sales and marketing, should the CAD data for a particular vehicle not be available in advance.

SOURCING

All MWW contract suppliers and production facilities are original equipment manufacturers, approved and certified by the International Standards Organization ("ISO") with the ISO ~~9000~~9001 certification. ISO ~~9000~~9001 certification refers to the objectively measurable set of quality management standards and guidelines that form the basis for establishing quality management systems adopted by the ISO. The ISO is a non-governmental organization comprised of the national standards institutes of 146 countries. The facilities have been strategically selected to minimize transportation cost and logistics. Suppliers are required to participate in quality assurance audits and submit the appropriate documentation for the components it processes for MWW.

SUPPLIERS

MWW has established relationships with a group of global suppliers that deliver quality materials for the production of add-on components to MWW. MWW believes there are numerous sources for the raw materials used in its products and a loss of any of these suppliers would not impact MWW’s performance negatively. For the year ended September 30, ~~2011~~2012, MWW had 5 suppliers that aggregating 7194.5470 % represented greater than 10% of our total purchases. Supplier 1, Supplier 2, Supplier 3, Supplier 4 and Supplier 5 represented 21 51.7519%, 15.9981%, 1314.2741%, 10.2840% and 102.2690% of purchases made from suppliers respectively. For the year ended September 30, ~~2010~~2012, ~~MWW made 60.64% of its purchases from five suppliers;~~ Supplier #1, Supplier #2, Supplier #3, Supplier 4#4and ~~and~~ Supplier #5 represented 134.1102%, 120.6317%, 120.0942%, 120.0844%, and 100.7443% of accounts payable, respectively.

COMPETITION

The general aftermarket automotive industry is highly competitive. In MWW's market niche, ~~defined as selling directly to the vehicle processing centers,~~ competition is somewhat limited and is occasionally represented by smaller divisions of larger companies. MWW competes for a share of the overall global automotive aftermarket and potential new customers. In general, competition is based on ~~proprietary~~ product ~~design capabilities and product~~ quality, features, price and satisfactory after sale support. ~~MWW's~~The ~~competitors~~industrial ~~include~~marketplace ~~companies~~is ~~that~~somewhat less ~~offer~~competitive athan ~~broad~~the ~~range~~automotive ofmarket, ~~products~~dominated ~~and~~by ~~services,~~fewer ~~such~~large ascompanies ~~urethane~~and ~~molded~~in ~~parts,~~need ~~running~~for ~~boards,~~high ~~ground~~quality ~~effects,~~refinishing ~~and~~facilities such ~~design~~as MWW.

The competitive landscape has changed during the last twelve months, the market is more fragmented than ever before, a number of competitors have ceased to exist and consolidation is ongoing. MWW has entered into several strategic alliances with Tier 1 companies. ~~During~~and has entered the ~~next~~industrial and ~~twelve~~Automotive ~~months~~Specialty aMarkets ~~clearer~~to ~~picture~~diversify ofand ~~main~~limit ~~competitors~~the ~~will~~customer ~~emerge~~and ~~again~~market concentration risks further.

~~MWW~~Page believes that its competitive edge lies in its extensive resources in design, engineering, Class A painting and sales. MWW focuses on the expansion of its internal capabilities and improved utilization of resources between its headquarters and its wholly owned subsidiaries and the careful cultivation of long-term relationships, in contrast to simply selling products to multiple anonymous customers. By making sure MWW customers will remain satisfied clients, MWW is not only stabilizing and growing its client roster and assuring revenue growth, but also simultaneously building and maintaining barriers of entry for competitors.3

MWW ~~spent~~believes ~~many~~that ~~years~~its ~~cultivating~~competitive ~~the~~edge lies ~~relationships~~in ~~that~~its ~~led~~extensive toresources ~~(i)~~in ~~the~~OE ~~design~~Quality ~~work for BMW~~refinishing, ~~Rolls~~Logistics ~~Royce~~Capabilities and ~~Mini~~its ~~automobiles~~ability and ~~(ii)~~production ~~the~~capacity ~~sale of accessory programs~~ to ~~the~~manufacture oversized ~~vehicle~~industrial ~~processing~~components ~~centers~~ for ~~Toyota,~~multiple ~~Hyundai and KIA vehicles~~marketplaces. ~~As part of the process,~~ MWW ~~built~~focuses aon ~~strong commercial relationship with~~ the ~~automotive~~expansion ~~manufacturers~~of ~~that~~its ~~supply~~internal ~~MWW~~capabilities ~~with the advance data required to develop new products in a timely fashion for new Toyota, Hyundai~~ and ~~KIA~~improved utilization ~~vehicle models. With this information, MWW can prepare new programs for its customers~~ and ~~make~~expansion ~~those products available at the launch~~ of ~~new~~its ~~automobile~~advanced ~~models~~resources and ~~have them correspond to~~ the ~~3-5~~careful ~~year~~cultivation ~~life cycles~~ of ~~each~~long-term ~~vehicle model. Moreover, as MWW manages its supplier and customer~~ relationships ~~effectively~~, itin iscontrast ~~creating~~to ~~significant~~simply selling ~~barriers~~products ofto ~~entry~~multiple ~~for~~anonymous ~~competitors~~customers. ~~MWW~~By ~~expects~~making tosure ~~establish~~MWW ~~similar~~customers ~~relationships~~will ~~with~~remain ~~additional~~satisfied ~~foreign and domestic manufacturers in future periods.~~clients,

MWW is not only stabilizing and growing its client roster in different industries and assuring revenue growth, but also simultaneously building and maintaining barriers of entry for competitors.

PROPRIETARY RIGHTS

MWW primarily relies upon a combination of trade secret laws, nondisclosure agreements and purchase order forms to establish and protect proprietary rights in the design of its own products and in ~~the~~its customers’ products. However, it may be possible for third parties to develop similar products independently, provided they have not violated any contractual agreements or intellectual property laws.

Page 4

COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

The Company currently has no costs associated with compliance with environmental regulations. However, there can be no assurances that we will not incur such costs with our paint facilities in the future.

EMPLOYEES

MWW has an elastic work-force, with as few as 10 employees, and as many as 50 employees , depending on the number of projects currently being worked on. Management believes that the structure of its workforce allows MWW to scale its overhead according to the scope of its design, tooling, assembly and manufacturing requirements throughout the year. MWW plans to add employees in the future .

ITEM 1A. RISK FACTORS

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND THE MARKET PRICE OF OUR SECURITIES.

If any of the following material risks actually occur, our business, financial condition, or results of operations could be materially adversely affected, the trading prices and volume of our common stock could decline, and you could lose all or part of your investment. You should buy shares of Marketing Worldwide Corporation common stock only if you can afford to lose your entire investment. ~~success~~Success is dependent on the creative, technical, financial, administrative, logistical, design, engineering, manufacturing and other contributions of the current employees and officers of the Company. Founders of Marketing Worldwide Corporation, Michael Winzkowski and James Marvin have taken on different roles. Winzkowski has relinquished the role of CEO and is now ~~active~~the as Chairman of the Board and President of MWW. Mr. Marvin ~~has~~had resigned during 2010 and no longer has any management activities at MWW. ~~These~~ ~~individuals~~The ~~originally~~Board ~~established~~of ~~the~~directors ~~relationships~~has ~~with~~engaged ~~our~~Charles ~~customers~~Pinkerton ~~and~~as ~~suppliers~~the ~~and~~new ~~have~~CEO ~~turned~~in ~~this~~2011. The role ~~over~~of toMr. Davis, the ~~new~~CFO ~~CEO,~~has ~~Charles~~been ~~Pinkerton~~transferred to ~~and~~Deborah ~~CFO~~Hallman as director of financing, ~~James~~a ~~Davis~~long term employee of the company. The loss of either Pinkerton or ~~Davis~~Hallman could potentially cause a disruption in our operations ~~that could cause a decline in the level of revenue and the operating margins reported by the company~~. In the short term, it would be difficult to duplicate the relationships, industry experience, and creativity of Mr. Pinkerton and MrMrs. ~~Davis~~Hallman. The loss of one or both might substantially reduce our revenues and growth potential, although the recent departure of Mr. Davis had been compensated for with existing management resources.

OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION MAY BE ADVERSELY AFFECTED BY GLOBAL ECONOMIC AND FINANCIAL MARKETS CONDITIONS.

Current global economic and financial markets conditions, including severe disruptions in the credit markets and the prolonged global economic recession has materially and adversely affected our results of operations and financial condition. These conditions have also materially impacted our customers, suppliers and other parties with which we do business. Economic and financial market conditions that adversely affect our customers, especially ~~cause~~our past largest customer Toyota, caused them to terminate existing purchase orders or to reduce the volume of products they purchase from us in the future. We have seen a decline in certain volumes over the last year, but are now seeing an increase due to what appears to be a strengthening economic environment and the successful acquisition of new customers in the automotive and industrial markets by our new management team. In connection with the sale of products, we normally do not require collateral as security for customer receivables and do not purchase credit insurance. We may have significant balances owing from customers that operate in cyclical industries and under leveraged conditions that may impair the collectability of those receivables.

Failure to collect a significant portion of amounts due on those receivables could have a material adverse effect on our results of operations and financial condition. Adverse economic and financial markets conditions may also cause our suppliers to be unable to meet their commitments to us or may cause suppliers to make changes in the credit terms they extend to us, such as shortening the required payment period for outstanding accounts receivable or reducing the maximum amount of trade credit available to us. Changes of this type could significantly affect our liquidity and could have a material adverse effect on our results of operations and financial condition. If we are unable to successfully anticipate changing economic and financial market conditions, we may be unable to effectively plan for and respond to those changes, and our business could be negatively affected. We have been fortunate in that we have not had any significant negative effect from not being able to collect on our billings.

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OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S REPORT CONTAINS AN EXPLANATORY PARAGHRAPH WHICH HAS EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING

In their report dated January 1714, 2012, our independent registered public accounting firm stated that our consolidated financial statements for the year ended September 30, ~~2011~~2012 were prepared assuming that we would continue as a going concern, and that they have substantial doubt about our ability to continue as a going concern. Our auditors' doubts are based on our recurring net losses, deficits in cash flows from operations and stockholders’ deficiency. We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including by the sale of our securities, or obtaining loans from financial institutions, where possible. Our continued net operating losses and our auditors' doubts increase the difficulty of our meeting such goals and our efforts to continue as a going concern may not prove successful.

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OUR BUSINESS DEPENDS ON OUR DESIGNS, BUT WE HAVE NOT SOUGHT COPYRIGHT OR PATENT PROTECTION FOR ALL OUR PRODUCTS. IF OUR UNPROTECTED ACCESSORY PROGRAMS BECOME WIDELY AVAILABLE BECAUSE WE FAILED TO USE CERTAIN LEGAL MEANS TO PROTECT OUR DESIGNS, IT MAY HURT OUR BUSINESS.

Our success is dependent, in part, upon the designs for our principal products such as our rear deck spoilers, body-side moldings, carbon fiber seat heaters, and expanding the paint shop business levels. We have not taken steps to obtain copyright or patent protection for all of our designs. Instead, we mostly rely on confidentiality agreements with our customers, employees, vendors and consultants to protect our proprietary technology. If our unprotected accessory programs become widely available because we did not adequately protect the designs, intellectual property and trade secrets, it may cause a material adverse change in our business, financial condition and results of operations.

WE DO NOT HAVE LONG-TERM WRITTEN AGREEMENTS WITH OUR KEY CUSTOMERS OR KEY SUPPLIERS; THEREFORE, OUR REVENUE STREAM AND OUR SUPPLY CHAIN ARE SUBJECT TO GREATER UNCERTAINTY.

~~The~~Our ~~vehicle processing centers for Toyota are all key~~ customers. ~~These customers~~ issue short term contracts (12 months) or blanket purchase orders to us that remain open during the life of an accessory program or the extended term.

The customer then places delivery releases against these blanket purchase orders or short term agreements generally in 30 day intervals. However, none of our key customers have any binding obligations, beyond the practical reasons that prevent a change in manufacturer and beyond payment of our most recent purchase order and adherence to the terms and conditions of the blanket purchase order or short term agreement. The lack of long-term written agreements that specify a fixed dollar amount of the total purchase amount for our accessory programs or services means that we cannot predict with any certainty that these customers will generate a specific level of revenue in any specific accounting period. Our blanket purchase orders or short term agreements with customers provide for a fixed per unit cost, but do not contain any fixed purchase commitments for a specific dollar amount. ~~A delivery release under the blanket purchase order does specify the dollar amount to be paid by our customer for that release.~~ We record revenue when products are shipped, legal title has passed, and all our significant obligations have been satisfied.

We cannot predict with certainty that we will be able to replace a significant customer or significant supplier without a decline in our revenue and net income. Stated differently, we have to constantly justify our value proposition to our customers and our suppliers because even though the per unit price of our accessory programs is covered in the blanket purchase order, our customers are not obligated to buy the goods and services specified in the blanket purchase order. On the positive side their relative freedom to stop dealing with us keeps us in close contact with them. On the negative side, their freedom to stop dealing with us means that our revenue and our ability to generate revenue is in constant jeopardy, as well as difficult to predict with certainty. This jeopardy is balanced by the fact that it is rather uneconomical for a customer to change manufacturers frequently, since the production qualification process on both sides is rather resource intensive in regards to time and capital invested.

WE USE PAINT AND PLASTIC MATERIALS. OUR BUSINESS COULD BE AFFECTED BY ENVIROMENTAL RISKS.

Colortek, Inc. is a paint company using abrasives and paint solvents. Although we have approval from the governmental agencies to paint, there is no guaranty that laws won’t change to adversely affect us, nor is there absolute certainty we will continue to operate without interference from governmental agencies or environmental groups.

We have not experienced any issues as yet, however the potential exists we may in the future.

LOSS OF FACILITIES COULD IMPAIR OUR ABILITY TO PROVIDE PRODUCTS TO OUR CUSTOMERS.

As in most businesses, if we lost both our facilities in Howell and Baroda Michigan, we would be in a short term bind. The Howell facility would cause less disruption, as we could easily move our offices and the fulfillment activities elsewhere in quick fashion.

Loss of the Baroda facility would require us to rebuild, which we could do with the insurance coverage we maintain. In the short term, we would transfer painting to one of our strategic partners until we got the facility back up and running.

Although the Baroda facility is more critical, we feel the likelihood of a total disaster is remote. Our insurance and strategic relationships with other paint facilities should provide continuity of the supply chain to our customers.

ADVERSE RULING FROM THE BANKRUPTCY JUDGE IN GERMANY COULD NEGATIVELY IMPACT OUR BUSINESS AND CASH FLOW.

As mentioned throughout this filing, our German subsidiary filed for insolvency in February, 2010. We have not received any adverse notifications from the bankruptcy court or judge and have no reason to believe we will, but the possibility exists that we could receive an adverse ruling.

If we were to receive an adverse ruling, we would challenge it through the legal systems available to us.

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LOSS OF MAJOR SUPPLIERS COULD AFFECT OUR ABILITY TO GET PRODUCT.

We have a concentration of risk with a few suppliers providing ~~most of~~ our product requirements. If we were to lose anyone of them, this could ~~negatively~~potentially negatively impact our ability to get product on a timely basis. We have an internal policy to have back-up suppliers to our major product offerings, and ~~are~~have ~~moving~~ in ~~the~~place ~~direction of having~~ a back-up for each of our suppliers. Accordingly, we do not consider this a significant risk.

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WARRANTY CLAIMS COULD ADVERSLY IMPACT OUR FINANCIAL POSITION IF OUR CUSTOMERS REQUIRE A RECALL OF VEHICLES DUE TO PRODUCTS WE PROVIDE.

We review warranty reserves on a regular basis and record expense as deemed appropriate for the products sold to our customers. We also purchase product liability insurance to cover large claims.

We believe the risk, although it exists, is minimal as the primary products we sell (plastic rear-deck spoilers, plastic body-side moldings and electric seat heaters) are not likely to give birth to a large massive recall. In any event, we do provide a reserve in our financial statements plus we feel we would have a claim against the actual manufacturer of the product should a massive recall initiative be instituted, which we believe would reduce our financial risk. CONTINUED INCREASES IN PETROLEUM COSTS COULD ADVERSELY IMPACT OUR COST STRUCTURE.

Considering we use paint, which is petroleum based, and ship products via trucks that use gasoline for power, we are at risk of seeing higher costs as petroleum costs increase. Although we have not seen this as yet, we recognize this as a possible risk.

WE ARE VULNERABLE BECAUSE OF OUR CUSTOMER CONCENTRATION, BUT THERE IS NO GUARANTY THAT WE CAN ADD CUSTOMERS. FAILURE TO ADD NEW CUSTOMERS MAY LIMIT OUR REVENUE IN FUTURE PERIODS.

~~Our~~While the new management has expanded our customer roster significantly, our revenue still depends on a few key customers, the loss of which would have a negative impact on our revenues and results from operations.

Our annual operating results are likely to fluctuate significantly in the future as a result of our dependence on our four or five major customers. Moreover, the actual purchasing decisions of our customers are often outside our control. Consequently, our customer's purchase decisions are influenced by factors beyond our control, like general economic conditions and economic conditions specific to the automobile industry.

Moreover, the actual purchasing decisions of our customers are often outside our control. Consequently, our customer's purchase decisions are influenced by factors beyond our control, like general economic conditions and economic conditions specific to the automobile industry.

Further, since the majority of our revenue is from four or five key customers instead of from a multitude of individual customers, a significant change in the amount or timing of purchase decisions by a single customer creates a wider fluctuation in our operating results for any given accounting period.

WE HAVE PLEDGED ALL OF OUR ASSETS TO ONE CREDITOR. OUR BUSINESS COULD BE AFFECTED BY OUR RELATIONSHIP WITH THIS CREDITOR.

In September, 2009, we entered into a new loan agreement with Summit Financial to borrow up to $1,000,000. MWW pledged all of its inventory, equipment, accounts receivable, chattel paper, instruments, and letters of credit, documents, deposit accounts, investment property, money, rights to payment and general intangibles to secure the Loan. If we are unable to renew the Loan when it comes due or find other sources of capital, the lender could foreclose on all of our assets. This would have a material adverse effect on our financial condition and results from operations.

MANAGEMENT INTENDS TO INCREASE REVENUE THROUGH ACQUISITIONS FINANCED WITH EQUITY WHICH WILL DECREASE THE EQUITY PERCENTAGE OF THE COMPANY OWNED BY EXISTING STOCKHOLDERS.

Management may consider increasing the Company's revenues through additional acquisitions of other operations in the automotive accessory industry. We have no plans for a reverse merger, change in control or spin off. The Company currently has no plans to engage in a transaction with an entity outside the automotive or commercial industry. Management is aware of several operating companies in the automotive accessory market that are candidates for additional merger or acquisition. While we may consider financing any business combination with common stock, we do not expect any business combination to result in a change in control or constitute a reverse merger.

WE LACK INDEPENDENT DIRECTORS WHICH LIMITS THE NATURE AND TYPE OF GUIDANCE GIVEN BY THE BOARD TO THE MANAGEMENT TEAM AND MAY AFFECT THE PRICE OF OUR STOCK.

~~Page~~Shareholders 7should be aware of and familiar with the recent issues concerning corporate governance and lack of independent directors as a specific topic. Our sole director is not independent because they he is employed by the Company. The OTC Bulletin Board does not have any listing requirements concerning the independence of a company's board of directors.

Shareholders should be aware of and familiar with the recent issues concerning corporate governance and lack of independent directors as a specific topic. Our two directors are not independent because they are employed by the Company. The OTC Bulletin Board does not have any listing requirements concerning the independence of a company's board of directors.

THERE IS A GRADUALLY EMERGING PUBLIC MARKET FOR MWW'S SECURITIES AND YOU MAY HAVE DIFFICULTIES TO LIQUIDATE YOUR INVESTMENT.

Trading volume of MWW stock (MWWC) has been increasing, with a closing ask price of $0.010002 on ~~December~~January 318, ~~2011~~2012. If a market for MWW's common stock continues to develop slowly; the stock price may be volatile. No assurance can be given that any market for MWW's common stock will be maintained. The sale of "unregistered" and "restricted" shares of common stock pursuant to Rule 144 of the Securities Act Rules by members of management or others may have a substantial adverse impact on any such market.

WE HAVE IDENTIFIED WEAKNESSES IN OUR INTERNAL CONTROLS.

Our management has concluded that our internal control over financial reporting was not effective as of September 30, ~~2011~~2012, as a result of several material weaknesses in our internal control over financial reporting. Descriptions of the material weaknesses are included in Item 9A ~~(T)~~, "Control and Procedures", in this Form 10-K.

As a result of these material weaknesses, we performed additional work to obtain reasonable assurance regarding the reliability of our consolidated financial statements, we ~~have~~keep ~~hired~~engaging a third party CPA as our ~~new~~outside ~~CFO~~controlling entity and to ~~manage~~generate and supervise the financial department and financial statement process. However, the remaining material weaknesses could result in a misstatement of substantially all accounts and disclosures, which would result in a misstatement of annual or interim consolidated financial statements that would not be prevented or detected. Errors in our consolidated financial statements could require a restatement or prevent us from timely filing our periodic reports with the Securities and Exchange Commission ("SEC"). Additionally, ineffective internal control over financial reporting could cause investors to lose confidence in our reported financial information.

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Our inability to remediate all weaknesses or any additional material weaknesses that may be identified in the future could, among other things, cause us to fail to timely file our periodic reports with the SEC and require us to incur additional costs and divert management resources. Additionally, the effectiveness of our or any system of disclosure controls and procedures is subject to inherent limitations, and therefore we cannot be certain that our internal control over financial reporting or our disclosure controls and procedures will prevent or detect future errors or fraud in connection with our financial statements.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We have received no written comments regarding our periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more preceding the end of our ~~2011~~2012 fiscal year and that remained unresolved.

ITEM 2. PROPERTIES

MWW's principal executive office is located at 2212 Grand Commerce Dr., Howell, MI 48855. ~~The~~in ~~facility has three truck wells, two ground doors,~~ a ~~technical development enclosure~~3,000 20square ~~foot~~feet ~~ceilings, additional~~ office space ~~and more parking~~. ~~The land for the executive office consists of 2.3 acres. The building is approximately 24,000 square feet.~~

~~The~~Our ~~facility was built to suit MWW's requirements and specifications. JCMD~~subsidiary, ~~the Limited Liability Company owned by the previous two founders of MWW~~Colortek, ~~built~~Inc. ~~the~~has ~~facility and leased the property to MWW under the terms of~~ a ~~three~~46,000 square ~~year~~foot ~~lease agreement. JCMD borrowed funds to build the~~ facility, ~~and~~on ~~due~~20 toacres ~~the~~located ~~downturn~~ in ~~the overall economic environment and MWW’s inability to remain current on the rent payments to JCMD~~Baroda, ~~JCMD was not able to continue making its mortgage payments and defaulted on the loan~~Michigan. ~~JCMD~~ ~~negotiated~~The ~~the~~facility ~~sale~~is ofowned ~~the~~by ~~real estate to a third party, whom has entered into a lease agreement with~~ MWW~~. The~~ ~~Company~~and ~~entered~~is ~~into~~financed aby ~~three~~Edgewater ~~(3) year lease with the buyer of the property described above~~Bank. The ~~general~~mortgage ~~terms~~is ofscheduled ~~the lease calls~~ for ~~monthly~~a ~~payments~~balloon ~~beginning~~payment ~~December~~in 1,July ~~2010~~ of ~~$6,666~~2013.67 ~~($80,000~~The ~~annually)~~Mortgage ~~for~~note ~~the~~balance ~~first~~at ~~year;~~September $730,~~083.34~~ ~~($85,000~~2012 ~~annually)~~was ~~per month for the second year;~~ $7553,~~416~~646.6728 with ~~($89,000~~a ~~annually)~~180 ~~per~~ month ~~for~~term ~~the~~and ~~third,~~a orfixed ~~final,~~interest ~~year~~rate of ~~the lease~~6. 75%. The ~~total~~current ~~rent~~monthly ~~due~~payment ~~over the three year period~~ is $~~254~~5,~~000~~962. ~~The~~In ~~Company~~accordance ~~is responsible for all property taxes, maintenance and utilities associated~~ with the ~~property. As~~mortgage loan ~~of November 16~~agreement, ~~2011~~we ~~has~~are ~~reduced~~currently ~~the~~in ~~size~~default ofand the ~~space~~following ~~required~~pertains atto this ~~facility and is no longer responsible for the property taxes, maintenance and utilities associated with the property.~~default:

~~Our~~MWW’s subsidiary, Colortek, ~~Inc.~~owns ~~has~~property and a 42building in Baroda,~~000~~ ~~square~~Michigan. ~~foot~~Edgewater ~~facility~~Bank onholds 20the ~~acres~~mortgage. ~~located~~Colortek infell ~~Baroda,~~behind ~~Michigan~~on payments. ~~The~~Edgewater ~~facility~~foreclosed on isthe ~~owned~~property by ~~MWW~~Sheriff’s ~~and~~sale ison ~~financed~~October by25, 2012. Edgewater ~~Bank.~~purchased ~~The~~the ~~mortgage~~property isat ~~scheduled~~the ~~for~~Sheriff’s asale. ~~balloon~~The purchase ~~payment~~price inleft ~~July~~a deficiency of ~~2013.~~$167,000, ~~The~~which ~~Mortgage~~was ~~note~~accrued ~~balance~~as atof September 30, ~~2011~~2012. The mortgage was ~~$587,026~~secured ~~with~~not aonly ~~180~~by ~~month~~the ~~term~~property, ~~and~~but by a ~~fixed~~UCC security interest filing ~~rate~~on ofColortek ~~6.75%.~~equipment ~~The~~and ~~current~~a ~~monthly~~personal ~~payment~~guaranty isfrom ~~$5,962~~MWW. InEdgewater ~~accordance~~initiated ~~with~~a ~~the~~lawsuit ~~mortgage~~against ~~loan~~MWW ~~agreement,~~and weColortek ~~are~~for ~~currently in default~~the deficiency .

The original owners of Colortek had also signed a personal guaranty for the mortgage. Their guaranty was not discharged when MWW became a guarantor. MWW brought a third party complaint against them on the guaranty. Edgewater and MWW principals and their attorneys have a settlement meeting scheduled for January 14, 2013 to pursue a settlement on both the deficiency and redeeming the property prior to the redemption period running.

Because Edgewater agreed to the settlement meeting and did not simply file a Motion for Summary Disposition to get a judgment, we believe settlement is probable. Both parties would suffer greatly otherwise as Edgewater would have property and equipment it cannot use or sell and Colortek, and thus MWW would be out of business, making the deficiency uncollectable as well. A well thought out settlement will get Edgewater paid and keep Colortek and MWW solvent.

We believe that our current office space and facilities are sufficient to meet our present and near term expansion needs and do not anticipate any difficulty securing alternative or additional space, as needed, on terms acceptable to us.

~~Page~~ITEM 83. LEGAL PROCEEDINGS .

~~ITEM~~The 3.company ~~LEGAL~~currently ~~PROCEEDINGS.~~has the following:

Marvin, a former director and shareholder of MWW brought a wage and hour claim against MWW alleging failure to pay wages and benefits. On March 2, 2011, an ALJ found in favor of Marvin in the amount of $81,730. An appeal by MWW was dismissed. On September 24, 2012, the State of Michigan brought an action against MWW to collect the amount due to Marvin. MWW has filed a third party complaint against Marvin alleging breach of employment agreement, breach of fiduciary duty and tortious interference with business relations.

MWW and the State of Michigan have entered into a consent judgment for the wage and hour amount. The State has agreed to hold the judgment in abeyance until the completion of the third party complaint and any amounts found due to MWW from Marvin will be deducted from the consent judgment.

The matter against Marvin will be vigorously contested, as Marvin abused his position with MWW and financially devastated the company.

MWW counsel feels MWW will either be awarded or settle for an amount equal to or greater than the amount due to Marvin .

The Company is sometimes subject to certain legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

~~ITEM~~MWW’s 4subsidiary, Colortek, owed money for services and product to Merlyn Engineering. ~~REMOVED~~Merlyn ~~AND~~initiated ~~RESERVED~~a lawsuit to collect $12,000.Settlement was entered into in October, 2012. Payment is due and was to be paid before 12-31-2012.

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MWW’s subsidiary Colortek filed with the Michigan Tax Tribunal to have the 2011 property tax assessment lowered by Baroda Township. The matter was lost in both the Tribunal and at MWW. After working with the Township and Tribunal, on December 4, 2012 the Tribunal agreed to enter a Stipulated Order reducing the property assessment for 2011 and 2012 by approximately $150,000 for each year.

In March, 2012, Colortek received a letter from the attorney for Reliable Analysis demanding payment of an overdue account in the amount of $21,711. The attorney was instructed direct all future correspondence to MWW’s legal counsel. No further request has been received.

WLC brought a lawsuit against MWW to collect past due amounts for services. A consent judgment with installment payment terms. The amount should be paid off in January 2014.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

At January 179, ~~2012~~2013, there were ~~148~~ 470,~~758~~667,~~612~~013 shares of common stock issued and outstanding. There are 1025,~~065,000~~216 shares of common stock that are subject to outstanding options and warrants to purchase common stock. On January 1710, ~~2012~~2013 the closing ask price of our common stock was $0.010003 per share.

The common stock of MWW commenced trading on the OTCBB on September 14, 2006. The following table sets forth, for the calendar quarters indicated, the reported high and low bid quotations per share of the Common Stock as reported on the OTCBB. Such quotations reflect inter-dealer quotations without retail mark-up, markdowns or commissions, and may not necessarily represent actual transactions. On July 9, 2012, the Company affected a three hundred-to-one (300 to 1) reverse stock split of its issued and outstanding shares of common stock, $0.00001 par value (whereby every three hundred shares of Company’s common stock will be exchanged for one share of the Company's common stock).

	High		Low
FISCAL YEAR ENDED SEPTEMBER 30, 2011
FISCAL YEAR ENDED SEPTEMBER 30, 2012
Fourth Quarter	$	0.0201	$	0.010002
Third Quarter		01.02622		0.020601
Second Quarter		05.02045		0.025105
First Quarter		05.02706		0.024505
FISCAL YEAR ENDED September 30, 2010
FISCAL YEAR ENDED September 30, 2011
Fourth Quarter		06.1300		03.0200
Third Quarter		06.1200		06.0200
Second Quarter		06.2800		06.0600
First Quarter		06.3000		06.0800

At January ~~December 31~~10, ~~2011~~2013 MWW had 53 80 common stockholders of record and the share price was $0.010003. MWW has not declared any cash dividends on its common equity for the last two years. It is unlikely that MWW will pay dividends on its common equity in the future and is likely to retain earnings and issue additional common equity in the future.

ITEM 6. SELECTED FINANCIAL DATA

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

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

The following discussion and analysis should be read in conjunction with our consolidated financial statements. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS (CONTINUED)

GENERAL OVERVIEW

MWW operates in a niche market of the supply chain for new passenger motor vehicles and large industrial components primarily in the United States and Canada. MWW ~~participates~~provides services infor the ~~design~~refinishing of ~~new~~specially ~~automobiles~~designed and ~~the~~manufactured ~~building~~automotive ~~of show cars and is a designer and manufacturer of~~ accessories ~~for the customization of cars, sport utility vehicles~~ and ~~light~~large ~~trucks.~~industrial components

MWW's revenues are derived through the sales of its products and services to large automotive and industrial companies. As a consequence, MWW is dependent upon the acceptance of its products in the first instance by the automotive and industrial industry. As a result of this dependence MWW's business is vulnerable to actions which impact ~~the~~these ~~automotive~~industries ~~industry~~ in general, including but not limited to, current fuel costs, and new environmental regulations. Growth opportunities for the Company include expanding its geographical coverage and increasing its penetration of existing markets through internal growth and expanding into new product markets, adding additional customers and acquiring companies in its core ~~industry~~industries that supplement and compliment the currently existing capabilities.

Challenges currently facing the Company include managing its growth and controlling costs. Escalating costs of audits, Sarbanes-Oxley compliance, health care and commercial insurance are also challenges for the Company at this time.

The following specific factors could affect our revenues and earnings in a particular quarter or over several quarterly or annual periods:

· Ability to continue increasing sales opportunities · Ability to convert sales opportunities to actual revenue · Ability to continue controlling our selling, general and administrative costs · Ability to obtain funding adequate to satisfy past obligations and grow future opportunities

· Ability to convert sales opportunities to actual revenue

· Ability to continue controlling our selling, general and administrative costs

· Ability to obtain funding adequate to satisfy past obligations and grow future opportunities

The requirements for our products are complex, and before buying them, customers spend a great deal of time reviewing and testing them. Our customers' evaluation and purchase cycles do not necessarily match our report periods, and if by the end of any quarter or year we have not sold enough new products, our orders and revenues could fall below our plan for a period of time. Like many companies in the automotive accessory industry, a large proportion of our business is attributable to our largest customers. As a result, if any order, and especially a large order, is delayed beyond the end of a fiscal period, our orders and revenue for that period could be below our plan.

The accounting rules we are required to follow permit us to recognize revenue only when certain criteria are met.

CRITICAL ACCOUNTING POLICIES

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

o Accounting for variable interest entities

o Revenue recognition

o Inventories

o Allowance for doubtful accounts

o Stock based compensation

o Derivative liabilities

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.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS (CONTINUED)

REVENUE RECOGNITION

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

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

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

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

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

INVENTORIES

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

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

We are required to estimate the 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. There was $~~20,000~~nil and $20,000 allowance for doubtful accounts at September 30, ~~2011~~2012 and ~~2010~~2011, respectively.

Page 11

STOCK BASED COMPENSATION

At times we issue stock in exchange for payment of certain liabilities or payment of services, including employees in the form of compensation or professional service providers in the form of consulting or other fees. We value the stock issued at the price in which it is trading on the open market.

Page 10

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS (CONTINUED)

DERIVATIVE LIABILITIES

The Company’s Series A and Series E Preferred Stock, convertible debt and certain warrants have reset provisions to the exercise price if the Company issues equity, or a right to receive equity, at a price less than the exercise prices. The Company utilizes the Binomial Lattice Model formula for determining the estimated fair value. All Series A Preferred stock has been purchased by a new investor and new Series E stock has been issued to this investor, pursuant to the corresponding agreement and as explained in more detail in the derivative description.

COMPARISON OF THE YEAR ENDED SEPTEMBER 30, ~~2011~~2012 TO THE YEAR ENDED SEPTEMBER 30, ~~2010~~2011

Revenues

Net revenues were ~~approximately~~ $~~1.9~~790,211 ~~million~~ for the year ended September 30, ~~2011~~2012. Our revenues decreased by $21,~~116~~118,~~102~~038 from $1,908,249 the year ended September 30, ~~2010~~2011. This ~~52.~~58.59% decrease is attributable to the fact we are focusing on our core business, ~~which~~working ~~includes~~with ~~painting,~~automotive ~~seat~~and ~~heaters,~~industrial ~~spoilers~~manufactures on ~~and~~starting ~~body-side~~many ~~moldings~~new projects. The Company is quoting on numerous paint projects and working on new programs for the ~~2012~~ 2013 and ~~2013~~2014 programs that are expected to provide continued revenue growth.

GROSS PROFIT

For the fiscal year ended September 30, ~~2011~~ 2012, MWW's gross profit was $64(310,~~890~~093) (3-39.4024% of revenue) compared to $ 164,~~142,616~~890 (283.3940% of revenue) for the fiscal year ended September 30, ~~2010. MWW sold a greater percentage of its lower margin products in~~ 2011 ~~than in 2010~~. ~~MWW's gross profit margin is influenced by a number of factors and gross margin may fluctuate based on changes in the cost of supplies and product mix.~~

The primary components of cost of sales are direct labor and cost of parts and materials. The ~~Company~~costs ~~has~~of ~~reduced~~initial ~~head~~start-ups ~~count~~have ~~which has~~ driven up the ~~improvement~~cost inof ~~gross~~labor ~~profit.~~and ~~The~~in some cases the cost of parts and materials ~~have~~due to extra usage during the 2012 fiscal year, In general the cost of parts and materials has been consistent from year to year.

OPERATING EXPENSES

Selling, general, and administrative expenses were $1,~~712~~413,~~760~~139 (89178.76 83% of revenues) in ~~2011~~2012 compared to $31,~~129~~712,~~648~~759 (7789.7776 % of revenues) during ~~2010~~2011. The decrease in costs is attributable to management’s stringent efforts to reduce overhead costs.

Significant components of operating expenses consist of professional fees, salaries~~, and impairment losses.~~

OTHER INCOME (EXPENSES)

Financing expenses were $12,~~770~~849,~~169~~830 in 2012 ~~2011~~ compared to $~~367~~1,~~760~~770,170 during ~~2010~~2011. The primary increase is due to forbearance charges by our bank while in default of our real estate mortgage plus the change on the working capital portion of our debt from a traditional bank to a factoring company. The factoring company charges a much higher rate on the borrowings. In addition, we incurred non cash interest expense and amortization of debt discounts relating to our convertible notes of $12,~~268~~562,~~616~~174 in the current year as compared to $61,~~250~~268,616 for the year ended September 31, ~~2010~~2011.

(LOSS) GAIN ON CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY. As described in our accompanying consolidated financial statements, Wewe issued convertible notes with certain conversion features, reset warrants and Series A and Series E Preferred Stock that have certain reset provisions. All of which, we are required to bifurcate from the host financial instrument and mark to market each reporting period. We recorded the initial fair value of the reset provision as a liability with an offset to equity or debt discount and subsequently mark to market the reset provision liability at each reporting cycle.

For the year ended September 30, ~~2011~~2012, we recorded a net ~~gain~~loss of $16,~~173~~475,~~072~~349 in change in fair value of the derivative liability as compared to a gain of $~~784~~1,~~445~~173,072 for the same period the previous year. The changes in the market price of our common stock has affected the fair value of the derivative liability.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, ~~2011~~2012 we had working capital deficit of $4,~~074~~516,~~146~~249. We reported negative cash flow from operating activities of ($~~413~~515,~~751~~077), negative cash flow from investing activities of ($1612,~~832~~860) and positive cash flow from financing of $~~431~~548,~~748~~191.

~~Page~~During 12the years ended September 30, 2012 and 2011, we used $515,077 and $413,751 of cash in operating activities, respectively. Below is a brief summary extracted from our Consolidated Statement of Cash Flows, in tabular format, reconciling our net loss to cash used in operating activities for the years ended September 30, 2012 and 2011:

~~The~~Page negative cash flow from operating activities consists of $2,270,617 net loss, net with $236,603 depreciation and amortization expenses, $145,211 in amortization of deferred financing costs, $502,045 in amortization of debt discounts, $766,571 non cash interest paid, $311,357 stock based compensation, $58,410 loss on settlement of debt, net with gain on change in fair value of derivative liability of $1,173,072, Changes in operating assets were a $114,443 decrease in accounts receivable, $51,097 decrease in inventory, $28,728 decrease in other current assets, $815,473 increase in accounts payable.11

~~Negative~~ITEM ~~cash~~7. ~~flow~~MANAGEMENT'S ~~from~~DISCUSSION ~~investing~~AND ~~activities~~ANALYSIS ofOF ~~($16,832)~~FINANCIAL ~~occurred~~CONDITION ~~primarily~~AND ~~due~~PLAN toOF ~~purchase~~OPERATIONS ~~of assets.~~(CONTINUED)

Cash flows from financing activities were primarily from issuance of notes payable of $538,750, net with repayments of $207,002 and proceeds from the sale of our Series C preferred stock of $100,000.

	Year ended September 30,						Year to year
	2012			2011			Change
Net loss	$	(11,116,725	)	$	(2,270,617	)	$	(8,846,108	)

Non cash items included in operations:
Depreciation and amortization		1,570,728			883,859			686,869
Bad debts		41,909			-			41,909
Non cash interest		1,287,022			766,571			520,451
Loss on settlement and modification of debt		423,504			58,410			365,094
Gain on disposal of subsidiary		(349,322	)		-			(349,322	)
Change in fair value of derivative liability		6,475,349			(1,173,072	)		7,648,421
Stock based compensation		145,180			311,357			(166,177	)
Note payable issued for services		40,775			-			40,775
Changes in operating assets and liabilities		966,503			1,009,741			(43,238	)

	$	(515,077	)	$	(413,751	)	$	(101,326	)

OnThe ~~January~~negative ~~27,~~cash ~~2009,~~flow ~~the~~from ~~Key~~operating activities ~~Bank~~consists ~~notified the Company it was in default~~ of ~~its~~$11,116,725 ~~obligations~~net ~~under~~loss, ~~the~~net ~~line~~with of$184,080 ~~credit~~depreciation ~~agreement~~ and ~~commercial~~amortization ~~mortgage~~expenses, ~~loan~~$111,496 ~~secured~~in ~~by second deed~~ amortization of ~~trust~~deferred onfinancing ~~real~~costs, ~~property~~$41,909 toin ~~JCMD~~bad ~~Properties~~debts, ~~LLC.~~$1,275,152 ~~The~~in ~~notification~~amortization isof ~~declaring the~~ debt ~~obligations in default and is therefore entitling the lender to exercise certain rights and remedies~~discounts, ~~including but not limited to~~$1,287,022 ~~increasing~~non ~~the~~cash interest, $145,180 stock ~~rate~~based tocompensation, ~~the~~$423,504 ~~default~~loss ~~rate~~on settlement and ~~demanding~~modification ~~immediate repayment in full~~ of ~~the principal~~debt, ~~interest and interest swap outstanding liability. Further~~$6,475,349 ~~the~~loss ~~lender~~on ~~notified~~change ~~the~~in ~~Company~~fair ~~that~~value ~~the~~of ~~line~~derivative liability of ~~credit maturing on February 1~~$6,475,349, ~~2009~~net ~~will~~with ~~not~~a begain ~~renewed and no further advances are available~~ on ~~the~~disposal ~~line~~of subsidiary of ~~credit~~$349,322. As Changes ~~discussed~~ in ~~Note~~operating B,assets ~~the~~were ~~Company has entered into~~ a ~~Forbearance Agreement through August 31~~$2,577 increase ~~2009.~~in Asaccounts ~~of September 30~~receivable, ~~2009~~$10,860 ~~the~~decrease ~~Key~~in ~~Bank~~inventory, ~~line~~$nil ofchange ~~credit~~in ~~was~~other ~~repaid~~current ~~through~~assets, ~~the~~$958,220 ~~Company~~increase ~~securing~~in ~~the~~accounts payable ~~below~~and ~~financing~~other ~~with~~current ~~Summit Financial Resources, L~~liabilities.P.

InNegative ~~September,~~cash ~~2009,~~flow ~~Marketing~~from ~~Worldwide,~~investing ~~LLC~~activities of ~~entered into a financing agreement with Summit Financial Resources L.P.~~ (~~Summit~~$12,860) ~~for~~occurred aprimarily ~~maximum~~due ~~borrowing of up~~ to $1purchase ~~million maturing August 31, 2011. 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 financing arrangement has been extended through August 31, 2012.~~

Cash flows from financing activities were primarily from issuance of notes payable of $610,500, net with repayments of $62,309 and proceeds from the sale of our Series C preferred stock of $nil.

On January 27, 2009, the Key Bank notified the Company it was in default of its obligations under the line of credit agreement and commercial mortgage loan secured by second deed of trust on real property to JCMD Properties, LLC. The notification is declaring the debt obligations in default and is therefore entitling the lender to exercise certain rights and remedies, including but not limited to, increasing the interest rate to the default rate and demanding immediate repayment in full of the principal, interest and interest swap outstanding liability. Further, the lender notified the Company that the line of credit maturing on February 1, 2009 will not be renewed and no further advances are available on the line of credit. As discussed in Note 2, the Company has entered into a Forbearance Agreement through August 31, 2009. As of September 30, 2009, the Key Bank line of credit was repaid through the Company securing the below financing with Summit Financial Resources, L.P.

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 $1 million maturing August 31, 2011. 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 financing arrangement has been extended through August 31, 2012. The financing agreement was terminated by the company on June 5, 2012.

Under the arrangement, Summit typically advances to the Company 75% of the total amount of accounts receivable factored. Summit retains 25% 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.

MWW expects its regular capital expenditures to be approximately $100,000 for fiscal ~~2012~~2013. These anticipated expenditures are for continued investments in tooling and equipment used in our business.

~~The~~Page independent registered public accounting firm’s report on our September 30, 2011 consolidated financial statements included in this Form 10-K states that our difficulty in generating sufficient cash flow to meet our obligations and sustain operations raise substantial doubts about the our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.12

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS (CONTINUED)

The independent registered public accounting firm’s report on our September 30, 2012 consolidated financial statements included in this Form 10-K states that our difficulty in generating sufficient cash flow to meet our obligations and sustain operations raise substantial doubts about the our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

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

The Company's existence is dependent upon management's ability to continue developing profitable business opportunities and their ability to obtain adequate financing to fund anticipated growth.

The Company's existence is dependent upon management's ability to raise additional financing and develop profitable operations. Additional financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations

RECENT ACCOUNTING PRONOUNCEMENTS

For information regarding recent accounting pronouncements and their effect on the Company, see “Recent Accounting Pronouncements” in Note B2 of the Notes to Consolidated Financial Statements contained herein.

Page 13

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

INFLATION

The effect of inflation on the Company's revenue and operating results was not significant.

ITEM 7A. 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.

Page 1413

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.

See pages F-1 through F-3347 following:

MARKETING WORLDWIDE CORPORATION

SEPTEMBER 30, ~~2011~~2012

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS		PAGE NO.
Reports of Independent Registered Public Accounting Firms		F-1
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets at September 30, 2011 and 2010		F-2
Consolidated Balance Sheets at September 30, 2012 and 2011		F-2
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended September 30, 2011 and 2010		F-3
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended September 30, 2012 and 2011		F-3
Consolidated Statement of Stockholders’ Deficiency for the Two Years Ended September 30, 2011 and 2010		F-4 – F-5
Consolidated Statement of Stockholders’ Deficiency for the Two Years Ended September 30, 2012		F-4 – F-5
Consolidated Statements of Cash Flows for the Years Ended September 2011 and 2010		F-6
Consolidated Statements of Cash Flows for the Years Ended September 2012 and 2011		F-6
Notes to the Consolidated Financial Statements		F-7 – F-3347

Page 1514

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Marketing Worldwide Corporation

Howell, Michigan

We have audited the accompanying consolidated balance sheets of Marketing Worldwide Corporation as of September 30, ~~2011~~2012 and ~~2010~~2011, and the related consolidated statements of operations, deficiency in stockholders' equity and cash flows for each of the two ~~year~~years in the period ended September 30, ~~2011~~2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based upon our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (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 misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly we express no such opinion. 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 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 Marketing Worldwide Corporation as of September 30, ~~2011~~2012 and ~~2010~~2011, and the results of its operations and its cash flows for each of the two years in the period ended September 30, ~~2011~~2012, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of ~~loan~~ certain loan covenants, and is dependent on securing additional equity and debt financing to support its business efforts. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to this matter are described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

New York, New York /s/ RBSM LLP January 1714, ~~2012~~2013

F-1

MARKETING WORLDWIDE CORPORATION

CONSOLIDATED BALANCE SHEETS

	September 30,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	5,012		$	3,847
Accounts receivable, net		201,476			315,919
Inventories, net		93,303			144,400
Other current assets		-			9,328
Total current assets		299,791			473,494
Property, plant and equipment, net		1,092,686			2,112,457
Other assets:
Capitalized finance costs, net		111,496			205,457
Other assets, net		-			19,400
Total other assets		111,496			224,857
Total assets	$	1,503,973		$	2,810,808
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' DEFICIENCY
Current liabilities:
Bank line of credit	$	21,428		$	209,986
Notes payable and capital leases , current portion		1,518,944			1,863,961
Accounts payable		1,497,101			1,302,177
Warranty liability		75,000			95,000
Other current liabilities		769,458			883,396
Current liabilities of discontinued operations		492,006			492,006
Total current liabilities		4,373,937			4,846,526
Long term debt:
Derivative liability		1,258,634			1,186,670
Warrant liability		427,266			-
Total liabilities		6,059,837			6,033,196
Temporary Equity:
Series A convertible preferred stock, $0.001 par value; 3,500,000 shares designated, issued and outstanding		3,499,950			3,499,950
Commitments and contingencies
Permanent Equity:
Stockholders' Deficiency
Preferred Stock, $0.001 par value; 10,000,000 shares authorized
Series B convertible preferred stock, $0.001 par value, 1,200,000 shares designated; 1,192,308 shares issued and outstanding as of September 30, 2011 and 2010		1,192			1,192
Series C convertible preferred stock, $0.001 par value, 1,000,000 shares designated:
100 and nil shares issued and outstanding as of September 30, 2011 and
September 30, 2010, respectively		-			-
Common stock, $0.001 par value, 500,000,000 and 100,000,000 shares authorized as of September 30, 2011 and 2010, respectively; 71,494,819 and 29,510,091 shares issued and outstanding as of September 30, 2011 and 2010, respectively		71,495			29,510
Additional paid in capital		9,455,051			8,244,895
Accumulated Deficit		(16,947,859	)		(14,358,814	)
Accumulated other comprehensive (loss)		(148,873	)		(148,873	)
Total Marketing Worldwide Corporation Stockholders’ Deficiency		(7,568,994	)		(6,232,090	)
Non-controlling interest		(486,820	)		(490,248	)
Total Stockholders’ Deficiency		(8,055,814	)		( 6,722,338	)
Total Liabilities and Stockholders’ Deficiency	$	1,503,973		$	2,810,808

SEPTEMBER 30, 2012 AND 2011

	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	25,266		$	5,012
Accounts receivable, net		162,144			201,476
Inventories, net		82,443			93,303
Total current assets		269,853			299,791

Property, plant and equipment, net		921,466			1,092,686

Other assets:
Capitalized finance costs, net		-			111,496

Total assets	$	1,191,319		$	1,503,973

LIABILITIES AND DEFICIENCY
Current liabilities:
Bank line of credits	$	-		$	21,428
Notes payable and capital leases, current portion		1,613,810			1,518,944
Accounts payable		1,999,403			1,497,101
Warranty liability		75,000			75,000
Other current liabilities		1,097,889			769,458
Current liabilities of discontinued operations		-			492,006
Total current liabilities		4,786,102			4,373,937

Long term debt:
Derivative liability		10,649,266			1,258,634
Warrant liability		809,967			427,266

Total liabilities		16,245,335			6,059,837

Commitments and contingencies		-			-

Temporary equity:
Series A convertible preferred stock, $0.001 par value; 3,500,000 shares designated, nil and 3,500,000 shares issued and outstanding as of September 30, 2012 and 2011, respectively		-			3,499,950

Permanent equity:
Deficiency
Preferred stock, $0.001 par value; 10,000,000 shares authorized
Series B convertible preferred stock, $0.001 par value, 1,200,000 shares designated; nil and 1,192,308 shares issued and outstanding as of September 30, 2012 and 2011, respectively		-			1,192
Series C convertible preferred stock, $0.001 par value, 1,000,000 shares designated; nil and 100 shares issued and outstanding as of September 30, 2012 and 2011, respectively		-			-
Series D super voting preferred stock, $0.001 par value, 1,000,000 shares designated, 90,002 and nil shares issued and outstanding as of September 30, 2012 and 2011, respectively		90			-
Series E 6% convertible preferred stock, $0.001 par value, 15,000 shares designated, 11,112.5 and nil shares issued and outstanding as of September 30, 2012 and 2011, respectively		11			-
Common stock, $0.00001 and $0.001 par value, 5,900,000,000 and 500,000,000 shares authorized; 52,796,157 and 238,316 shares issued and outstanding as of September 30, 2012 and 2011, respectively		528			2
Additional paid in capital		13,657,583			9,526,544
Accumulated deficit		(28,183,779	)		(16,947,859	)
Accumulated other comprehensive loss		-			(148,873	)
Total Marketing Worldwide Corporation deficiency		(14,525,567	)		(7,568,994	)
Non controlling interest		(528,449	)		(486,820	)
Total deficiency		(15,054,016	)		(8,055,814	)

Total Liabilities and Deficiency	$	1,191,319		$	1,503,973

See the accompanying notes to the consolidated financial statements

F-2

MARKETING WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS ~~AND COMPREHENSIVE LOSS~~

YEARS ENDED SEPTEMBER 30, 2011 AND 2010

	Year ended September 30,
	2012			2011
Revenue	$	790,211		$	1,908,249

Cost of sales		1,100,304			1,843,359

Gross (loss) profit		(310,093	)		64,890

Operating expenses:
Selling, general and administrative expenses		1,413,139			1,712,759
Total operating expenses		1,413,139			1,712,759

Loss from operations		(1,723,232	)		(1,647,869	)

Other income (expense):
(Loss) gain on change in fair value of derivative liability		(6,475,349	)		1,173,072
Financing expenses		(2,849,830	)		(1,770,170	)
Gain on liquidation of international subsidiary		349,322			-
Loss on debt modification		(40,908	)		-
Loss on settlement of debt		(382,596	)		(58,410	)
Other income (expense), net		5,868			32,760
Total other income (expense)		(9,393,493	)		(622,748	)

Net loss		(11,116,725	)		(2,270,617	)

(Loss) income attributable to Non-controlling interest		(41,629	)		3,428

Loss attributable to Company		(11,075,096	)		(2,274,045	)

Preferred stock dividend		(160,825	)		(315,000	)

NET LOSS AVAILABLE TO COMMON STOCKHOLDERS	$	(11,235,921	)	$	(2,589,045	)

Loss per common share, basic and diluted	$	(2.51	)	$	(16.70	)

Weighted average common stock outstanding, basic and diluted		4,481,766			155,035

	2011			2010
Revenues	$	1,908,249		$	4,024,351
Cost of goods sold		1,843,359			2,881,735
Gross profit		64,890			1,142,616
Operating expenses:
Selling, general and administrative expenses		1,712,759			3,129,648
Impairment loss on property, plant and equipment		-			409,823
Impairment loss on customer list (intangible asset)		-			50,000
Loss of disposal of equipment		-			727
Total operating expenses		1,712,759			3,590,198
Loss from operations		(1,647,869	)		(2,447,582	)
Other Income (Expense)
Gain on change in fair value of derivative liability		1,173,072			784,445
Financing expenses		(1,770,169	)		(367,760	)
Loss on settlement of debt		(58,411	)		-
Other (expense) income, net		32,760			94,190
Loss from continuing operations		(2,270,617	)		(1,936,707	)
Loss from discontinued operations		-			(405,018	)
Net Loss		(2,270,617	)		(2,341,725	)
Profit (Loss) Income attributable to Non-controlling interest		3,428			(451,998	)
Loss attributable to Company		(2,274,045	)		(1,889,727	)
Preferred stock dividend		(315,000	)		(315,000	)
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS	$	(2,589,045	)	$	(2,204,727	)
Loss per common share, basic and diluted
Continuing operations	$	(0.05	)	$	(0.09	)
Discontinued operations		-			(0.02	)
Totals	$	(0.05	)	$	(0.11	)
Weighted average common stock outstanding
Basic and diluted		46,510,615			21,002,981
Comprehensive loss:
Net Loss	$	(2,270,617	)	$	(2,341,725	)
Foreign currency translation loss		-			(40,944	)
Comprehensive loss	$	(2,270,617	)	$	(2,382,669	)
Comprehensive income (loss) attributable to non controlling interest		3,428			(451,998	)
Comprehensive loss attributable to Marketing Worldwide Corporation	$	(2,274,044	)	$	(1,930,671	)

See the accompanying notes to the consolidated financial statements

F-3

MARKETING WORLDWIDE CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' ~~DEFICIENCY~~ DEFICIT

TWO YEARS ENDED SEPTEMBER 30, ~~2011 AND 2010~~2012

							Preferred stock-									Additional			Other						Non
	MARKETING WORLDWIDE CORPORATION
	Preferred stock-Series B						Preferred stock-Series C					~~Common~~Preferred stock-Series D				~~Paid~~Preferred instock-Series E			~~Comprehensive~~			~~Accumulated~~			~~controlling~~
	Shares			Amount			Shares			Amount		Shares		Amount		~~Capital~~Shares			~~Income (loss)~~Amount			~~(Deficit)~~			~~Interest~~			~~Total~~
Balance, October 1, 2009		1,192,308		$	1,192			-		$	-		17,835,091	$	17,835	$	9,639,388		$	(107,929	)	$	(12,154,087	)	$	(38,250	)	$	(2,641,851	)
Balance, September 30, 2010		1,192,308		$	1,192			-		$	-		-	$	-		-		$	-
Effective of adoption of Accounting Standards Codification subtopic 815-40		-			-			-			-		-		-		(1,971,115	)		-			-			-			(1,971,115	)
Common stock issued for services rendered		-			-			-			-		-		-		-			-
Common stock issued in settlement of debt		-			-			-			-		500,000		500		29,500			-			-			-			30,000
Common stock issued in settlement of preferred stock dividend		-			-			-			-		-		-		-			-
Common stock issued for services rendered at $0.15 per share		-			-			-			-		80,000		80		11,920			-			-			-			12,000
Common stock issued in settlement of debt		-			-			-			-		-		-		-			-
Common stock issued for services rendered at $0.20 per shares		-			-			-			-		1,520,000		1,520		302,480			-			-			-			304,000
Reclassify conversion feature of convertible note outside of equity		-			-			-			-		-		-		-			-
Common stock issued for services rendered at $0.11 per share		-			-			-			-		1,075,000		1,075		117,175			-			-			-			118,250
Sale of Series C preferred stock		-			-			100			-		-		-		-			-
Fair value of vested options		-			-			-			-		-		-		~~7,796~~			-			-			-			~~7,796~~
Beneficial conversion feature relating to issuance of convertible debt		-			-			-			-		-		-		6,250			-			-			-			6,250
Preferred stock dividend		-			-			-			-		-		-		-			-
Common stock issued for services rendered at $0.02 per share		-			-			-			-		3,500,000		3,500		66,500			-			-			-			70,000
Net loss		-			-			-			-		-		-		-			-
Common stock issued in settlement of debt at $0.02 per share		-			-			-			-		2,000,000		2,000		38,000			-			-			-			40,000
Balance, September 30, 2011		1,192,308			1,192			100			-		-		-		-			-
Common stock issued in settlement of debt at $0.02 per share - JCMD		-			-			-			-		3,000,000		3,000		(3,000	)		-			-			-			-
Common stock issued in settlement of debt		-			-			-			-		-		-		-			-
Foreign currency translation loss		-			-			-			-									(40,944	)								(40,944	)
Common stock issued for services rendered		-			-			-			-		-		-		-			-
Preferred Stock Dividend		-			-			-			-		-		-		-			-			(315,000	)		-			(315,000	)
Common stock issued for conversion of Series A preferred stock		-			-			-			-		-		-		-			-
Net loss		-			-			-			-		-		-		-			-			(1,889,727	)		(451,998	)		(2,341,725	)
Common stock issued in settlement of Series A preferred stock dividend		-			-			-			-		-		-		-			-
Balance, September 30, 2010		1,192,308		$	1,192			-		$	-		29,510,091	$	29,510	$	8,244,894		$	(148,873	)	$	(14,358,814	)	$	(490,248	)	$	(6,722,339	)
Common shares returned previously recorded for services		-			-			-			-		-		-		-			-
Series D preferred stock issued for services rendered		-			-			-					90,002		90		-			-
Series E preferred stock issued in settlement of Series A and Series B preferred stock		(1,192,308	)		(1,192	)		-			-		-		-		11,923			12
Common stock issued in connection with conversion of Series E preferred stock		-			-			-			-		-		-		(811	)		(1	)
Note payable issued in settlement of Series C preferred stock		-			-			(100	)		-		-		-		-			-
Beneficial conversion feature relating to convertible debt		-			-			-			-		-		-		-			-
Fair value of vested options		-			-			-			-		-		-		-			-
Reclassify other comprehensive loss to operations upon termination of international subsidiary
Preferred stock dividend		-			-			-			-		-		-		-			-
Net loss		-			-			-			-		-		-		-			-
Balance, September 30, 2012		-			-			-			-		90,002		90		11,113			11

See the accompanying notes to the consolidated financial statements

F-4

MARKETING WORLDWIDE CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT TWO YEARS ENDED SEPTEMBER 30, 2012

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

	MARKETING WORLDWIDE CORPORATION
									Other			Retained			Non
	Common stock					Additional			Comprehensive			Earnings			controlling
	Shares			Amount		Paid in Capital			Income (loss)			(Deficit)			Interest			Total
Balance, September 30, 2010		98,367		$	1	$	8,274,403		$	(148,873	)	$	(14,358,814	)	$	(490,248	)	$	(6,722,339	)
Common stock issued for services rendered		43,832			-		299,708												299,708
Common stock issued in settlement of preferred stock dividend		17,125			-		472,500			-			-			-			472,500
Common stock issued in settlement of debt		78,992			1		373,165			-			-			-			373,166
Reclassify conversion feature of convertible note outside of equity		-			-		(4,880	)											(4,880	)
Sale of Series C preferred stock		-			-		100,000			-			-			-			100,000
Fair value of vested options							11,648												11,648
Preferred stock dividend		-			-		-			-			(315,000	)		-			(315,000	)
Net loss		-			-		-			-			(2,274,045	)		3,428			(2,270,617	)
Balance, September 30, 2011		238,316			2		9,526,544			(148,873	)		(16,947,859	)		(486,820	)		(8,055,814	)
Common stock issued in settlement of debt		7,808,772			78		1,870,718			-			-			-			1,870,796
Common stock issued for services rendered		28,793,333			288		202,392			-			-			-			202,680
Common stock issued for conversion of Series A preferred stock		15,000			-		1,808,099			-			-			-			1,808,099
Common stock issued in settlement of Series A preferred stock dividend		83,333			1		79,999			-			-			-			80,000
Common shares returned previously recorded for services		(2,000	)		-		(120,000	)		-			-			-			(120,000	)
Series D preferred stock issued for services rendered		-			-		40,411												40,501
Series E preferred stock issued in settlement of Series A and Series B preferred stock		-			-		(19,774	)		-			-			-			(20,954	)
Common stock issued in connection with conversion of Series E preferred stock		15,859,403			159		247,780			-			-			-			247,938
Note payable issued in settlement of Series C preferred stock		-			-		(100,000	)		-			-			-			(100,000	)
Beneficial conversion feature relating to convertible debt		-			-		99,414			-			-			-			99,414
Fair value of vested options		-			-		22,000			-			-			-			22,000
Reclassify other comprehensive loss to operations upon termination of international subsidiary		-			-		-			148,873			-			-			148,873
Preferred stock dividend		-			-		-			-			(160,825	)		-			(160,825	)
Net loss		-			-		-			-			(11,075,096	)		(41,629	)		(11,116,725	)
Balance, September 30, 2012		52,796,157		$	528	$	13,657,583		$	-		$	(28,183,780	)	$	(528,449	)	$	(15,054,016	)

TWO YEARS ENDED SEPTEMBER 30, 2011 AND 2010

					Preferred stock-								Additional			Other						Non
	Preferred stock-Series B				Series C				Common stock				Paid in			Comprehensive			Accumulated			controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Income (loss)			(Deficit)			Interest			Total
Balance, September 30, 2010		1,192,308	$	1,192		-	$	-		29,510,091	$	29,510	$	8,244,894		$	(148,873	)	$	(14,358,814	)	$	(490,248	)	$	(6,722,339	)
Common stock and warrants issued for services rendered		-		-		-		-		13,149,556		13,149		286,559												299,708
Common stock issued in settlement of preferred stock dividend		-		-				-		5,137,500		5,138		467,362			-			-			-			472,500
Common stock issued in settlement of debt		-		-				-		23,697,672		23,698		349,468			-			-			-			373,166
Reclassify conversion feature of convertible note outside of equity		-		-		-		-		-		-		(4,880	)											(4,880	)
Sale of Series C preferred stock		-		-		100		-		-		-		100,000			-			-			-			100,000
Fair value of vested options		-		-		-		-		-		-		11,648			-			-			-			11,648
Preferred stock dividend		-		-		-		-		-		-		-			-			(315,000	)		-			(315,000	)
Net loss		-		-		-		-		-		-		-			-			(2,274,045	)		3,428			(2,270,617	)
Balance, September 30, 2011		1,192,308	$	1,192		100	$	-		71,494,819	$	71,495	$	9,455,051		$	(148,873	)	$	(16,947,859	)	$	(486,820	)	$	(8,055,814	)

See the accompanying notes to the consolidated financial statements

F-5

MARKETING WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended September 30,
	2012			2011

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,116,725	)	$	(2,270,617	)
Adjustments to reconcile net loss to cash used in operations:
Depreciation and amortization		184,080			236,603
Bad debts		41,909			-
Amortization of deferred financing costs		111,496			145,211
Amortization of debt discounts		1,275,152			502,045
Non cash interest		1,287,022			766,571
Loss on settlement of debt		382,596			58,410
Gain on disposal of international subsidiary		(349,322	)		-
Loss on modification of debt		40,908			-
Change in fair value of derivative liability		6,475,349			(1,173,072	)
Fair value of vested employee options		22,000			11,648
Notes payable issued for services rendered		40,775			-
Stock based compensation		243,180			299,709
Cancelation of previously issued common stock for services		(120,000	)		-
(Increase) decrease in operating assets:
Accounts receivable		(2,577	)		114,443
Inventory		10,860			51,097
Other current assets		-			9,328
Other assets		-			19,400
Increase (decrease) in operating liabilities:
Accounts payable and other current liabilities		958,220			815,473
Cash used in operating activities		(515,077	)		(413,751	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(12,860	)		(16,832	)
Cash used in investing activities		(12,860	)		(16,832	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of Series C preferred stock		-			100,000
Proceeds from (repayments of) lines of credit		(21,428	)		(188,558	)
Proceed from issuance of notes		610,500			538,750
Repayments of notes payable and capital leases		(40,881	)		(18,444	)
Cash provided by (used in) financing activities		548,191			431,748

Net increase in cash and cash equivalents		20,254			1,165
Cash and cash equivalents, beginning of period		5,012			3,847

Cash and cash equivalents, end of period	$	25,266		$	5,012

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for interest	$	-		$	-
Cash paid during year for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Common stock issued in settlement of debt	$	1,870,796		$	73,166
Common stock issued in settlement of preferred stock dividends	$	80,000		$	472,500
Accounts payable settled via issuance of notes payable	$	202,120		$	260,120
Preferred dividends declared	$	160,825		$	315,000
Issuance of Series E Preferred Stock in settlement of Series A and Series B Preferred stock	$	2,095,413		$	956,562
Common stock issued upon conversion of Series A preferred stock	$	1,808,099		$	-
Common stock issued upon conversion of Series E preferred stock	$	247,938		$	-
Sale of JCMD property used for repayment of debts	$	-		$	800,000
Note payable issued in exchange for Series C preferred stock	$	100,000		$	-

YEAR ENDED SEPTEMBER 30, 2011 AND 2010

	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss from continuing operations	$	(2,270,617	)	$	(1,936,707	)
Loss from discontinued operations		-			(405,018	)
Net Loss		(2,270,617	)		(2,341,725	)
Adjustments to reconcile net income (loss) to cash (used in) provide by operations:
Depreciation and amortization		236,603			381,509
Amortization of deferred financing costs		145,211			132,293
Amortization of debt discounts		502,045			6,250
Impairment loss on customer list		-			50,000
Impairment loss on sale of property		-			409,823
Non cash interest		766,571			-
Loss on disposal of assets, net					727
Loss on settlement of debt		58,410
Change in fair value of derivative liability		(1,173,072	)		(784,445	)
Fair value of vested employee options		11,648			7,797
Common stock issued for services rendered		299,709			504,250
(Increase) decrease in operating assets:
Accounts receivable		114,443			421,173
Inventory		51,097			398,675
Other current assets		9,328			15,236
Other assets		19,400			-
Increase (decrease) in operating liabilities:
Accounts payable and other current liabilities		815,473			935,343
Cash (used in) provided by continuing operating activities		(413,751	)		136,906
Cash provided discontinued operating operations		-			214,183
Net cash (used in) provided by operating activities:		(413,751	)		351,089
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, continuing operations		(16,832	)		(8,400	)
Cash provided by (used) in discontinued investing activities		-			149,002
Net cash (used in) provided by investing activities:		(16,832	)		140,602
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of Series C preferred stock		100,000			-
Proceeds from (repayments of) lines of credit		(188,558	)		(511,238	)
Proceed from issuance of notes		538,750			-
Proceeds from (repayments of) notes payable and capital leases		(18,444	)		(76,978	)
Cash (used in) provided by continuing financing activities		431,748			(588,216	)
Cash provided by discontinued financing activities		-			27,777
Net cash provided by (used in) financing activities		431,748			(560,439	)
Effect of currency rate change on cash:		-			(40,944	)
Net increase (decrease) in cash and cash equivalents		1,165			(109,692	)
Cash and cash equivalents, beginning of period		3,847			113,539
Cash and cash equivalents, end of period	$	5,012		$	3,847
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for interest	$	-		$	367,760
Cash paid during year for taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Common stock issued in settlement of debt	$	373,166		$	70,000
Common stock issued in settlement of preferred stock dividends	$	472,500		$	-
Note payable issued for settlement of accounts payable	$	260,120		$	-
Preferred dividend	$	315,000		$	315,000
Beneficial conversion feature credited to derivative liability	$	956,562		$	-
Sale proceeds from JCMD property used for repayment of debts	$	800,000		$	-

See the accompanying notes to the consolidated financial statements

F-6

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2011~~2012 AND ~~2010~~2011

NOTE 1 - 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 subsidiaries, Marketing Worldwide LLC ("MWW"), and Colortek, Inc. (“CT”) in the design, manufacturing, painting and distribution of automotive accessories for motor vehicles in the automotive aftermarket ~~industry~~ and ~~provides~~industrial ~~design~~components ~~services~~ for ~~large~~the commercial ~~automobile~~machinery ~~manufacturers~~industries. The Company ~~has~~had a wholly owned subsidiary in Germany, Modelworxx, GmbH, which, in February, 2010, filed insolvency in the German courts. As ofThe ~~the~~Company ~~date~~has ofreclassified ~~this filing~~Modelworxx, ~~the~~GmbH ~~Company~~fiscal ~~has~~year ~~not~~ended ~~received~~September ~~the~~30, ~~final~~2011 ~~determination~~balances to ~~from~~reflect ~~the~~them ~~German~~as ~~Courts.~~discontinued ~~The~~operations ~~Company~~and ~~has~~upon ~~reclassified~~final ~~Modelworxx~~liquidation, ~~GmbH~~recognized ~~fiscal~~a ~~year~~net ~~ended~~gain ~~September~~on ~~30,~~disposal ~~2011~~of ~~and~~international ~~2010~~subsidiary of ~~balances~~$349,322 toduring ~~reflect~~the ~~them~~year asended ~~discontinued~~September ~~operations~~30, 2012.

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for annual financial statements and with Form 10-K and article 8 of the Regulation S-X of the United States Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and Variable Interest Entity (“VIE”). All significant inter-company transactions and balances, including those involving the VIE, have been eliminated in consolidation.

NOTE 2 - SUMMARY OF 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 uncollectible accounts receivable are recorded in the financial statements.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“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.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with a maturity of less than three months at purchase to be cash equivalents. The Company did not have any cash equivalents at September 30, ~~2011~~2012 and ~~2010~~2011. Cash balances at financial institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, cash and cash equivalents may be uninsured or in deposit accounts that exceed the FDIC insurance limits. Periodically, the Company evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

F-7

~~MARKETING~~NOTE ~~WORLDWIDE~~2 ~~CORPORATION~~– SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Warranty

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. Warranty expense is estimated based primarily on historical experience and is reflected in the financial statements.

Accounting for bad debt and allowances

Bad debts and allowances are provided based on historical experience and management's evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at September 30, ~~2011~~2012 and ~~2010~~2011 approximated $~~20,000~~nil and $20,000, respectively.

Inventories

The inventories are stated at the lower of cost or market using the first-in, first-out method of valuation. The inventories at September 30, ~~2011~~2012 and ~~2010~~2011 are as follows:

	2011			2010
	2012			2011
Work in process	$	~~294~~197,~~568~~926		$	~~325~~294,~~997~~568
Finished goods		6724,~~369~~686			7867,~~534~~369
Total inventory before reserve		~~361~~222,~~937~~612			~~404~~361,~~531~~937
Less inventory reserve		(~~268~~139,~~634~~729	)		(~~260~~268,~~131~~634	)
Net inventory	$	9382,~~303~~443		$	~~144~~93,~~400~~303

The inventory reserve is determined after an exhaustive review and analysis of all inventories on hand. The Company examines the likelihood of salability of each inventory item, and if there is more than 6 months supply of an item on hand, an appropriate reserve is recorded against such inventory; for cancelled or completed programs, existing inventory is 100 % reserved for. During the year ended September 30, 2012, the Company write-off from reserve $128,905. At September 30, ~~2011~~2012 and ~~2010~~2011 the majority of the inventory reserve is for supply of product no longer in production or demand from existing customers.

Long lived assets

The Company follows Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires those long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.

F-8

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. Gains and losses from the retirement or disposition of property and equipment are included in operations in the period incurred. Maintenance and repairs are expensed as incurred.

Research and development costs

The Company accounts for research and development cost in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). ASC 730-10, requires research and development costs to be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Total research and development cost charged to income was immaterial for both years ended September 30, ~~2011~~2012 and ~~2010~~2011.

F-8

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

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”). All primary dilutive common shares have been excluded since the inclusion would be anti-dilutive. Such shares consist of the following at September 30, ~~2011~~2012 and ~~2010~~2011:

	2011		2010
	2012		2011
Warrants		716,~~375,000~~250		~~100~~24,~~000~~583
Options		28,~~690,000~~967		18,~~590,000~~967
Series A preferred stock		~~21,312,772~~-		2271,~~616,981~~043
Convertible Debt		120,357,052		357,143
Series E preferred stock		3,704,166,667		-
Totals		151,734,824		24,664,124
Convertible Debt		2,513,335,088		401,190
Totals		6,217,526,972		505,783

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 operating loss and tax credit carry forwards. 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 operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. The benefit of tax positions taken or expected to be taken in the Company’s income tax returns are recognized in the consolidated financial statements if such positions are more likely than not of being sustained.

In accordance with 740-10, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting this standard, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company will classify as income tax expense any interest and penalties recognized in accordance with ASC Topic 740. The tax years ending September 30, ~~2008~~2010, ~~2009,~~2011 ~~2010~~ and ~~2011~~2012 are still open for review by the various tax jurisdictions. The state tax jurisdictions the Company files in are South Carolina, Florida, California and Michigan.

F-9

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting year. The Company deems its critical estimates to be the determination of inventory values, the allowance for doubtful accounts, stock based compensation, derivative liabilities, and impairment losses. Actual results could differ from those estimates.

Foreign currency

The functional currency of the Company is the U. S. dollar. When a transaction is executed in a foreign currency, it is re-measured into U. S. dollars based on appropriate rates of exchange in effect at the time of the transaction. At each balance sheet date, recorded balances that are denominated in a currency other than the functional currency of the Companies are adjusted to reflect the current exchange rate. The related translation adjustments are included in other comprehensive income. The resulting foreign currency transactions gains (losses), which were not material, are included in selling, general and administration expenses in the accompanying consolidated statements of operations.

Fair value of financial instruments

Cash, accounts receivable, accounts payable and accrued expenses approximates fair value because of their short-term nature. The fair value of notes payable and short-term debt is estimated to approximate fair market value based on the current rates available to companies such as MWW.

F-9

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Derivative financial instruments

Accounting Standards Codification subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC 815-40”) became effective for the Company on October 1, 2009. The Company’s Series A Preferred Stock, convertible debt and certain warrant have reset provisions to the exercise price if the Company issues equity, or a right to receive equity, at a price less than the exercise prices.

Reclassification

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

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.

The Variable Interest Entity included in these consolidated financial statements sold the only asset it owned, which was real estate subject to a lease with the Company, for $800,000 on November 30, 2010. This sale resulted in a loss of approximately $400,000 and left a remaining liability to the Small Business Administration of approximately $500,000 which is guaranteed by the Company. As of the date of this filing, the Company has not received any specific demands or requests for payment on this loan. This loss was recorded as an impairment loss in the September 30, 2010 consolidated financial ~~statements~~statement.

F-10

Deferred financing costs

Deferred financing costs represent costs incurred in connection with obtaining the debt financing. These costs are amortized to financing expenses over the term of the related debt using the interest rate method. The amortization for the years ended September 30, ~~2011~~2012 and ~~2010~~2011 was $~~145~~111,~~211~~ 496 and $~~132~~145,~~293~~211, respectively. Accumulated amortization of deferred financing costs were $~~601~~712,~~219~~715 and $~~456~~601,~~008~~219 at September 30, ~~2011~~2012 and ~~2010~~2011, respectively.

Segment information

Accounting Standards Codification subtopic 280-10, Segment Reporting (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed therein materially represents all of the financial information related to the Company's principal operating segments.

The Company has one reportable business segment which is operated in the United States. In previous years the Company had financial activity in Germany, but in February, 2010 the German affiliate filed bankruptcy and all activity has been classified as discontinued operations in the presented financial statements for the year ended September 30, 2011 and subsequently liquidated during the year ended September 30, 2012.

F-11

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Stock based compensation

The Company accounts for stock based awards issued to employees in accordance with FASB guidance. Such awards consist of options to purchase common stock. The fair value of stock based awards is determined on the grant date using a valuation model. The fair value is recognized as compensation expense, net of estimated forfeitures, on a straight-line basis over the service period, which is normally the vesting period.

The Company granted 2,200,000 employee options during the year ended September 30, 2011 and nil during the year ended September 30, 2010. The Company recorded the fair value of the vested portion of issued employee options of $11,648 and $7,796 for the years ended September 30, 2011 and 2010, respectively.F-10

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

The Company granted nil employee options during the year ended September 30, 2012 and 2,200,000 (7,333 post reverse stock split of 1:300) during the year ended September 30, 2011. The Company recorded the fair value of the vested portion of issued employee options of $22,000 and $11,648 for the years ended September 30, 2012 and 2011, respectively.

Recent accounting pronouncements

InThere ~~May~~were ~~2011,~~various ~~FASB~~updates ~~issued~~recently ~~Accounting Standards Update (ASU) No. 2011-04~~issued, ~~Amendments~~most ~~to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU No. 2011-04 amends and clarifies the measurement and disclosure requirements~~ of ~~FASB~~which ~~ASC~~represented technical ~~820,~~corrections ~~resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how~~ to ~~apply~~the ~~existing~~accounting ~~fair~~literature ~~value~~or ~~measurement~~application ~~and disclosure requirements, and changes~~ to ~~certain~~specific ~~principles~~industries and ~~requirements for measuring fair value and disclosing information about fair value measurements. The new requirements~~ are ~~effective~~not ~~for~~expected ~~fiscal years beginning after December 15, 2011. The Company plans~~ to ~~adopt~~a ~~this amended guidance on October 1, 2012 and at this time does not anticipate that it will~~ have a material impact on the Company’'s consolidated financial position, results of operations, ~~cash flows~~ or ~~financial~~cash ~~position~~flows.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, FASB ASU No. 2011-05 requires that all nonowner changes in shareholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements, as currently set forth, are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s consolidated results of operations, cash flows or financial position.

In September 2011, FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, which amended goodwill impairment guidance to provide an option for entities to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-step impairment test is no longer required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s consolidated results of operations, cash flow or financial position.

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

F-12

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 3 - GOING CONCERN MATTERS AND TRIGGERING EVENTS

The accompanying 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 consolidated financial statements during the year ended September 30, ~~2011~~2012, the Company incurred a net loss attributable to common stockholders of $211,~~270~~075,~~617~~096.

The Company has incurred substantial recurring losses. The ~~accompanying consolidated financial statements have been prepared assuming that the~~ Company ~~will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company~~ has available cash of $525,~~012~~266 at September 30, ~~2011~~2012 and during the year ended September 30, ~~2011~~ 2012, the Company used cash of $~~413~~515,~~751~~077 in operating activities. The Company’s working capital deficiency was approximately $4,~~074~~516,000 and $4,~~373~~074,000 as of September 30, ~~2011~~2012 and ~~2010~~2011 respectively. The Company’s accumulated deficit was approximately $1728,000,000 and $1417,~~400~~000,000 as of September 30, ~~2011~~2012 and ~~2010~~2011 respectively. In addition, the Company has a ~~stockholders’~~ deficit of approximately $815,000,000 at September 30, ~~2011~~2012. ~~The Company has pledged all of its assets to Summit Financial Resources (Summit) as security for the Summit loan agreement~~

FCT is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. The Company invested approximately $2 million into this paint facility and expect the majority of future growth to come from this business. The Company has restructured the management of this subsidiary and even though revenues are down, the Company has successfully gained more significant new business opportunities. . These opportunities take time to develop before converted to revenue. CT is aggressively beginning to diversify to non-13automotive paint applications (industrial equipment) which Management believes will help stabilize the Company going forward.

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 3 - GOING CONCERN MATTERS AND TRIGGERING EVENTS (CONTINUED)

CT is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. The Company invested approximately $2 million into this paint facility and expect the majority of future growth to come from this business. The Company has restructured the management of this subsidiary and even though revenues are down, the Company has successfully gained more business opportunities than ever before. These opportunities take time to develop before converted to revenue. CT is aggressively beginning to diversify to non-automotive paint applications (industrial equipment) which we believe will help stabilize the Company going forward. CT currently has submitted quotes for new business opportunities aggregating approximately $20 million in revenue.

If the Company runs out of available capital, it might be required to pursue additional highly dilutive equity or debt issuances to finance its business in a difficult and hostile market, including possible equity financings at a price per share that might be much lower than the per share price invested by current shareholders. No assurance can be given that any source of additional cash would be available to the Company. If no source of additional cash is available to the Company, then the Company would be forced to significantly reduce the scope of its operations.

There can be no assurance that such funding initiatives will be successful and any equity placement could result in substantial dilution to current stockholders. The above factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 –- ~~INTANGIBLE~~PROPERTY, ~~ASSETS~~PLANT AND EQUIPMENT

~~The~~At Company had intangible assets as a result of previous acquisition of Colortek, Inc. The intangible assets were representative of value assigned to an existing customer list at the time of acquisition. The Company reviewed the list at September 30, ~~2010~~2012 and ~~deemed the remaining balance or $50~~2011,~~000~~ ~~to be worthless. This amount was charged to operations as impairment in the year ended September 30~~property, plant ~~2010. The~~and ~~Company~~equipment ~~did~~consist ~~not have any intangible assets as~~ of ~~September~~the ~~30, 2011.~~ following:

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT

	2012			2011			Range of Estimated Life

Land	$	150,000		$	150,000			N/A
Building		800,000			800,000			40 years
Office equipment		34,645			34,645			3 – 7 years
Tooling and other equipment		1,430,499			1,417,640			7 – 10 years
Subtotal		2,415,144			2,402,285
Less land and building depreciation		(1,493,678	)		(1,309,599	)
Net property, plant and equipment	$	921,466		$	1,092,686

AtDepreciation ~~September~~expense ~~30,~~included ~~2011~~as ~~and~~a ~~2010~~charge to operations of $184,080 ~~property~~and $236,603 ~~plant~~for ~~and~~the ~~equipment~~years ~~consist~~ended ofSeptember ~~the~~30, ~~following:~~2012 and 2011 respectively.

	2011			2010			Range of Estimated Life
Land	$	150,000		$	411,645			N/A
Building		800,000			1,915,700		40 years
Office equipment		34,645			79,893		3 – 7 years
Tooling and other equipment		1,417,640			1,448,360		7 – 10 years
Subtotal		2,402,285			3,855,598
Less land and building impairment		-			(409,823	)
Total		2,402,285			3,445,775
Less accumulated depreciation		(1,309,599	)		(1,333,319	)
Net property, plant and equipment	$	1,092,686		$	2,112,456

F-11

~~Depreciation~~NOTE 5 ~~expense~~- ~~included~~LINE asOF ~~a charge to operations of $236,603 and $357,452 for the years ended September 30, 2011 and 2010 respectively.~~CREDIT

~~F-14~~In August, 2009, the Company entered into a financing agreement with Summit Financial Resources L.P. (Summit) for a maximum borrowing of up to $1,000,000 maturing August 31, 2010. The arrangement is based on recourse factoring of the Company’s accounts receivables. Substantially all assets within the consolidation group have been pledged as collateral for the Summit facility. The financing agreement was extended for one year through August 31, 2012. The financing agreement was terminated by the company on June 5,2012

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

NOTE 6 - LINE OF CREDIT

In August, 2009, the Company entered into a financing agreement with Summit Financial Resources L.P. (Summit) for a maximum borrowing of up to $1,000,000 maturing August 31, 2010. The arrangement is based on recourse factoring of the Company’s accounts receivables. Substantially all assets within the consolidation group have been pledged as collateral for the Summit facility. The financing agreement was extended for one year through August 31, 2012. The Company is evaluating the necessity of continuing this agreement and may terminate the relationship by August 31, 2012.

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 September 30, 2011, the advance balance due to Summit was $~~21,428~~nil. ~~The interest rate at September 30, 2011 was 4.25%.~~

NOTE 76 -– CONVERTIBLE NOTES PAYABLE

At September 30, ~~2011~~2012 and ~~2010~~2011, convertible notes payable consists of the following:

	2011		2010
	2012		2011
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. In addition to the Company the JCMD General Partners personally guarantee the loan. (*)	$	-	$	669,352
JCMD Mortgage loan payable in 240 monthly principal installments plus interest. The loan was secured by a second deed of trust on real property and improvements located in Howell, MI. In addition to the Company the JCMD General Partners personally guarantee the loan The note is in default. (*)	$	489,755	$	489,755
JCMD Mortgage loan payable in 240 monthly principal installments plus interest. The loan was secured by a second deed of trust on real property and improvements located in Howell, MI. In addition to the Company the JCMD General Partners personally guarantee the loan The note is in default. (*)		489,755		538,800
Colortek Mortgage loan payable in monthly principal installments of $5,961 with a fixed interest rate of 6.75% 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. (**)		553,646		587,026
Colortek Mortgage loan payable in monthly principal installments of $5,961 with a fixed interest rate of 6.75% 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. (**)		587,026		620,595
Note payable issued February 19, 2011, due contingent on certain events with interest at 5% per annum, unsecured, net of unamortized debt discount of $66,214		-		118,008
Note payable issued February 19, 2011, due contingent on certain events with interest at 5% per annum, unsecured, net of unamortized debt discount of $66,214		118,008		-
Note payable issued March 22, 2011, due on December 28, 2011 with interest at 8% per annum, unsecured, net of unamortized debt discount of $7,918		-		17,082
Note payable issued March 22, 2011, due on December 28, 2011 with interest at 8% per annum, unsecured, net of unamortized debt discount of $7,918		17,082		-
Note payable issued May 6, 2011, due February 10, 2012 with interest at 8% per annum, unsecured, net of unamortized debt discount of $14,250		-		15,750
Note payable issued on June 29, 2011, due July 1, 2012, with interest at 8% per annum, unsecured, net of unamortized debt discount of $186,821		138,000		63,179
Note payable, issued on January 10, 2011, due July 10, 2011, with interest at 7% per annum, unsecured		-		127,000
Note payable issued on July 1, 2011, due July 1, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $18,135		25,000		6,865
Note payable issued on July 15, 2011, due July 15, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $78,904		-		21,096
Note payable issued on July 20, 2011, due July 20, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $12,041		15,000		2,959
Note payable issued on July 21, 2011, due July 21, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $28,192		35,000		6,808
Note payable issued on July 20, 2011, due January 31, 2012, with interest at 5% per annum, unsecured, net of unamortized debt discount of $19,720		-		57,005
Note payable issued August 16, 2011, due August 15, 2012 with interest at 16% per annum, unsecured, net of unamortized debt discount of $23,753		-		6,247
Note payable issued September 28, 2011, due September 27, 2012 with interest at 16% per annum, unsecured, net of unamortized debt discount of $29,836		-		164
Note payable, issued December 6, 2011, due September 27, 2012, with default interest At 22% per annum, unsecured, Note is in default		12,350		-

F-1512

~~MARKETING~~NOTE 6 ~~WORLDWIDE~~– ~~CORPORATION~~CONVERTIBLE NOTES PAYABLE (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note payable, issued on February 1, 2012, due November 2, 2012, with interest at 8% per annum, unsecured, net of unamortized debt discount of $4,338		43,162			-
Note payable, issued on February 15, 2012, due February 15, 2013, with interest At 10% per annum, unsecured, net of unamortized debt discount of $18,767		31,233			-
Note payable, issued on February 22, 2012, due November 22, 2012, with interest at 8% per annum, unsecured, net of unamortized debt discount of $17,973		74,643			-
Note payable, issued on April 25, 2012, due January 30, 2013, with interest at 8% per annum, unsecured, net of unamortized debt discount of $19,607		25,393			-
Note payable, issued on May 16, 2012, due December 31, 2012, with interest at 6% per annum, unsecured, net of unamortized debt discount of $32,140		47,860			-
Note payable, issued on May 16, 2012, due December 31, 2012, with interest at 6% per annum, unsecured, net of unamortized debt discount of $32,140		47,860			-
Note payable, issued on June 1, 2012, due December 31, 2012, with interest at 6% per annum, unsecured, net of unamortized debt discount of $41,132		54,098			-
Note payable, issued on July 30, 2012, due March 31, 2013, with interest at 8% per annum, unsecured, net of unamortized debt discount of $37,500		12,500			-
Note payable, issued on August 2, 2012, due May 6, 2013, with interest at 8% per annum, unsecured, net of unamortized debt discount of $15,740		4,260			-
Notes payable, issued on September 12, 2012, due March 31, 2013, with interest at 8% per annum, unsecured, net of unamortized debt discount of $40,950		4,050			-
Note payable, issued on September 30, 2012, due December 31, 2012, with interest at 6% per annum, unsecured, net of unamortized debt discount of $40,775		-			-
Total		1,613,810			1,518,944
Less Current portion		(1,613,810	)		(1,518,944	)
Long term portion	$	-		$	-

SEPTEMBER 30, 2011 AND 2010

NOTE 7 - NOTES PAYABLE CONTINUED

	2011		2010
Note payable issued May 6, 2011, due February 10, 2012 with interest at 8% per annum, unsecured, net of unamortized debt discount of $14,250		15,750
Note payable issued on June 29, 2011, due July 1, 2012, with interest at 8% per annum, unsecured, net of unamortized debt discount of $186,821		63,179
Note payable, issued on January 10, 2011, due July 10, 2011, with interest at 7% per annum, unsecured		127,000		-
Note payable issued on July 1, 2011, due July 1, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $18,135		6,865
Note payable issued on July 15, 2011, due July 15, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $78,904		21,096
Note payable issued on July 20, 2011, due July 20, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $12,041		2,959
Note payable issued on July 21, 2011, due July 21, 2012, with interest at 16% per annum, unsecured, net of unamortized debt discount of $28,192		6,808
Note payable issued on July 20, 2011, due January 31, 2012, with interest at 5% per annum, unsecured, net of unamortized debt discount of $19,720		57,005
Note payable issued August 16, 2011, due August 15, 2012 with interest at 16% per annum, unsecured, net of unamortized debt discount of $23,753		6,247
Note payable issued September 28, 2011, due September 27, 2012 with interest at 16% per annum, unsecured, net of unamortized debt discount of $29,836		164
Other		-		35,214
Total	$	1,518,944	$	1,863,961

(*) 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. On November 30, 2010, the real estate securing the mortgage loan payable was sold and the first deed of trust was fully retired. The proceeds from the sale of real estate did not retire the balance of the loan secured by the second deed of trust. There is a shortfall of approximately $490,000 that will continue to be carried as a liability to SBA and will be adjusted once the offer in compromise has been accepted. The sale of real estate for $800,000 which was less than the carrying value of $1,210,000, resulted in the Company recording an impairment charge of approximately $410,000 for the year ended September 30, 2010.

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

Note issued February 16, 2011

On February 16, 2011, the Company issued a $50,000 Convertible Promissory Note that matured on November 18, 2011. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 55% of the lowest three trading days 10 days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 16, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $143,402 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	385.15	%
Risk free rate:	0.16	%

The initial fair value of the embedded debt derivative of $143,402 was allocated as a debt discount up to the proceeds of the note ($50,000) with the remainder ($93,402) charged to current period operations as interest expense.

During the year ended September 30, 2011, the Company amortized $50,000 to current period operations as interest expense.

F-16

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

In September 2011, the Company issued an aggregate of 8,726,190 shares of its common stock in settlement of the Convertible Promissory Note and related accrued interest.

Promissory Note issued February 19, 2011

On February 19, 2011, the Company issued a Promissory Note for $260,120 in exchange for previously accrued consulting services. The Note bears an interest rate of 5% per annum, payable semi-annually beginning November 1, 2011 and is due upon the occurrence of certain bankruptcy or reorganization events. The Promissory Note is convertible into the Company’s common stock at any time at the holder’s option, into common stock at the conversion rate of 90% of the lowest three trading days 10 days prior to notice of conversion.

F-13

NOTE 6 - NOTES PAYABLE (CONTINUED)

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 19, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $240,321 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	390.68	%
Risk free rate:	0.28	%

The initial fair value of the embedded debt derivative of $240,321 was allocated as a debt discount.

During the ~~year~~years ended September 30, 2012 and 2011, the Company amortized and wrote off $66,214 and $174,107 to current period operations as interest expense, respectively.During the years ended September 30, 2012 and 2011, the Company issued an aggregate of 7134,~~902~~744 and 26,~~552~~342 shares of its common stock in settlement of $184,223 and $75,897 of notes payable, respectively.

During the year ended September 30, 2011, the Company amortized and wrote off $174,107 to current period operations as interest expense.

The fair value of the described embedded derivative of $198,065 at September 30, 2011 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.13	%

At September 30, 2011, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $42,256 for the year ended September 30, 2011.

Note issued March 22, 2011

On March 22, 2011, the Company issued a $25,000 Convertible Promissory Note that matures on December 28, 2011. The note bears interest at a rate of 8% and will be convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 55% of the lowest three trading days 10 days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on March 22, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $83,744 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	426.05	%
Risk free rate:	0.25	%

F-17

The initial fair value of the embedded debt derivative of $83,744 was allocated as a debt discount up to the proceeds of the note ($25,000) with the remainder ($58,744) charged to current period operations as interest expense.

During the ~~year~~years ended September 30, 2012 and 2011, the Company amortized $7,918 and $17,082 to current period operations as interest expense, respectively.

~~The~~During ~~fair~~the ~~value~~year ofended ~~the~~September ~~described~~30, ~~embedded~~2012, ~~derivative~~the ofCompany ~~$36,409~~issued an ataggregate ~~September~~of 3012,049 ~~2011~~shares ~~was~~of ~~determined~~its ~~using~~common ~~the~~stock ~~Binomial~~in ~~Lattice~~settlement ~~Model~~of ~~with~~ the ~~following~~notes ~~assumptions:~~payable.

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.2	%

At September 30, 2011, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $47,335 for the year ended September 30, 2011.

Note issued May 6, 2011

On May 6, 2011, the Company issued a $30,000 Convertible Promissory Note that matures on February 10, 2012. The note bears interest at a rate of 8% and will be convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 55% of the lowest three trading days 10 days prior to notice of conversion.

F-14

NOTE 6 - NOTES PAYABLE (CONTINUED)

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on May 6, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $52,318 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	438.48	%
Risk free rate:	0.7	%

The initial fair value of the embedded debt derivative of $52,318 was allocated as a debt discount up to the proceeds of the note ($30,000) with the remainder ($22,318) charged to ~~current period~~ operations as interest expense in September 30, 2011.

During the year ended September 30, 2012 and 2011, the Company amortized $14,250 and $15,750 to current period operations as interest expense, respectively.

~~The~~During ~~fair~~the ~~value~~year ofended ~~the~~September ~~described~~30, ~~embedded~~2012, ~~derivative~~the ofCompany ~~$52,113~~issued an ataggregate ~~September~~of 3039,319 ~~2011~~shares ~~was~~of ~~determined~~its ~~using~~common ~~the~~stock ~~Binomial~~in ~~Lattice~~settlement ~~Model~~of ~~with~~ the ~~following~~notes ~~assumptions:~~payable.

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.6	%

At September 30, 2011, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $205 for the year ended September 30, 2011.

F-18

Note issued June 29, 2011

On June 29, 2011, the Company issued a $250,000 Convertible Promissory Note that matures on July 1, 2012. The note bears interest at a rate of 8% and will be convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of the lower of the lowest of a) conversion rate offered for any other financial instrument or b) $0.04 per share.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on March 22, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $440,372 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	406.84	%
Risk free rate:	0.19	%

The initial fair value of the embedded debt derivative of $440,372 was allocated as a debt discount up to the proceeds of the note ($250,000) with the remainder ($190,372) charged to ~~current period~~ operations as interest expense in September 30, 2011.

During the ~~year~~years ended September 30, 2012 and 2011, the Company amortized $186,821 and $63,179 to current period operations as interest expense, respectively.

~~The~~During ~~fair~~the ~~value~~year ofended ~~the~~September ~~described~~30, ~~embedded~~2012, ~~derivative~~the ofCompany ~~$434,272~~issued an ataggregate ~~September~~of 30367,824 ~~2011~~shares ~~was~~of ~~determined~~its ~~using~~common ~~the~~stock ~~Binomial~~in ~~Lattice~~settlement ~~Model~~of ~~with~~$112,000 of the ~~following~~notes ~~assumptions:~~payable.

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.13	%

The fair value of the described embedded derivative of $696,514 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

At September 30, 2011, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $6,100 for the year ended September 30, 2011.

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.06	%

F-15

NOTE 6 - NOTES PAYABLE (CONTINUED)

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $262,242 for the year ended September 30, 2012

Note issued January 10, 2011

On January 10, 2011, the Company issued a Promissory Note for $127,000 in exchange for previously accrued services. The Note bears an interest rate of 7% per annum and matured on July 10, 2011. Upon maturity of the note, since the Company has not pay the holder the principal and interest due, the holder has the right to convert all principal and interest into the Company's common stock at 75% of the average closing bid price of the Company's common stock during the five days preceding the date of maturity. This is convertible into approximately 7.7 million shares (approx. 25,700 shares post reverse split of 1:300) of the Company’s common stock.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into in January 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $133,073 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	411.17	%
Risk free rate:	0.19	%

The initial fair value of the embedded debt derivative of $133,073 was allocated as a debt discount up to the proceeds of the note ($127,000) with the remainder ($6,073) charged to ~~current period~~ operations as interest expense in September 30, 2011.

During the year ended September 30, 2011, the Company amortized $127,000 to current period operations as interest expense.

~~F-19~~This note was assigned on November 28, 2011 (see below).

The fair value of the described embedded derivative of $50,332 at September 30, 2011 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.2	%

At September 30, 2011, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $82,741 for the year ended September 30, 2011.

Notes issued during in July 2011:

During the month of July 2011, the Company issued an aggregate of $175,000 Convertible Promissory Note that matures one year from the date of issuance. These notes bear interest at a rate of 16% and will be convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of the lower of the lowest of a) conversion rate offered for any other financial instrument or b) $0.04 per share.

The Company identified embedded derivatives related to the Convertible Promissory Notes entered into in July 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $365,839 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	406.84 to 411.17	%
Risk free rate:	0.2	%

In conjunction with the issuance of the Convertible Promissory Notes, the Company issued an aggregate of 4,375,000 detachable warrants (14,583 post reverse stock split of 1:300) exercisable five years from the date of issuance with an initial exercise price of $0.04 per share ($12 per share post reverse stock split of 1:300).

F-16

NOTE 6 - NOTES PAYABLE (CONTINUED)

The Company identified embedded derivatives related to the warrants issued July 2011. These embedded derivatives included certain reset provisions. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date to adjust the fair value as of each subsequent balance sheet date. At the date of issuance, the Company determined a fair value of $112,497 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	406.84 to 411.17	%
Risk free rate:	1.46 to 1.80	%

The initial fair values of the embedded debt derivative of $365,839 and warrants of $112,497 was allocated as a debt discount up to the proceeds of the note ($174,247) with the remainder ($304,089) charged to ~~current period~~ operations as interest expense in September 30, 2011.

During the ~~year~~years ended September 30, 2012 and 2011, the Company amortized $137,272 and $36,975 to current period operations as interest expense, respectively.

~~The~~During ~~fair~~the ~~value~~year ofended September 30, 2012, the ~~described~~Company ~~embedded~~issued an ~~derivative~~aggregate of ~~$305~~88,~~332~~265 atshares ~~September~~of ~~30,~~its ~~2011~~common ~~was~~stock ~~determined~~in ~~using~~settlement ~~the~~of ~~Binomial~~$100,000 ~~Lattice~~of ~~Model~~the ~~with~~outstanding ~~the~~notes ~~following~~and ~~assumptions:~~related accrued interest

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.13	%

The fair value of the described embedded derivative of $336,418 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

F-20

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.06	%

At September 30, ~~2011~~2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating ~~gain~~loss of $6031,~~506~~086 for the year ended September 30, ~~2011~~2012.

~~The~~Note ~~fair~~issued ~~value~~on ofJuly ~~the described warrant liability of $318~~20,~~176~~ ~~at September 30,~~ 2011 ~~was determined using the Binomial Lattice Model with the following assumptions:~~

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.96	%

On July 20, 2011, the Company issued a Promissory Note for $76,725 in exchange for previously accrued legal services. The Note bears an interest rate of 5% per annum and matures on January 31, 2012. Upon maturity of the note, since the Company has not pay the holder the principal and interest due, the holder has the right to convert all principal and interest into the Company's common stock at $0.04 per share ($12 per share post reverse split of 1:300). This is convertible into approximately 1.9 million shares (approx. 6,333 shares post reverse split of 1:300) of the Company’s common stock.

AtThe ~~September~~Company ~~30,~~identified embedded derivatives related to the Convertible Promissory Note entered into in July 2011,. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company ~~adjusted~~record the ~~recorded~~ fair value of the ~~warrant~~derivatives ~~liability~~as of the inception date of the Convertible Promissory Note and to ~~market~~adjust ~~resulting~~the infair ~~non-cash,~~value ~~non-operating~~as of each subsequent balance sheet date. ~~loss~~At the inception of ~~$205,679~~the ~~for~~Convertible Promissory Note, the ~~year~~Company ~~ended~~determined ~~September~~a 30fair value of $31,264 ~~2011~~of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	411.17	%
Risk free rate:	0.2	%

F-17

NOTE 6 - NOTES PAYABLE (CONTINUED)

The initial fair value of the embedded debt derivative of $31,264 was allocated as a debt discount up to the proceeds of the note.

During the year ended September 30, 2012 and 2011, the Company amortized $19,720 and $11,544 to current period operations as interest expense, respectively.

During the year ended September 30, 2012, the Company paid $7,500 principal balance and issued a convertible note in settlement of the outstanding balance.

Notes issued during in August and September 2011:

During the months of August and September 2011, the Company issued an aggregate of $60,000 Convertible Promissory ~~Note~~Notes that matures one year from the date of issuance. These notes bear interest at a rate of 16% and will be convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of the lower of the lowest of a) conversion rate offered for any other future financial instrument or b) $0.02 per share ($6 per share post reverse split of 1:300).

The Company identified embedded derivatives related to the Convertible Promissory Notes entered into in August and September 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $72,338 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	410.08 to 430.39	%
Risk free rate:	0.99	%

In conjunction with the issuance of the Convertible Promissory Notes, the Company issued an aggregate of 3,000,000 detachable warrants (10,000 post reverse split of 1:300) exercisable five years from the date of issuance with an initial exercise price of $0.02 per share ($6 per share post reverse split of 1:300).

The Company identified embedded derivatives related to the warrants issued in August and September 2011. These embedded derivatives included certain reset provisions. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date to adjust the fair value as of each subsequent balance sheet date. At the date of issuance, the Company determined a fair value of $74,999 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:		-0-	%
Volatility	~~410.08 to 430,.39~~	410.08 to 430.39	%
Risk free rate:		0.99	%

The initial fair values of the embedded debt derivative of $72,338 and warrants of $74,999 was allocated as a debt discount up to the proceeds of the note ($60,000) with the remainder ($87,337) charged to ~~current period~~ operations as interest expense in September 30, 2011.

During the year ended September 30, 2012 and 2011, the Company amortized $53,589 and $6,411 to current period operations as interest expense, respectively.

~~The~~During ~~fair~~the ~~value~~year ofended ~~the~~September ~~described~~30, ~~embedded~~2012, the ~~derivative~~Company ofissued ~~$28,431~~an ataggregate ~~September~~of 3010,000 ~~2011~~shares ~~was~~of ~~determined~~its ~~using~~common ~~the~~stock ~~Binomial~~in ~~Lattice~~settlement ~~Model~~of ~~with~~ the ~~following~~outstanding ~~assumptions:~~notes payable.

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.13	%

Note issued October 7, 2011

AtOn ~~September~~October 307, 2011, the Company ~~adjusted~~issued a ~~the~~$53,000 ~~recorded~~Convertible ~~fair~~Promissory ~~value~~Note that matures on July 11, 2012. The note bears interest at a rate of 8% and is convertible into the ~~derivative~~Company’s ~~liability~~common tostock ~~market~~at ~~resulting~~any intime ~~non-cash~~at the holder’s option, ~~non-operating~~at ~~gain~~the conversion rate of ~~$43,907~~55% ~~for~~of the ~~year~~lowest ~~ended~~three trading ~~September~~days ~~30,~~10 ~~2011~~days prior to notice of conversion.

F-18

NOTE 6 - NOTES PAYABLE (CONTINUED)

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on October 7, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $91,801 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	425.63	%
Risk free rate:	0.11	%

The initial fair value of the embedded debt derivative of $91,801 was allocated as a debt discount up to the proceeds of the note ($53,000) with the remainder ($38,801) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $53,000 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 231,838 shares of its common stock in settlement of the note payable and accrued interest;

Note issued November 28, 2011

On November 28, 2011, the Company issued a $127,000 Convertible Promissory Note payable on demand. The note bears interest at a rate of 7% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 25% of the average bid price 5 days prior to notice of conversion with a floor of $2.10 per share.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on November 28, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $146,682 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	403.66	%
Risk free rate:	0.20	%

The initial fair value of the embedded debt derivative of $146,682 was allocated as a debt discount up to the proceeds of the note ($127,000) with the remainder ($19,682) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) a total of $127,000 to current period operations as interest expense, respectively.

During the year ended September 30, 2012, the Company issued an aggregate of 195,229 shares of common stock in settlement the convertible note and related interest.

Note issued November 29, 2011

On November 29, 2011, the Company issued a $19,005 Convertible Promissory Note that matures on November 28, 2012. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $0.66 per share.

Due to the nature of other existing convertible promissory notes, the Company could not insure sufficient shares available upon conversion demands, therefore the Company identified embedded derivatives related to the Convertible Promissory Note entered into on November 29, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $43,572 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice

F-19

NOTE 6 - NOTES PAYABLE (CONTINUED)

Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	398.61	%
Risk free rate:	0.14	%

The initial fair value of the embedded debt derivative of $43,572 was allocated as a debt discount up to the proceeds of the note ($19,005) with the remainder ($24,567) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $19,005 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 28,796 shares of common stock in full settlement of the convertible note and related interest.

Note issued December 6, 2011

On December 6, 2011, the Company issued a $37,500 Convertible Promissory Note that matures on September 8, 2012. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 51% of the lowest three trading days 10 days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on December 6, 2011. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $76,924 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	399.15	%
Risk free rate:	0.11	%

The initial fair value of the embedded debt derivative of $76,924 was allocated as a debt discount up to the proceeds of the note ($37,500) with the remainder ($39,424) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $37,500 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 2,553,686 shares of common stock in full settlement of the $25,150 of the convertible note.

The fair value of the described embedded derivative of $34,052 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.06	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $42,872 for the year ended September 30, 2012.

Note issued December 27, 2011

On December 27, 2011, the Company issued a $10,887 Convertible Promissory Note that matures on December 26, 2012. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $0.60 per share.

F-20

NOTE 6 - NOTES PAYABLE (CONTINUED)

The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $47,591 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	376.40	%
Risk free rate:	0.12	%

The initial fair value of the embedded debt derivative of $47,591 was allocated as a debt discount up to the proceeds of the note ($10,887) with the remainder ($36,704) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $10,887 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 18,145 shares of common stock in full settlement of the convertible note and related interest.

Note issued January 3, 2012

On January 3, 2012, the Company issued a $8,998 Convertible Promissory Note that matures on January 3, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $0.90 per share.

Due to the nature of other existing convertible promissory notes, the Company could not insure sufficient shares available upon conversion demands, therefore the Company identified embedded derivatives related to the Convertible Promissory Note entered into on January 3, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $20,206 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	379.14	%
Risk free rate:	0.12	%

The initial fair value of the embedded debt derivative of $20,206 was allocated as a debt discount up to the proceeds of the note ($8,998) with the remainder ($11,208) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $8,998 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 10,000 shares of common stock in full settlement of the convertible note and related interest.

Note issued January 17, 2012

On January 17, 2012, the Company issued a $11,212 Convertible Promissory Note that matures on January 17, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $0.90 per share.

Due to the nature of other existing convertible promissory notes, the Company could not insure sufficient shares available upon conversion demands, therefore the Company identified embedded derivatives related to the Convertible Promissory Note entered into on January 17, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $36,112 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	372.71	%
Risk free rate:	0.11	%

F-21

~~The~~NOTE 6 ~~fair~~- ~~value~~NOTES ofPAYABLE ~~the described warrant liability of $109,090 at September 30, 2011 was determined using the Binomial Lattice Model with the following assumptions:~~(CONTINUED)

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.96	%

The initial fair value of the embedded debt derivative of $36,112 was allocated as a debt discount up to the proceeds of the note ($11,212) with the remainder ($24,900) charged to current period operations as interest expense.

AtDuring the year ended September 30, ~~2011~~2012, the Company ~~adjusted~~amortized ~~the~~and ~~recorded~~wrote ~~fair~~off ~~value~~(upon ~~of the warrant liability to market resulting in non-cash, non-operating loss of~~ conversion) $3411,~~091~~212 ~~for~~to ~~the~~current ~~year~~period ~~ended~~operations ~~September~~as ~~30,~~interest ~~2011~~expense.

~~Note~~During the year ended September 30, 2012, the Company issued onan ~~July~~aggregate 20of 12,667 ~~2011~~shares of common stock in full settlement of the convertible note and related interest.

OnNote ~~July 20, 2011, the Company~~ issued aFebruary ~~Promissory Note for $76~~1,~~725~~ ~~in exchange for previously accrued legal services. The Note bears an interest rate of 5% per annum and matures on January 31,~~ 2012. Upon maturity of the note, since the Company has not pay the holder the principal and interest due, the holder has the right to convert all principal and interest into the Company's common stock at $0.04 per share. This is convertible into approximately 1.9 million shares of the Company’s common stock.

~~The~~On ~~Company~~February ~~identified~~1, ~~embedded~~2012, ~~derivatives~~the ~~related~~Company toissued a ~~the~~$47,500 Convertible Promissory Note ~~entered~~that ~~into~~matures inon ~~July~~November ~~2011~~2, 2012. ~~These~~ ~~embedded~~The ~~derivatives~~note ~~included~~bears ~~certain~~interest ~~conversion~~at ~~features. The~~a ~~accounting~~rate ~~treatment~~ of ~~derivative~~8% ~~financial~~and ~~instruments~~is ~~requires~~convertible into ~~that~~ the Company’s ~~record~~common ~~the~~stock ~~fair~~at ~~value~~any oftime at the ~~derivatives~~holder’s asoption, ofat the ~~inception~~conversion ~~date~~rate of ~~the~~51% ~~Convertible~~(subsequently ~~Promissory Note and~~ amended to ~~adjust~~36%) ~~the fair value as~~ of ~~each subsequent balance sheet date. At~~ the ~~inception~~lowest ofthree ~~the~~trading ~~Convertible~~days ~~Promissory~~10 ~~Note,~~days ~~the~~prior ~~Company~~to ~~determined~~notice ~~a fair value~~ of ~~$31,264 of the embedded derivative~~conversion. ~~The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:~~

Dividend yield:	-0-	%
Volatility	411.17	%
Risk free rate:	0.2	%

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 1, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $121,282 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

The initial fair value of the embedded debt derivative of $31,264 was allocated as a debt discount up to the proceeds of the note.

Dividend yield:	-0-	%
Volatility	350.13	%
Risk free rate:	0.13	%

~~During~~The initial fair value of the ~~year~~embedded debt ~~ended~~derivative ~~September~~of 30$121,282 ~~2011~~was allocated as a debt discount up to the proceeds of the note ($47,500) with the ~~Company~~remainder ~~amortized~~ ($1173,~~544~~782) charged to current period operations as interest expense.

~~The~~During ~~fair value of~~ the ~~described~~year ~~embedded~~ended ~~derivative of $11,940 at~~ September 30, ~~2011~~2012, the ~~was~~Company ~~determined~~amortized $31,816 ~~using~~to ~~the~~current ~~Binomial~~period ~~Lattice~~operations ~~Model~~as ~~with~~interest ~~the following assumptions:~~expense.

Dividend yield:	-0-	%
Volatility	434.88	%
Risk free rate:	0.06	%

The fair value of the described embedded derivative of $206,756 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

At September 30, 2011, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $19,324 for the year ended September 30, 2011.

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.06	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $90,049 for the year ended September 30, 2012.

In connection with the modification of the debt as described above, the Company recognized a loss of $40,908 for the year ended September 30, 2012.

Note issued February 2, 2012

On February 2, 2012, the Company issued a $20,000 Convertible Promissory Note that matures on February 1, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $0.90 per share.

Due to the nature of other existing convertible promissory notes, the Company could not insure sufficient shares available upon conversion demands, therefore the Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 2, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $50,783 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice

F-22

NOTE 6 - NOTES PAYABLE (CONTINUED)

Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	350.18	%
Risk free rate:	0.31	%

The initial fair value of the embedded debt derivative of $50,783 was allocated as a debt discount up to the proceeds of the note ($20,000) with the remainder ($30,783) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $20,000 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 22,333 shares of common stock in full settlement of the convertible note and related interest.

Note issued February 15, 2012

On February 15, 2012, the Company issued a $100,000 Convertible Promissory Note that matures on December 31, 2012 in exchange for 100 shares of Series C Preferred stock. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $2.25 per share.

Due to the nature of other existing convertible promissory notes, the Company could not insure sufficient shares available upon conversion demands, therefore the Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 15, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $52,677 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	325.00	%
Risk free rate:	0.18	%

The initial fair value of the embedded debt derivative of $52,677 was allocated as a debt discount up to the proceeds of the note.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $52,677 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 44,649 shares of common stock in full settlement of the convertible note and related interest.

Note issued February 15, 2012

On February 15, 2012, the Company issued a $50,000 Convertible Promissory Note that matures on February 15, 2013. The note bears interest at a rate of 10% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 65% of the lowest two trading days 10 days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 15, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $72,072 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

F-23

NOTE 6 - NOTES PAYABLE (CONTINUED)

Dividend yield:	-0-	%
Volatility	325.00	%
Risk free rate:	0.18	%

The initial fair value of the embedded debt derivative of $72,072 was allocated as a debt discount up to the proceeds of the note ($50,000) with the remainder ($22,072) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $31,233 to current period operations as interest expense.

The fair value of the described embedded derivative of $160,526 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $88,454 for the year ended September 30, 2012.

Note issued February 21, 2012

On February 21, 2012, the Company issued a $64,398 Convertible Promissory Note that matures on February 20, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 52% of the lowest trading day 10 days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 21, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $123,822 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	318.85	%
Risk free rate:	0.17	%

The initial fair value of the embedded debt derivative of $123,822 was allocated as a debt discount up to the proceeds of the note ($64,398) with the remainder ($59,424) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $64,398 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 113,667 shares of common stock in full settlement of the convertible note and related interest.

Note issued February 22, 2012

On February 22, 2012, the Company issued a $102,500 Convertible Promissory Note that matures on February 22, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 51% of the lowest three trading days 10 days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on February 22, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $204,223 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

F-24

NOTE 6 - NOTES PAYABLE (CONTINUED)

Dividend yield:	-0-	%
Volatility	318.85	%
Risk free rate:	0.17	%

The initial fair value of the embedded debt derivative of $204,223 was allocated as a debt discount up to the proceeds of the note ($102,500) with the remainder ($101,723) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized or wrote off (upon conversion) $84,527 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 3,400,000 shares of common stock in settlement of $9,884 of the convertible note.

The fair value of the described embedded derivative of $291,655 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $87,432 for the year ended September 30, 2012.

Note issued April 10, 2012

On April 10, 2012, the Company issued a $16,615 Convertible Promissory Note that matures on April 9, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the fixed conversion rate of $0.2931 per share.

Due to the nature of other existing convertible promissory notes, the Company could not insure sufficient shares available upon conversion demands, therefore the Company identified embedded derivatives related to the Convertible Promissory Note entered into on April 10, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $27,192 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	240.82	%
Risk free rate:	0.19	%

The initial fair value of the embedded debt derivative of $27,192 was allocated as a debt discount up to the proceeds of the note ($16,615) with the remainder ($10,577) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized and wrote off (upon conversion) $16,615 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 56,667 shares of common stock in full settlement of the convertible note and related interest.

Note issued April 25, 2012

On April 25, 2012, the Company issued a $45,000 Convertible Promissory Note that matures on January 30, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 51% of the lowest three trading days 10 days prior to notice of conversion.

F-25

NOTE 6 - NOTES PAYABLE (CONTINUED)

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on April 25, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $84,798 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	257.63	%
Risk free rate:	0.18	%

The initial fair value of the embedded debt derivative of $84,798 was allocated as a debt discount up to the proceeds of the note ($45,000) with the remainder ($39,798) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $25,393 to current period operations as interest expense.

The fair value of the described embedded derivative of $150,879 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $66,081 for the year ended September 30, 2012.

Note issued May 16, 2012

On May 16, 2012, the Company issued a $80,000 Convertible Promissory Note that matures on December 31, 2012. The note bears interest at a rate of 6% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 50% of the lowest bid price 5 trading days prior to notice of conversion. The note includes a redemption premium up to 120% of the face of the note for early payoff.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on May 16, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $174,938 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	258.13	%
Risk free rate:	0.20	%

The initial fair value of the embedded debt derivative of $174,938 was allocated as a debt discount up to the proceeds of the note ($80,000) with the remainder ($94,938) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $47,860 to current period operations as interest expense.

The fair value of the described embedded derivative of $443,576 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $252,828 for the year ended September 30, 2012.

F-26

NOTE 6 - NOTES PAYABLE (CONTINUED)

Note issued May 16, 2012

Dividend yield:	-0-	%
Volatility	258.13	%
Risk free rate:	0.20	%

During the year ended September 30, 2012, the Company amortized $47,860 to current period operations as interest expense.

The fair value of the described embedded derivative of $443,576 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $268,638 for the year ended September 30, 2012.

Note issued May 22, 2012

On May 22, 2012, the Company issued a $25,000 Convertible Promissory Note that is due on demand. The note bears interest at a rate of 5% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 50% of the average of the three lowest bid prices, 10 trading days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on May 22, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $24,478 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	271.22	%
Risk free rate:	0.08	%

The initial fair value of the embedded debt derivative of $24,478 was allocated as a debt discount of the note.

During the year ended September 30, 2012, the Company amortized $24,478 to current period operations as interest expense.

During the year ended September 30, 2012, the Company issued an aggregate of 431,351 shares of common stock in settlement of the outstanding note payable.

F-27

NOTE 6 - NOTES PAYABLE (CONTINUED)

Notes issued June 1, 2012

On June 1, 2012, the Company issued an aggregate of $95,229 of Convertible Promissory Notes that matures on December 31, 2012. The notes bear interest at a rate of 6% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 50% of the lowest bid price 5 trading days prior to notice of conversion. The note includes a redemption premium up to 120% of the face of the note for early payoff.

The Company identified embedded derivatives related to the Convertible Promissory Notes entered into on June 1, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Notes and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Notes, the Company determined a fair value of $222,153 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	272.05	%
Risk free rate:	0.12	%

The initial fair value of the embedded debt derivative of $222,153 was allocated as a debt discount up to the proceeds of the note ($95,229) with the remainder ($126,924) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $54,097 to current period operations as interest expense.

The fair value of the described embedded derivative of $526,349 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $304,196 for the year ended September 30, 2012.

Note issued July 30, 2012

On July 30, 2012, the Company issued a $50,000 Convertible Promissory Note that matures on March 31, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 50% of the average of the two lowest bid prices 5 trading days prior to notice of conversion. The note includes a redemption premium up to 120% of the face of the note for early payoff.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on July 30, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $187,051 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	363.95	%
Risk free rate:	0.15	%

The initial fair value of the embedded debt derivative of $187,051 was allocated as a debt discount up to the proceeds of the note ($50,000) with the remainder ($137,051) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $12,500 to current period operations as interest expense.

F-28

NOTE 6 - NOTES PAYABLE (CONTINUED)

The fair value of the described embedded derivative of $165,015 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.14	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $22,036 for the year ended September 30, 2012.

Note issued August 2, 2012

On August 2, 2012, the Company issued a $20,000 Convertible Promissory Note that matures on May 6, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 36% of the average three lowest trading prices 10 trading days prior to notice of conversion.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on August 2, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $78,599 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	366.04	%
Risk free rate:	0.14	%

The initial fair value of the embedded debt derivative of $78,599 was allocated as a debt discount up to the proceeds of the note ($20,000) with the remainder ($58,599) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $4,260 to current period operations as interest expense.

The fair value of the described embedded derivative of $100,557 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.14	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $21,958 for the year ended September 30, 2012.

Notes issued September 12, 2012

On September 12, 2012, the Company issued an aggregate of $45,000 Convertible Promissory Notes that matures on March 31, 2013. The note bears interest at a rate of 8% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 50% of the lowest bid price 10 trading days prior to notice of conversion for $10,000 and lower of $0.01 or 50% of the lowest bid price 15 trading days prior to notice of conversion for $35,000. The note includes a redemption premium up to 120% of the face of the note for early payoff.

The Company identified embedded derivatives related to the Convertible Promissory Notes entered into on September 12, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Notes and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Notes, the Company determined a fair value of $63,040 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	472.85	%
Risk free rate:	0.13	%

F-29

NOTE 6 - NOTES PAYABLE (CONTINUED)

The initial fair value of the embedded debt derivative of $63,040 was allocated as a debt discount up to the proceeds of the note ($45,000) with the remainder ($18,040) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $4,050 to current period operations as interest expense.

The fair value of the described embedded derivative of $260,837 at September 30, 2012 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.14	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $197,797 for the year ended September 30, 2012.

Note issued September 30, 2012

On September 30, 2012, the Company issued a $40,775 Convertible Promissory Note that matures on December 31, 2012 for services rendered. The note bears interest at a rate of 6% and is convertible into the Company’s common stock at any time at the holder’s option, at the conversion rate of 50% of the lowest bid price 5 trading days prior to notice of conversion. The note includes a redemption premium up to 120% of the face of the note for early payoff.

The Company identified embedded derivatives related to the Convertible Promissory Note entered into on September 30, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception (and at September 30, 2012) of the Convertible Promissory Note, the Company determined a fair value of $225,371 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.10	%

The initial fair value of the embedded debt derivative of $225,371 was allocated as a debt discount up to the proceeds of the note ($40,775) with the remainder ($184,596) charged to current period operations as interest expense.

During the year ended September 30, 2012, the Company amortized $nil to current period operations as interest expense.

F-30

MARKETING WORLDWIDE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2011~~2012 AND ~~2010~~2011

NOTE 87 - WARRANTY LIABILITY

The Company provides for estimated costs to fulfill customer warranty obligations upon recognition of the related revenue in accordance with Accounting Standards Codification subtopic 460-10, Guarantees (“ASC 460-10”) as a charge in the current period cost of goods sold. The range for the warranty coverage for the Company's products is up to 18 to 36 months. The Company estimates the anticipated future costs of repairs under such warranties based on historical experience and any known specific product information. These estimates are reevaluated periodically by management and based on current information, are adjusted accordingly. The Company's determination of the warranty obligation is based on estimates and as such, actual product failure rates may differ significantly from previous expectations. The warranty reconciliation as of September 30, ~~2011~~2012 and ~~20010~~2011 is as follows:

	2011			2010
	2012			2011
Warranty liability, beginning of year	$	9575,000		$	6695,~~216~~000
Expense for the year		2010,~~000~~781			~~110~~20,~~325~~000
Amount incurred		(4010,~~000~~781	)		(8140,~~542~~000	)
Warranty liability, end of year	$	75,000		$	9575,000

NOTE 98 – OTHER CURRENT LIABILITIES

Other current liabilities consist of the following at September 30, ~~2011~~2012 and ~~2010~~2011:

	2011		2010
	2012		2011
Preferred dividends payable	$	~~315~~386,~~000~~493	$	~~472~~315,~~500~~000
Consulting fees		69394,~~500~~779		~~112~~69,~~200~~500
Interest		~~225~~7,~~530~~364		~~163~~225,~~202~~530
Payroll and other		~~159~~309,~~428~~253		~~135~~159,~~494~~428
Total	$	~~769~~1,~~458~~097,889	$	~~883~~769,~~396~~458

NOTE 9 - WARRANT LIABILITY

The Company issued warrants in conjunction with the issuance with certain convertible promissory notes. These warrants contained certain reset provisions. Therefore, in accordance with ASC 815-40, the Company reclassified the fair value of the warrant from equity to a liability at the date of issuance. Subsequent to the initial issuance date, the Company is required to adjust to fair value the warrant as an adjustment to current period operations.

The Company estimated the fair value at date of issue of the warrants issued in connection with the issuance of the convertible promissory notes to be $187,496 using the Binomial Lattice formula assuming no dividends, a risk-free interest rate of 0.99% to 1.80%, expected volatility of 406.84% to 430.39%, and expected warrant life of five years. Since the warrants have reset provisions, pursuant to ASC 815-40, the Company has recorded the fair value of the warrants as a derivative liability. The net value of the warrants at the date of issuance was recorded as a warrant liability in the amount of $187,496. Until conversion and expiration of the warrants, changes in fair value were recorded as non-operating, non-cash income or expense at each reporting date.

The fair value of the warrant liability of $809,967 as of September 30, 2012 was determined using the Binomial Lattice formula assuming no dividends, a risk-free interest rate of 0.31%, expected volatility of 482.68%, and expected remaining warrant life of 3.75 to 3.99 years.

The Company adjusted the recorded fair values of the warrants to market from September 30, 2011 resulting in a non-cash, non-operating loss of $482,115 for the year ended September 30, 2012.

NOTE 10 - CAPITAL STOCK

On May 1, 2011, the Company, by agreement of a majority of shareholders, amended the Certificate of Incorporation to increase the authorized shares of common stock .The total number of shares of stock which the corporation shall have authority to issue is: Five Hundred Ten Million (510,000,000) of which Five Hundred Million (500,000,000) shares of the par value of $.001 each shall be common stock and of which Ten Million (10,000,000) shares of the par value of $.001 each shall be preferred stock. Further, the board of directors of this corporation, by resolution only and without further action or approval, may cause the corporation to issue one or more classes or one or more series of preferred stock within any class thereof and which classes or series may have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the board of directors, and to fix the number of shares constituting any classes or series and to increase or decrease the number of shares of any such class or series.

F-31

NOTE 10 - CAPITAL STOCK (CONTINUED)

On May 1, 2012, four persons holding majority voting power of the Company took action by written consent to increase the authorized capital stock of the Company to consist of Five Billion Nine Hundred Ten Million (5,910,000,000) shares of which stock Five Billion Nine Hundred Million (5,900,000,000) shares of the par value of $.00001 each shall be common stock and of which Ten Million (10,000,000) shares of the par value of $.001 each shall be preferred stock.

On July 9, 2012, the Company affected a three hundred-to-one (300 to 1) reverse stock split of its issued and outstanding shares of common stock, $0.00001 par value (whereby every three hundred shares of Company’s common stock will be exchanged for one share of the Company's common stock). All references in the consolidated financial statements and the notes to consolidated financial statements, number of shares, and share amounts have been retroactively restated to reflect the reverse split.

Series A Preferred stock

As of September 30, ~~2011~~2012 and ~~2010~~2011, the Company had nil and 3,500,000 shares issued and outstanding, respectively.

~~Payment~~On ofJanuary ~~Dividends:~~5, ~~Commencing~~2012, on the ~~date~~Company ofissued an ~~issuance~~aggregate of ~~the Series A Preferred Stock~~15,000 ~~the holders of record of~~ shares of ~~Series~~common Astock ~~Preferred~~in ~~Stock~~exchange ~~shall~~for ~~be entitled to receive~~1, ~~out of any assets at the time legally available therefore and as declared by the Board of Directors~~808,099 ~~dividends~~shares ~~at the rate~~ of ~~nine~~Series ~~percent~~A ~~(9%)~~Preferred ~~of the stated Liquidation Preference Amount (see below) per share per annum payable quarterly~~Stock.

On May 22, 2012, the Company entered a Securities Exchange Agreement with two investors. The Company exchanged the remaining outstanding shares of Series A Convertible Preferred Stock (1,691,901shares) and Series B Convertible Preferred Stock (1,192,308 shares) for 11,923 shares of the Company’s Series E 6% Convertible Preferred Stock.

In connection with the settlement of the remaining Series A Preferred stock, the Company recorded a loss on settlement of debt of $382,596. The fair value of the issued Series E Preferred stock of $2,095,401 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	271.65	%
Risk free rate:	0.21	%

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. On March 5, 2012 and April 18, 2012, the Company issued an aggregate of 83,333 shares of common stock in payment of $80,000 of accrued dividends.

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 imbedded beneficial conversion feature to additional paid-in capital and a charge as preferred stock dividend. The fair value of the imbedded beneficial conversion feature was determined using the Black-Scholes Option Pricing Model which approximates the fair value measured using the Binomial Lattice Model with the following assumptions: Dividend yield: $-0-; Volatility: 434.88%, risk free rate: 0.06%.

F-23

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.

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

F-32

NOTE 10 - CAPITAL STOCK (CONTINUED)

In June 2008, the FASB finalized ACS 815, “Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock.” Under ASC 815, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company has determined that it needs to account for these imbedded beneficial conversion features, issued to investors in 2007 for its Series A Convertible Preferred Stock, as derivative liabilities, and apply the provisions of ASC 815. The instruments have a ratchet provision (that adjusts the exercise price in the event of a subsequent offering of equity at a lower exercise price). As a result, the ratchet provision has been accounted for as derivative liabilities, in accordance with ASC 815. ASC 815, “Accounting for Derivative Instruments and Hedging Activities” (“ASC 815”) requires that the fair value of these liabilities be re-measured at the end of every reporting period with the change in fair value reported in the consolidated statement of operations.

~~The~~ASC ~~fair~~815 ~~value~~was implemented in the first quarter of Fiscal 2010 and is reported as the cumulative effect of a change in accounting principles. At October 1, 2009, the cumulative effect on the embedded conversion ~~features~~feature ~~were~~was ~~measured~~recorded ~~using~~as decrease in accumulated deficit of $1,971,115. During the ~~Black-Scholes~~year ~~option~~ended ~~pricing~~September ~~model~~30, 2012, asthe Company converted/settled all the Series A Preferred Stock. As of the date of ~~issuance~~the ~~and~~conversion as/settlement, derivative liability associated with the embedded conversion features of ~~September~~the 30Series A Preferred stock was revalued, ~~2010~~the ~~and~~gain atin the derivative liability of $141,740 for the year ended September 30, ~~2011,~~2012 ~~the~~is ~~fair~~included ~~value~~as ~~was measured~~a ~~using~~decrease ~~the~~of ~~Binomial~~a ~~Lattice~~loss ~~Model~~on ~~and~~change of fair value of derivative liabilities in the ~~following~~Company’s ~~assumptions:~~consolidated statement of operations

							Date of
	2011			2010			issuance
Imbedded Beneficial Conversion Feature:
Risk-free rate		0.06	%		0.42	%		4.55	%
Annual rate of dividends		0			0			0
Volatility		434.88	%		336.73	%		146.64	%
Weighted Average life (years)		0.57			1.56			5.0
Fair Value	$	141,740		$	1,186,670		$	1,971,115

The risk-free interest rate was based on rates established by the Federal Reserve. The Company based expected volatility on the historical volatility for its common stock. The expected life of the embedded beneficial conversion features was based on their full term. The expected dividend yield was based upon the fact that the Company has not historically paid dividends, and does not expect to pay dividends in the future.

ASC 815 was implemented in the first quarter of Fiscal 2010 and is reported as the cumulative effect of a change in accounting principles. At October 1, 2009, the cumulative effect on the embedded conversion feature was recorded as decrease in accumulated deficit of $1,971,115. As of September 30, 2011 the derivative liability associated with the embedded conversion features of the Series A Preferred stock was revalued, the decrease in the derivative liability of $1,044,930 for the year ended September 30, 2011 is included as an increase of a gain on change of fair value of derivative liabilities in the Company’s consolidated statement of operations.

Series B Preferred stock

As of September 30, ~~2011~~2012 and ~~2010~~2011, the Company ~~has~~had nil and 1,192,308 shares of Series B Convertible Preferred ~~Stock~~stock issued and outstanding, respectively.

As described above under Series A Preferred stock, On May 22, 2012, the Company exchanged all the outstanding Series B Preferred stock for Series E 6% Convertible Preferred Stock.

Series C Preferred stock

On May 4, 2011, the Company designated the issuance of a Series C preferred stock with the following attributes:

Par value:	$0.001 per share

Stated value:	$1,000 per share

Voting rights:	None

~~F-24~~On February 15, 2012, the Company issued a $100,000 convertible note payable in exchange for all the outstanding Series C Preferred stock.

As of September 30, 2012 and 2011, the Company has nil and 100 shares of Series C Preferred stock issued and outstanding, respectively.

Conversion rights: Each share of Series C Preferred stock is convertible at a conversion price of $045.1500 per share based on the initial stated value at issuance.

Liquidation rights: Upon any liquidation, dissolution or winding up of the Company, the holders shall be entitled to receive out of the assets an amount equal to the Stated Value, plus any accrued and unpaid dividends before payment is made to the holders of junior securities. Junior securities is defined as common stock or all other common stock equivalents of the Company other than those securities which are explicitly senior or pari passu to the preferred stock.

~~During the year ended September 30, 2011, the Company issued an aggregate of 100 shares of Series C preferred stock for $100,000.~~F-33

NOTE 10 - CAPITAL STOCK (CONTINUED)

Series D Super Voting Preferred stock

On April 11, 2012. the Company designated 1,000,000 authorized preferred shares as Series D Super Voting Preferred stock with the following attributes:

Par value:	$0.001 per share

Stated value:	$0.001 per share

Voting rights:	10,000 votes per share when voting on matters with the Company's common stockholders

Conversion rights: none.

Dividend rights: none

Liquidation rights: Upon any liquidation, dissolution or winding up of the Company, the holders shall be entitled to receive out of the assets an amount equal to the Stated Value.

On April 12, 2012, the Company issued 90,002 shares of Series D Super Voting Preferred stock to key officers, employees and consultants, valued at $40,501.

Series E 6% Convertible Preferred Stock

On May 24, 2012. the Company designated 15,000 authorized preferred shares as Series E Convertible Preferred Stock with the following attributes:.

Par value:	$0.001 per share

Stated value:	$100 per share

Voting rights:	None

Conversion rights: Each share of Series E 6% Convertible Preferred stock is convertible at any time at the election of the holder into that number of shares of the Company's common stock determined by dividing the Stated value of such shares of preferred stock into the conversion price. The conversion price is defined as fifty percent (50%) of the lowest closing bid price of the Company's common stock during five (5) trading days immediately preceding a conversion date.

Dividend rights: Holders share be entitled to receive cumulative dividends at a rate per share of 6% per annum, payable in arrears on June 30 and December 31 and on each conversion date in cash or at the Company's irrevocable option, shares of the Company's common stock. The number of shares issuable is defined as 50% of the previous ten (10) day variable weighted average price of the Company's common stock, with certain limitations

Dividends on the Series E 6% Convertible Preferred stock shall accrue daily commencing on the original issuance date and shall be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Company legally available for the payment of dividends.

On May 24, 2012, the Company issued an aggregate of 11,923 shares of Series E 6% Convertible Preferred stock in exchange for all of the outstanding Series A Preferred stock and Series B Preferred stock.

F-34

NOTE 10 - CAPITAL STOCK (CONTINUED)

The Company identified embedded derivatives related to the Series E 6% Convertible Preferred stock issued on May 24, 2012. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the issuance date of the Series E 6% Convertible Preferred stock and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value of $2,095,401 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice Model based on the following assumptions:

Dividend yield:	-0-	%
Volatility	271.65	%
Risk free rate:	0.21	%

The Company allocated the determined fair value of the Series E 6% Convertible Preferred stock based on the carrying value of the Series B preferred stock and the fair value of the Series A preferred stock (based on the underlying conversion feature) and accordingly recorded a loss on settlement of debt associated Series A preferred stock (debt) of $382,596 and a charge to equity of $19,774 associated with the Series B preferred stock.

During the year ended September 30, 2012, the Company issued an aggregate of 15,859,403 shares of its common stock in exchange for 810.5 shares of Series E 6% Convertible Preferred stock.

At September 30, 2012, the fair value of the described embedded derivative of $6,620,806 was determined using the Binomial Lattice Model with the following assumptions:

Dividend yield:	-0-	%
Volatility	482.68	%
Risk free rate:	0.17	%

At September 30, 2012, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $4,525,405 for the year ended September 30, 2012.

Common stock

On October 925, ~~2009~~2010, the Company issued ~~500~~2,000,000 shares (6,667 shares post reverse stock split of 1:300) of common stock in ~~settlement~~exchange offor ~~outstanding~~services ~~accounts~~valued ~~payable~~at of $3040,000. These shares were valued at $0.02 per share ($6 per share post reverse stock split of 1:300), which was the trading price on October 25, 2010.

On ~~October~~January 911, ~~2009~~2011, the Company issued an aggregate of 80554,~~000~~108 shares (1,847 shares post reverse stock split of 1:300) of common stock in exchange for services valued at $1225,~~000~~914. ~~These~~ The shares were valued at the $0.1504 per share ~~which~~($12 ~~represents~~per ~~the~~share ~~fair~~post ~~value~~reverse ofstock ~~services~~split ~~received~~of 1:300), which ~~did~~was ~~not differ materially from~~ the ~~value~~trading price as of ~~the~~January ~~stock~~11, ~~issued~~2011.

On ~~February~~January 1711, ~~2010~~2011, the Company issued an5,137,500 ~~aggregate~~shares (17,125 shares post reverse stock split of 1~~,520,000~~:300) ~~shares~~ of common stock in exchange for ~~services~~accumulated ~~valued~~Series atA preferred stock dividend of $~~304~~472,~~000~~500. ~~These~~ The shares were valued at ~~$0.20 per share which represents~~ the ~~fair~~underlying ~~value~~terms of ~~services received which did not differ materially from~~ the ~~value~~Series ofA ~~the~~preferred stock ~~issued~~. ~~Of the 1,520,000 shares, 600,000 shares are expected to be returned to the Company because the agreement for the services that were contemplated when the shares were issued has been cancelled.~~

On ~~March~~January 1017, ~~2010~~2011, the Company issued an375,000 ~~aggregate~~shares of (1,~~075,000~~ 250 shares post reverse stock split of 1:300) of common stock in exchange for services valued at $~~118~~7,~~250~~500. These shares were valued at $0.1102 per share ~~which~~($6 ~~represents~~per ~~the~~share ~~fair~~post ~~value~~reverse ofstock ~~services~~split ~~received~~of 1:300), which ~~did~~was ~~not differ materially from~~ the ~~value~~trading ofprice ~~the~~on ~~stock~~January ~~issued.~~17, 2011

On ~~August~~February 131, ~~2010~~2011, the Company issued an800,000 ~~aggregate~~shares of(2,667 shares ~~5.5~~post ~~million~~reverse ~~shares~~stock split of 1:300) of common stock in exchange for ~~services~~accrued ~~and~~compensation ~~retirement of debt~~ valued at $~~110~~16,000. These shares were valued at $0.02 per share ($6 per share post reverse stock split of 1:300), which was the trading price on ~~August 13~~February 1, ~~2010~~2011.

On ~~August~~February 1612, ~~2010~~2011, the Company issued 34,150,000 ~~million~~shares (13,833 shares ofpost ~~common~~reverse stock insplit ~~partial~~of ~~settlement~~1:300) of ancommon ~~intercompany~~stock ~~debt~~in ~~with~~exchange ~~JCMD,~~for ~~the~~previously ~~Variable~~incurred ~~Interest~~debt ~~Entity~~of $49,566. ~~This~~These shares ~~transaction~~were ~~was~~ valued at $0.02 per share, ~~the~~($6 ~~value~~per atshare ~~which~~post ~~the~~reverse stock split of 1:300), which was the trading price on ~~this date~~February 12, ~~and~~2011. The ~~resulted~~Company inrecorded a $6033,~~000~~434 ~~reduction~~loss inon settlement of debt at the ~~payable~~date toof ~~JCMD~~issuance.

On ~~October~~February 2522, ~~2010~~2011, the Company issued 2600,000 shares (2,000 shares post reverse stock split of 1:300) of common stock in exchange for services valued at $409,~~000~~600. These shares were valued at $0.02 per share ($6 per share post reverse stock split of 1:300), which was the trading price on ~~October~~February 2522, ~~2010.~~2011

On ~~January~~February 1123, 2011, the Company issued an375,000 ~~aggregate~~shares ~~of 554~~(1,~~108~~ 250 shares post reverse stock split of 1:300) of common stock in exchange for services valued at $257,~~914~~500. ~~The~~These shares were valued at ~~the~~$0.019 per share ($5.047 per share post reverse stock split of 1:300), which was the trading price ason ofFebruary ~~January 11~~23, 2011.

On January 11, 2011, the Company issued 5,137,500 shares of common stock in exchange for accumulated Series A preferred stock dividend of $472,500. The shares were valued at the underlying terms of the Series A preferred stock.F-35

OnNOTE 10 ~~January~~- ~~17,~~CAPITAL ~~2011,~~STOCK ~~the Company issued 375,000 shares of common stock in exchange for services valued at $7,500. These shares were valued at $0.02 per share, which was the trading price on January 17, 2011~~(CONTINUED)

On ~~February~~March 124, 2011, the Company issued ~~800~~2,~~000~~540,787 shares (8,469 shares post reverse stock split of 1:300) of common stock in exchange for ~~accrued~~previously ~~compensation~~incurred ~~valued~~debt atof $1625,~~000~~840. These shares were valued at $0.02 per share ($6 per share post reverse stock split of 1:300), which was the trading price on ~~February~~March 124, 2011. The Company recorded a $24,976 loss on settlement of debt at the date of issuance.

On ~~February~~April 1227, 2011, the Company issued 4an aggregate of 3,~~150~~621,~~000~~362 shares (12,071 shares post reverse stock split of 1:300) of common stock in exchange for ~~previously~~services ~~incurred~~valued ~~debt~~at of $49108,~~566~~641. These shares were valued at $0.0203 per share, ~~which~~($9 ~~was~~per ~~the~~share ~~trading~~post ~~price~~reverse onstock ~~February~~split 12of 1:300), ~~2011. The~~which ~~Company~~was ~~recorded~~the atrading ~~$33,434~~price ~~loss~~ on ~~settlement~~April ~~of debt at the date of issuance~~27, 2011.

On ~~February~~May 2217, 2011, the Company issued ~~600~~2,~~000~~902,657 shares (9,676 shares post reverse stock split of 1:300) of common stock in exchange for services valued at $958,~~600~~053. These shares were valued at $0.02 per share ($6 per share post reverse stock split of 1:300), which was the trading price on ~~February~~May 2217, 2011

On ~~February~~May 2325, 2011, the Company issued ~~375~~378,~~000~~143 shares (1,260 shares post reverse stock split of 1:300) of common stock in exchange for ~~services~~a ~~valued~~convertible atnote and related accrued interest of $726,~~500~~470. These shares were valued at $0.~~019~~07 per share ($21 per share post reverse stock split of 1:300), which was the ~~trading~~effective ~~price~~conversion onrate of ~~February~~the ~~23,~~underlying ~~2011~~note.

~~F-25~~On August 1, 2011, the Company issued 100,000 shares (333 shares post reverse stock split of 1:300) of common stock in exchange for services valued at $1,000. These shares were valued at $0.01 per share ($3 per share post reverse stock split of 1:300), which is the trading price on August 1, 2011.

On ~~March~~August 2422, 2011, the Company issued 2,~~540~~646,~~787~~666 shares (8,822 shares post reverse stock split of 1:300) of common stock in exchange for ~~previously~~a ~~incurred~~convertible ~~debt~~note and related accrued interest of $2533,~~840~~692. These shares were valued at $0.02013 per share, ~~which~~($3.9 ~~was~~per ~~the~~share ~~trading~~post ~~price~~reverse onstock ~~March~~split 24of 1:300), ~~2011. The~~which ~~Company~~was ~~recorded~~the atrading ~~$24,976~~price ~~loss~~ on ~~settlement~~August 22, ~~of debt at the date of issuance~~2011.

On ~~April~~August 2726, 2011, the Company issued an833,333 ~~aggregate~~shares ~~of 3~~(2,~~621,362~~ 778 shares post reverse stock split of 1:300) of common stock in exchange for ~~services~~a ~~valued~~convertible atnote and related accrued interest of $~~108~~8,~~641~~000. These shares were valued at $0.03017 per share ($5.1 per share post reverse stock split of 1:300), which was the trading price on ~~April 27~~August 26, 2011.

On ~~May~~September 177, 2011, the Company issued 21,~~902~~964,~~657~~286 shares (6,548 shares post reverse stock split of 1:300) of common stock in exchange for ~~services~~a ~~valued~~convertible atnote and related accrued interest of $5811,~~053~~000. These shares were valued at $0.020108 per share ($3.24 per share post reverse stock split of 1:300), which was the trading price on ~~May 17~~September 7, 2011.

On ~~May~~September 2512, 2011, the Company issued ~~378~~2,~~143~~500,000 shares (8,333 shares post reverse stock split of 1:300) of common stock in exchange for a convertible note and related accrued interest of $2614,~~470~~000. These shares were valued at $0.070122 per share, ~~which~~($3.66 ~~was~~per ~~the~~share ~~effective~~post ~~conversion~~reverse ~~rate~~stock split of 1:300), which was the ~~underlying~~trading ~~note~~price on September 12, 2011.

On ~~August~~September 114, 2011, the Company issued ~~100~~2,000,000 shares (6,667 shares post reverse stock split of 1:300) of common stock in exchange for ~~services~~a ~~valued~~convertible atnote and related accrued interest of $111,~~000~~200. These shares were valued at $0.01011 per share ($3.3 per share post reverse stock split of 1:300), which iswas the trading price on ~~August 1~~September 14, 2011.

On ~~August~~September 2215, 2011, the Company issued 21,~~646~~428,~~666~~571 shares (4,762 shares post reverse stock split of 1:300) of common stock in exchange for a convertible note and related accrued interest of $338,~~692~~000. These shares were valued at $0.~~013~~01136 per share ($3.41 per share post reverse stock split of 1:300), which was the trading price on ~~August 22~~September 15, 2011.

On ~~August~~September 2615, 2011, the Company issued ~~833~~1,~~333~~821,429 shares of(6,071 shares ~~common~~post reverse stock insplit ~~exchange~~of ~~for~~1:300) aof ~~convertible~~common ~~note~~stock ~~and~~in ~~related~~exchange ~~accrued~~for ~~interest~~services ofvalued at $825,~~000~~500. These shares were valued at $0.~~017~~014 per share ($4.2 per share post reverse stock split of 1:300), which ~~was~~is the trading price on ~~August~~September 2615, 2011.

On September 719, 2011, the Company issued 12,~~964~~627,~~286~~537 shares (8,758 shares post reverse stock split of 1:300) of common stock in exchange for a convertible note and related accrued interest of $1119,~~000~~496. These shares were valued at $0.~~0108~~0106 per share ($3.18 per share post reverse stock split of 1:300), which was the trading price on September 7 19, 2011.

On September 1221, 2011, the Company issued 2,~~500~~628,~~000~~349 shares (8,761 shares post reverse stock split of 1:300) of common stock in exchange for a convertible note and related accrued interest of $1422,~~000~~709. These shares were valued at $0.~~0122~~01234 per share ($3.7 per share post reverse stock split of 1:300), which was the trading price on September 12 21, 2011.

On ~~September~~October 143, 2011, the Company issued 2 6,~~000,000~~494 shares of common stock in exchange for a convertible note and related accrued interest of $1115,~~200~~000. These shares were valued at $04.~~011~~20 per share, which was the trading price on ~~September~~October 143, 2011.

On ~~September~~October 155, 2011, the Company issued 1 5,~~428,571~~556 shares of common stock in exchange for a convertible note and related accrued interest of $810,000. These shares were valued at $03.~~01136~~60 per share, which was the trading price on ~~September~~October 155, 2011.

On September 15, 2011, the Company issued 1,821,429 shares of common stock in exchange for services valued at $25,500. These shares were valued at $0.014 per share, which is the trading price on September 15, 2011.F-36

OnNOTE 10 ~~September~~- ~~19,~~CAPITAL ~~2011,~~STOCK the Company issued 2,627,537 shares of common stock in exchange for a convertible note and related accrued interest of $19,496. These shares were valued at $0.0106 per share, which was the trading price on September 19, 2011.(CONTINUED)

On ~~September~~October 217, 2011, the Company issued 2 11,~~628,349~~087 shares of common stock in exchange for a convertible note and related accrued interest of $2228,~~709~~000. These shares were valued at $03.~~01234~~61 per share, which was the trading price on ~~September~~October 217, 2011.

On October 26, 2011, the Company issued 12,064 shares of common stock in exchange for a convertible note and related accrued interest of $26,160. These shares were valued at $3.10 per share, which was the trading price on October 26, 2011.

On October 27, 2011, the Company issued 2,075 shares of common stock in exchange for a convertible note and related accrued interest of $4,500. These shares were valued at $3.10 per share, which was the trading price on October 27, 2011.

On November 8, 2011, the Company issued 6,667 shares of common stock in exchange for services valued at $10,000. These shares were valued at $1.50 per share, which was the trading price on November 8, 2011

On November 11, 2011, the Company issued 10,000 shares of common stock in exchange for a convertible notes and related accrued interest of $30,000. These shares were valued at $3.10 per share, which was the trading price on November 11, 2011.

On November 18, 2011, the Company received 2,000 shares of common stock previously issued for services valued at $120,000. These returned shares were canceled and returned to authorized and were valued at $60.00 per share, which was the trading price at initial issuance on February 17, 2010.

On November 21, 2011, the Company issued an aggregate of 18,931 shares of common stock in exchange for convertible notes and related accrued interest of $19,800. These shares were valued at $2.10 per share, which was the trading price on November 21, 2011.

On November 22, 2011, the Company issued 8,642 shares of common stock in exchange for a convertible note and related accrued interest of $7,000. These shares were valued at $1.50 per share, which was the trading price on November 22, 2011.

On November 28, 2011, the Company issued 8,000 shares of common stock in exchange for a convertible note and related accrued interest of $6,000. These shares were valued at $1.53 per share, which was the trading price on November 28, 2011.

On November 29, 2011, the Company issued an aggregate of 33,462 shares of common stock in exchange for convertible notes and related accrued interest of $22,505. These shares were valued at $1.50 per share, which was the trading price on November 29, 2011.

On November 30, 2011, the Company issued an aggregate of 14,227 shares of common stock in exchange for convertible notes and related accrued interest of $11,500. These shares were valued at $1.74 per share, which was the trading price on November 29, 2011.

On December 6, 2011, the Company issued an aggregate of 2,464 shares of common stock in exchange for convertible notes and related accrued interest of $500. These shares were valued at $1.20 per share, which was the trading price on December 6, 2011.

On December 15, 2011, the Company issued 6,667 shares of common stock in exchange for services valued at $20,000. These shares were valued at $3.00 per share, which was the trading price on December 15, 2011

On December 19, 2011, the Company issued an aggregate of 8,791 shares of common stock in exchange for convertible notes and related accrued interest of $6,000. These shares were valued at $1.02 per share, which was the trading price on December 19, 2011.

On December 19, 2011, the Company issued an aggregate of 8,791 shares of common stock in exchange for convertible notes and related accrued interest of $6,000. These shares were valued at $1.56 per share, which was the trading price on December 19, 2011.

On December 27, 2011, the Company issued 18,145 shares of common stock in exchange for a convertible note and related accrued interest of $10,887. These shares were valued at $2.70 per share, which was the trading price on December 27, 2011.

On January 3, 2012, the Company issued 12,554 shares of common stock in exchange for a convertible note and related accrued interest of $14,500. These shares were valued at $2.10 per share, which was the trading price on January 3, 2012.

On January 5, 2012, the Company issued an aggregate of 15,000 shares of common stock in exchange for 1,808,099 shares of Series A Preferred stock.

On January 12, 2012, the Company issued 17,460 shares of common stock in exchange for a convertible note and related accrued interest of $22,000. These shares were valued at $3.00 per share, which was the trading price on January 12, 2012.

On January 12, 2012, the Company issued 10,000 shares of common stock in exchange for a convertible note and related accrued interest of $8,998. These shares were valued at $3.00 per share, which was the trading price on January 12, 2012.

F-37

NOTE 10 - CAPITAL STOCK (CONTINUED)

On January 24, 2012, the Company issued 12,667 shares of common stock in exchange for a convertible note and related accrued interest of $11,212. These shares were valued at $2.25 per share, which was the trading price on January 24, 2012.

On January 24, 2012, the Company issued 44,309 shares of common stock in exchange for a convertible note and related accrued interest of $58,760. These shares were valued at $2.25 per share, which was the trading price on January 24, 2012.

On February 2, 2012, the Company issued 22,333 shares of common stock in exchange for a convertible note and related accrued interest of $20,000. These shares were valued at $2.10 per share, which was the trading price on February 2, 2012.

On February 10, 2012, the Company issued 49,069 shares of common stock in exchange for a convertible note and related accrued interest of $58,000. These shares were valued at $1.80 per share, which was the trading price on February 10, 2012.

On February 16, 2012, the Company issued 25,000 shares of common stock in exchange for a convertible note and related accrued interest of $19,744. These shares were valued at $1.50 per share, which was the trading price on February 16, 2012.

On February 21, 2012, the Company issued 30,000 shares of common stock in exchange for a convertible note and related accrued interest of $18,000. These shares were valued at $1.50 per share, which was the trading price on February 21, 2012.

On February 23, 2012, the Company issued 88,265 shares of common stock in exchange for a convertible note and related accrued interest of $107,990. These shares were valued at $1.20 per share, which was the trading price on February 23, 2012.

On February 27, 2012, the Company issued 26,423 shares of common stock in exchange for a convertible note and related accrued interest of $23,781. These shares were valued at $1.23 per share, which was the trading price on February 27, 2012.

On February 28, 2012, the Company issued 17,027 shares of common stock in exchange for a true up of a convertible note and related accrued interest. These shares were valued at $1.20 per share, which was the trading price on February 28, 2012.

On February 29, 2012, the Company issued 27,333 shares of common stock in exchange for a convertible note and related accrued interest of $19,988. These shares were valued at $1.20 per share, which was the trading price on February 29, 2012.

On March 5, 2012, the Company issued 32,110 shares of common stock in exchange for a convertible note and related accrued interest of $72,249. These shares were valued at $1.41 per share, which was the trading price on March 5, 2012.

On March 5, 2012, the Company issued 33,333 shares of common stock as payment on Series A Preferred stock dividend of $50,000. These shares were valued at $1.50 per share, which was the trading price on March 5, 2012.

On March 7, 2012, the Company issued 35,667 shares of common stock in exchange for a convertible note and related accrued interest of $21,398. These shares were valued at $1.50 per share, which was the trading price on March 7, 2012.

On March 15, 2012, the Company issued 26,667 shares of common stock in exchange for a convertible note and related accrued interest of $12,740. These shares were valued at $0.78 per share, which was the trading price on March 15, 2012.

On March 15, 2012, the Company issued 12,539 shares of common stock in exchange for a convertible note and related accrued interest of $28,214. These shares were valued at $0.78 per share, which was the trading price on March 15, 2012.

On March 19, 2012, the Company issued 48,000 shares of common stock in exchange for a convertible note and related accrued interest of $25,000. These shares were valued at $1.02 per share, which was the trading price on March 19, 2012.

On March 19, 2012, the Company issued 44,397 shares of common stock in exchange for a convertible note and related accrued interest of $21,000. These shares were valued at $1.02 per share, which was the trading price on March 19, 2012.

On March 19, 2012, the Company issued 11,121 shares of common stock in exchange for a convertible note and related accrued interest of $5,260. These shares were valued at $1.02 per share, which was the trading price on March 19, 2012.

On March 27, 2012, the Company issued 23,333 shares of common stock in exchange for a convertible note and related accrued interest of $8,645. These shares were valued at $0.90 per share, which was the trading price on March 27, 2012.

On March 27, 2012, the Company issued 56,834 shares of common stock in exchange for a convertible note and related accrued interest of $20,000. These shares were valued at $0.90 per share, which was the trading price on March 27, 2012.

F-38

NOTE 10 - CAPITAL STOCK (CONTINUED)

On April 16, 2012, the Company issued 26,799 shares of common stock in exchange for a convertible note and related accrued interest of $8,884. These shares were valued at $0.60 per share, which was the trading price on April 16, 2012.

On April 18, 2012, the Company issued 54,545 shares of common stock in exchange for a convertible note and related accrued interest of $18,000. These shares were valued at $1.35 per share, which was the trading price on April 18, 2012.

On April 18, 2012, the Company issued 50,000 shares of common stock as payment on Series A Preferred stock dividend of $30,000. These shares were valued at $0.60 per share, which was the trading price on April 18, 2012.

On April 18, 2012, the Company issued 56,667 shares of common stock in exchange for a convertible note and related accrued interest of $16,615. These shares were valued at $1.05 per share, which was the trading price on April 18, 2012.

On April 23, 2012, the Company issued 28,070 shares of common stock in exchange for a convertible note and related accrued interest of $8,000. These shares were valued at $0.52 per share, which was the trading price on April 23, 2012.

On April 25, 2012, the Company issued 28,736 shares of common stock in exchange for a convertible note and related accrued interest of $7,500. These shares were valued at $0.47 per share, which was the trading price on April 25, 2012.

On April 26, 2012, the Company issued 28,736 shares of common stock in exchange for a convertible note and related accrued interest of $7,500. These shares were valued at $0.47 per share, which was the trading price on April 26, 2012.

On April 27, 2012, the Company issued 27,027 shares of common stock in exchange for a convertible note and related accrued interest of $6,000. These shares were valued at $0.40 per share, which was the trading price on April 27, 2012.

On April 27, 2012, the Company issued 27,397 shares of common stock in exchange for a convertible note and related accrued interest of $6,000. These shares were valued at $0.40 per share, which was the trading price on April 27, 2012.

On May 1, 2012, the Company issued 27,397 shares of common stock in exchange for a convertible note and related accrued interest of $6,000. These shares were valued at $0.40 per share, which was the trading price on May 1, 2012.

On May 2, 2012, the Company issued 27,397 shares of common stock in exchange for a convertible note and related accrued interest of $6,000. These shares were valued at $0.40 per share, which was the trading price on May 2, 2012.

On May 3, 2012, the Company issued 25,114 shares of common stock in exchange for a convertible note and related accrued interest of $5,500. These shares were valued at $0.40 per share, which was the trading price on May 3, 2012.

On May 4, 2012, the Company issued 11,963 shares of common stock in exchange for a convertible note and related accrued interest of $500. These shares were valued at $0.40 per share, which was the trading price on May 4, 2012.

On May 8, 2012, the Company issued 26,667 shares of common stock in exchange for a convertible note and related accrued interest of $6,600. These shares were valued at $0.45 per share, which was the trading price on May 8, 2012.

On May 17, 2012, the Company issued 26,794 shares of common stock in exchange for a convertible note and related accrued interest of $8,400. These shares were valued at $0.81 per share, which was the trading price on May 17, 2012.

On May 25, 2012, the Company issued 27,273 shares of common stock in exchange for a convertible note and related accrued interest of $12,000. These shares were valued at $0.81 per share, which was the trading price on May 25, 2012.

On May 30, 2012, the Company issued 77,519 shares of common stock in exchange for a convertible note and related accrued interest of $12,000. These shares were valued at $0.45 per share, which was the trading price on May 30, 2012.

On May 30, 2012, the Company issued 146,970 shares of common stock in exchange for 242.50 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.39 per share, which was the trading price on May 30, 2012.

On June 5, 2012, the Company issued 131,313 shares of common stock in exchange for a convertible note and related accrued interest of $26,000. These shares were valued at $0.36 per share, which was the trading price on June 5, 2012.

On June 14, 2012, the Company issued 72,917 shares of common stock in exchange for a convertible note and related accrued interest of $7,000. These shares were valued at $0.15 per share, which was the trading price on June 14, 2012.

F-39

NOTE 10 - CAPITAL STOCK (CONTINUED)

On June 15, 2012, the Company issued 100,000 shares of common stock in exchange for 90.0 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.21 per share, which was the trading price on June 15, 2012.

On June 18, 2012, the Company issued 88,889 shares of common stock in exchange for a convertible note and related accrued interest of $8,000. These shares were valued at $0.21 per share, which was the trading price on June 18, 2012.

On June 18, 2012, the Company issued 76,923 shares of common stock in exchange for a convertible note and related accrued interest of $6,000. These shares were valued at $0.15 per share, which was the trading price on June 18, 2012.

On June 26, 2012, the Company issued 114,943 shares of common stock in exchange for a convertible note and related accrued interest of $4,000. These shares were valued at $0.12 per share, which was the trading price on June 26, 2012.

On June 26, 2012, the Company issued 90,000 shares of common stock in exchange for 27.0 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.12 per share, which was the trading price on June 26, 2012.

On July 1, 2012, the Company issued 279,167 shares of common stock in exchange for 83.75 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.09 - $0.12 per share, which was the trading price on July 1, 2012.

On July 2, 2012, the Company issued 77,778 shares of common stock in exchange for a convertible note and related accrued interest of $2,800. These shares were valued at $0.09 per share, which was the trading price on July 2, 2012.

On July 9, 2012, the Company issued 76,667 shares of common stock in exchange for a convertible note and related accrued interest of 2,300. These shares were valued at $0.09 per share, which was the trading price on July 9, 2012.

On July 18, 2012, the Company issued 141,026 shares of common stock in exchange for a convertible note and related accrued interest of $550. These shares were valued at $0.011 per share, which was the trading price on July 18, 2012.

On July 23, 2012, the Company issued 129,167 shares of common stock for reset provisions relating to the conversion of the Series E 6% Convertible Preferred Stock. These shares were valued at $0.03 per share, which was the trading price on July 23, 2012.

On July 23, 2012, the Company issued 113,334 shares of common stock in exchange for 17 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.01 per share, which was the trading price on July 23, 2012

On July 25, 2012, the Company issued 157,273 shares of common stock in exchange for 8.65 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.0399 per share, which was the trading price on July 25, 2012

On July 26, 2012, the Company issued 142,857 shares of common stock in exchange for a convertible note and related accrued interest of $800. These shares were valued at $0.011 per share, which was the trading price on July 26, 2012.

On August 1, 2012, the Company issued 150,000 shares of common stock in exchange for a convertible note and related accrued interest of $1,000. These shares were valued at $0.015 per share, which was the trading price on August 1, 2012.

On August 3, 2012, the Company issued 120,000 shares of common stock in exchange for 9 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.0131 per share, which was the trading price on August 3, 2012.

On August 7, 2012, the Company issued 319,000 shares of common stock in exchange for 15.95 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.015 per share, which was the trading price on August 7, 2012.

On August 20, 2012, the Company issued 640,000 shares of common stock in exchange for 12.15 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.074 per share, which was the trading price on August 20, 2012.

On August 21, 2012, the Company issued 206,897 shares of common stock in exchange for a convertible note and related accrued interest of $600. These shares were valued at $0.02 per share, which was the trading price on August 21, 2012.

On August 27, 2012, the Company issued 411,765 shares of common stock in exchange for 10.5 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.0063 per share, which was the trading price on August 27, 2012.

On September 4, 2012, the Company issued 3,606,897 shares of common stock in exchange for a convertible notes and related accrued interest of $10,484. These shares were valued at $0.015 per share, which was the trading price on September 4, 2012.

On September 7, 2012, the Company issued 28,770,000 shares of common stock in exchange for services rendered. These shares were valued at $0.006 per share, which was the trading price on September 7, 2012.

F-40

NOTE 10 - CAPITAL STOCK (CONTINUED)

On September 11, 2012, the Company issued 10,152,727 shares of common stock in exchange for 294.0 shares of Series E 6% Convertible Preferred stock. These shares were valued at $0.0055 per share, which was the trading price on September 11, 2012.

On September 13, 2012, the Company issued 10,000 shares of common stock in exchange for services rendered. These shares were valued at $0.006 per share, which was the trading price on September 13, 2012.

On September 18, 2012, the Company issued 1,551,724 shares of common stock in exchange for a convertible notes and related accrued interest of $4,500. These shares were valued at $0.0063 per share, which was the trading price on September 18, 2012.

On September 21, 2012, the Company issued 3,200,000 shares of common stock for reset provisions relating to the conversion of the Series E 6% Convertible Preferred Stock. These shares were valued at $0.0018 per share, which was the trading price on September 21, 2012.

As of September 30, 2012 and 2011, the Company has 52,796,407 and 238,316 shares of common stock issued and outstanding, respectively.

NOTE 11 - STOCK OPTIONS AND WARRANTS

Employee Stock Options

The following table summarizes the options outstanding and the related prices for the shares of the Company's common stock issued to employees of the Company as of September 30, ~~2011~~2012:

					~~Options Outstanding~~	Options Outstanding		~~Options Exercisable~~	Options Exercisable
Exercise Price	~~Exercise Price~~	~~Number Outstanding~~	Number Outstanding		~~Weighted Average Remaining Contractual Life (Years)~~	Weighted Average Remaining Contractual Life (Years)		~~Weighted Average Exercise Price~~	Weighted Average Exercise Price		~~Number Exercisable~~	Number Exercisable
$	05.~~017~~10		~~2,200,000~~	7,333		~~9.65~~	8.65	$	~~0.017~~$	5.10		~~550,000~~	5,500
$	090.3000		~~490,000~~	1,633		~~5.90~~	4.90	$	~~0.30~~$	90.00		~~490,000~~	1,633
$	020.0757		~~2,690,000~~	8,966		~~8.65~~	7.97	$	~~0.15~~$	24.54		~~1,040,000~~	7,133

~~F-26~~The fair value of all employee options vesting charged to operations in the year ended September 30, 2012 and 2011 was $22,000 and $11,648, respectively.

During the year ended September 30, 2011, the Company granted an aggregate of employee 2,200,000 stock options with an exercise price of $0.017 expiring ten years from the date of issuance and vesting at a rate of 25% every six months. The fair values were determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: 0%; Volatility: 418.05%; and Risk free rate: 3.07%.

The fair value of all employee options vesting charged to operations in the years ended September 30, 2011 and 2010 were $11,648 and $7,796, respectively.

Transactions involving options issued to employees are summarized as follows:

	Weighted Average			Weighted Average Exercise
	Number of Options			Price per Share
Outstanding, September 30, 2009		660,000		$	0.30
Outstanding, September 30, 2010		1,967		$	90.00
Granted		7,333			5.10
Exercised		-			-
Canceled or expired		(334	)		(90.00	)
Outstanding, September 30, 2010		8,966			20.55
Granted		-			-
Exercised		-			-
Canceled or expired		~~(70,000~~-	)		~~(0.30~~-	)
Outstanding, September 30, 2010		590,000			0.30
Outstanding, September 30, 2011		8,966		$	20.57
Granted		2,200,000			0.017
Exercised		-			-
Canceled or expired		(100,000	)		(0.30	)
Outstanding, September 30, 2011		2,690,000		$	0.07

~~Non employee options~~F-41

AsNOTE 11 of- ~~September~~STOCK ~~30,~~OPTIONS ~~2011,~~AND ~~all~~WARRANTS ~~non employee options expired.~~(CONTINUED)

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

	Weighted Average Number of Options			Weighted Average Exercise Price per Share
Outstanding, September 30, 2009		1,000,000		$	0.10
Granted/Exercised		-			-
Canceled or expired		-			-
Outstanding, September 30, 2010		1,000,000			0.10
Granted / Exercised		-			-
Canceled or expired		(1,000,000	)		(0.10	)
Outstanding, September 30, 2011		-		$	-

Warrants

The following table summarizes the warrants outstanding as of September 30, ~~2011~~2012:

~~Warrants Outstanding~~

Warrants Outstanding

~~Warrants Exercisable~~

Warrants Exercisable

~~Weighted Average Remaining~~

Weighted Average Remaining

~~Weighted Average~~

Weighted Average

~~Weighted~~

Weighted

~~Number~~

Number

~~Contractual~~

Contractual

~~Exercise~~

Exercise

~~Number~~

Number

~~Average~~

Average

Exercise Price

~~Exercise Price~~

~~Outstanding~~

Outstanding

~~Life (Years)~~

Life (Years)

~~Price~~

Price

~~Exercisable~~

Exercisable

~~Exercise Price~~

Exercise Price

06.0200

~~3,000,000~~

10,000

~~4.93~~

3.93

~~0.02~~$

6.00

~~3,000,000~~

10,000

~~0.02~~$

6.00

012.0400

~~4,375,000~~

6,250

~~4.79~~

3.78

~~0.04~~$

12.00

~~4,375,000~~

6,250

~~0.04~~$

12.00

08.0331

~~7,375,000~~

16,250

~~4.84~~

3.88

~~0.03~~$

8.31

~~7,375,000~~

16,250

~~0.03~~$

8.31

F-27

Transactions involving warrants are summarized as follows:

	Weighted Average Number of Shares			Price per Share
Outstanding, September 30, 2009		100,000		$	0.30
Outstanding, September 30, 2010		333		$	90.00
Granted		-			-
Issued		41,250			6.90
Exercised		(16,667	)		3.00
Canceled or expired		(333	)		(90.00	)
Outstanding, September 30, 2011		24,583			9.00
Issued		-			-
Exercised		-			-
Canceled or expired		-(8,333	)		-(12.00	)
Outstanding, September 30, 2010		100,000			0.30
Outstanding, September 30, 2012		16,250		$	8.31
Granted		12,375,000			.023
Exercised		(5,000,000	)		.01
Canceled or expired		(100,000	)		(0.30	)
Outstanding, September 30, 2011		7,375,000		$	0.03

During the year ended September 30, 2011, the Company issued 516,~~000,000~~667 warrants in connection for services rendered exercisable to July 31, 2011 at $0.01 per share. The Company issued an aggregate of 415,~~724,019~~747 shares in connection with the cashless exercise of the warrant.

In connection with the issuance of promissory notes, the Company issued an aggregate of 716,~~375,000~~250 warrants (net of cancelations of 8,333) exercisable five years from the date of issuance at $06.0200 to $012.0400 per share with certain reset provisions. As The ~~described in Note 7 above, the~~ fair value of the warrants were determined at the date of issuance and adjusted to fair value to current period operations at September 30, ~~2011~~2012 with the offset to warrant liability using the binomial lattice model.

NOTE 12 - CONSOLIDATION OF VARIABLE INTEREST ENTITIES

On June 6, 2005 and August 8, 2005, JCMD Properties LLC, an entity controlled by the Company's former 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 was 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, the Company determined that JCMD was a variable interest entity ("VIE") and the Company was the primary beneficiary under ASC 810-10 since JCMD did 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 adopted ASC 810-10 and consolidated JCMD as a VIE, regardless of the Company not having an equity interest in JCMD. Since JCMD is owned by two of the former principals of MWW, MWW has guaranteed the indebtedness of JCMD for the real estate occupied by MWW, and the two principals of JCMD do not have the ability to repay the loan, the Company, in accordance with ASC 810-10 has consolidated the activities of JCMD into the presented financial statements.

~~Included in the Company's consolidated balance sheets at September 30, 2011and 2010 are the following net assets of JCMD:~~F-42

	2011			2010
ASSETS (JCMD)
Cash and cash equivalents	$	-		$	755
Accounts receivable, prepaid expenses and other current assets		193,433			150,400
Total current assets		193,433			151,155
Property, plant and equipment, net		-			800,000
Total assets	$	193,433		$	951,155
LIABILITIES:
Current portion of long term debt	$	489,755		$	1,208,152
Accounts payable and accrued liabilities		190,498			233,251
Total current liabilities		680,253			1,441,403
Total deficit		(486,820	)		(490,248	)
Total liabilities and deficit	$	193,433		$	951,155

NOTE 12 - CONSOLIDATION OF VARIABLE INTEREST ENTITIES (CONTINUED)

~~F-28~~Included in the Company's consolidated balance sheets at September 30, 2012 and 2011 are the following net assets of JCMD:

	2012			2011
ASSETS (JCMD)
Accounts receivable, prepaid expenses and other current assets	$	193,433		$	193,433
Total current assets		193,433			193,433
Total assets		193,433			193,433

LIABILITIES:
Current portion of long term debt	$	489,755		$	489,755
Accounts payable and accrued liabilities		232,127			190,498
Total current liabilities		712,882			680,253
Total deficit		(528,499	)		(486,820	)
Total liabilities and deficit	$	193,433		$	193,433

Consolidated results of operations include the following:

	2011			2010
	2012			2011
Revenues	$	~~34,000~~-		$	~~204~~34,000
Cost and expenses - real estate: Operating expenses		-			83,991
Interest, net		41,629			30,572
Depreciation		-			32,001
Total costs and expenses		41,629			30,572
Impairment loss on sale of property, plant and equipment		-			409,823
Total costs an expenses
Interest, net		30,572			130,183
Operating income (loss) -Real estate	$	(41,629	)	$	3,428
Total costs and expenses		30,572			655,998
Operating income (loss) -Real estate	$	3,428		$	(451,998	)

The Variable Interest Entity owned by JCMD and included in these consolidated financial statements sold the only asset it owned, which was real estate that was under a lease with the Company, for $800,000 on November 30, 2010. This sale resulted in a net loss of approximately $400,000 and left a remaining liability to the Small Business Administration of approximately $500,000 which is guaranteed by the Company. This loss of $409,823 was recorded as an impairment loss in the September 30, 2010 consolidated financial statements.

NOTE 13- 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 consolidated financial statements consisted of the following items as of September 30, 2011:~~F-43

			Fair Value Measurements at September 30, 2011 using:
	September 30, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Debt Derivative liabilities	$	1,258,634		-		-	$	1,258,634
Warrant liabilities	$	427,266		-		-	$	427,266

NOTE 13- FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of September 30, 2012:

			Fair Value Measurements at September 30, 2012 using:
	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Debt Derivative liabilities	$	10,649,266		-		-	$	10,649,266
Warrant liabilities	$	809,967		-		-	$	809,967

The debt derivative and warrant liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical prices for the Company’s common stock and are classified within Level 3 of the valuation hierarchy.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of September 30, ~~2011~~2012:

F-29

	Debt Derivative Liability			Warrant Liability
Balance, October 1, 2010	$	1,186,670		$	-
Initial fair value of debt derivatives at note issuances		1,484,806			-
Initial fair value of warrant liability		-			187,496
Mark-to market at September 30, 2011:
-Embedded debt derivatives		(367,912			-
-Reset provisions relating to Series A preferred stock		(1,044,930	)		-
-Reset provisions related to warrants		-			239,770
Balance, September 30, 2011		1,258,634			427,266
Transfers to (from) liabilities due to conversions		(1,089,216	)		(99,414	)
Transfers to liabilities due to debt modifications		40,908			-
Initial fair value of debt derivatives at note and preferred stock issuances		4,445,706			-
Mark-to-market at September 30, 2012
-Embedded debt derivatives		1,609,569			-
-Reset provisions relating to Series A preferred stock		(141,740	)		-
-Reset provisions relating to Series E preferred stock		4,525,405			-
-Reset provisions relating to warrants		-			482,115
Balance, September 30, 2012	$	10,649,266		$	809,967

Net gain (loss) for the period included in earnings relating to the liabilities held at September 30, 2012	$	(5,993,234	)	$	(482,115	)

	Debt Derivative Liability			Warrant Liability
Balance, October 1, 2009	$	1,971,115		$	-
Mark-to market at September 30, 2010:
-Reset provisions relating to Series A preferred stock		(784,445	)		-
Balance, October 1, 2010		1,186,670			-
Total (gains) losses
Initial fair value of debt derivatives at note issuances		1,484,806
Initial fair value of warrant liability		-			187,496
Mark-to-market at September 30, 2011:
- Embedded debt derivatives		(367,912	)		-
- Reset provisions relating to Series A preferred stock		(1,044,930	)		-
-Reset provisions relating to warrants		-			239,770
Balance, September 30, 2011	$	1,258,634		$	427,266
Net gain (loss) for the period included in earnings relating to the liabilities held at September 30, 2011	$	1,412,842		$	(239,770	)

Level 3 Liabilities are comprised of our bifurcated convertible debt features on our convertible notes and reset provisions contained within our Series A stock and certain warrants.

NOTE 14– DISCONTINUED OPERATIONS

On February 25, 2010, the Company discontinued operations of 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 statements of operations as discontinued operations for all periods presented. The assets and liabilities of this business are reflected as assets and liabilities from discontinued operations in the consolidated balance sheets for all periods presented. The Company does not expect to incur any ongoing costs associated with this discontinued operations.

~~The assets and liabilities of the discontinued operations as of September 30, 2011 and 2010 were as follows:~~F-44

NOTE 14– DISCONTINUED OPERATIONS (CONTINUED)

The assets and liabilities of the discontinued operations as of September 30, 2012 and 2011 were as follows:

Assets:

	2011		2010
	2012		2011
Cash	$	-	$	-
Accounts receivable		-		-
Inventories		-		-
Prepaid expenses and other assets		-		-
Total current assets	$	-	$	-
Other assets of discontinued operations		-		-
Assets of discontinued operations	$	-	$	-
Liabilities:
Accounts payable		~~492,006~~-		492,006
Line of credit		-		-
Liabilities of discontinued operations	$	~~492,006~~-	$	492,006

F-During the year ended September 30, 2012, the Company determined it no longer was obligated to the outstanding debt of the foreign subsidiary through German Court proceedings, therefore recognized a gain of $492,006 in liquidation of international subsidiary.

The Results of Operations for the years ended September 30, 2011 and 2010 are as follows:

	2011		2010
Sales	$	-	$	316,110
Cost of sales		-		266,556
Gross profit		-		49,554
Operating Costs:
Selling, general and administrative		-		153,543
Depreciation and amortization		-		11,639
Total operating costs		-		165,182
Net loss from operations		-		(115,628	)
Other income (expense), net		-		(289,390	)
Net loss	$	-	$	(405,018	)

NOTE 15 - PROVISION FOR INCOME TAXES

The Company files income tax returns for Marketing Worldwide Corporation and its domestic subsidiaries (MWW Automotive, LLC and Colortek, Inc.) with the Internal Revenue Service and with various state jurisdictions, most notable Michigan. As of September 30, ~~2011~~2012, the tax returns for tax years 2008 – current remain open to examination by the Internal Revenue Service and various state authorities.

Components of deferred tax assets as of September 30, 2011 and 2010	2011			2010
Components of deferred tax assets as of September 30, 2012 and 2011	2012			2011
Net operating loss carryforward	$	34,~~698~~431,000		$	23,~~944~~698,~~637~~000
Inventory reserve, expense for books, not on tax return		~~107~~56,000			~~104~~107,000
Warranty reserve, expense for books, not on tax return		3830,000			38,000
Book-tax difference in Fixed Asset Depreciation		585,~~000~~500			58,000
Sub total		34,~~901~~522,~~000~~500			3,~~144~~901,~~637~~000
Valuation allowance		(34,~~901~~522,~~000~~500	)		(3,~~144~~901,~~637~~000	)
Net tax benefit	$	0		$	0

As of September 30, ~~2011~~2012, the Company had approximately $911,~~245~~080,000 of federal and state net operating losses (“NOL”) available for income tax purposes that may be carried forward to offset future taxable income, if any. The federal carryforwards expire beginning in 2025.

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	As of September 30,
	2011			2010
	2012			2011
Tax benefit at federal statutory rate		(34.0	)%		(34.0	)%
State statutory rate		(6.0	)%		(6.0	)%
Change in valuation allowance		42.0	%		4942.80	%
Valuation of imbedded derivative		-	%		~~(16.2~~-	)%
Impairment on sale of building		-	%		~~8.4~~-	%
Other permanent items		(2.0	)%		(2.0	)%
Effective income tax rate		0	%		0	%

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes.

F-45

NOTE 15 - PROVISION FOR INCOME TAXES (CONTINUED)

A full valuation allowance is being maintained resulting in a net deferred tax asset of zero until sufficient positive evidence exists to support the reversal of any portion or all of the valuation allowance net of appropriate reserves. Should the Company become profitable in future periods with supportable trends; the valuation allowance will be reduced accordingly.

F-31

NOTE 16- ECONOMIC DEPENDENCY

During the years ended September 30, 2011 and 2010, revenues were derived from the following customers:

	Revenue						Accounts Receivable
	2011			2010			2011			2010
	2012			2011			2012			2011
Customer A		3676.64	%		3536.36	%		6912.2488	%		3569.0524	%
Customer B		3212.78	%		2432.07	%		1316.0307	%		2613.7103	%
Customer C		205.41	%		20.4	%		83.4915	%		218.6149	%
Customer D		52.5	%		195.85	%		511.7507	%		135.8575	%
Total		9596.28	%		9995.52	%		9643.5117	%		9796.2351	%

During the years ended September 30, ~~2011~~2012 and ~~2010~~2011, purchases were made from the following suppliers:

	Purchases						Accounts Payable
	2011			2010			2011			2010
	2012			2011			2012			2011
Supplier 1		2151.7519	%		1321.1175	%		14.2402	%		01.2624	%
Supplier 2		15.9981	%		1215.6399	%		50.3717	%		25.5037	%
Supplier 3		1314.2741	%		1213.0927	%		0.3242	%		0.0032	%
Supplier 4		10.2840	%		1210.0828	%		0.1844	%		30.0018	%
Supplier 5		1094.267	%		10.7426	%		0.4943	%		20.8549	%
Total		7190.546	%		6071.6454	%		75.6048	%		87.6160	%

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Related party lease obligations and transactions

On March 5, 2004, MWW and MWWLLC entered into five year real property lease, beginning on January 1, 2005, with a related party (JCMD Properties LLC: See Note 7) for use of warehouse and general offices located in the city of Howell, Michigan. The lease was terminated at the time the real estate was sold to an unrelated party on November 30, 2010. The buyer of the property was known to the sellers, and the buyer’s Chief Financial Officer is the former wife of one of the partners of JCMD.

The Company entered into a three (3) year lease with the buyer on December 1, 2010 of the property described above. The general terms of the lease calls for monthly payments beginning December 1, 2010 of $6,666.67 for the first year($80,000 annually); $7,083.34 per month for the second year($85,000 annually); $7,416.67 per month($89,000 annually) for the third, or final, year of the lease, or an aggregate of $254,000. The Company is responsible for all property taxes, maintenance and utilities associated with the property.

Employment and Consulting Agreements

The Company has employment agreements with all of its employees. In addition to salary and benefit provisions, the agreements include non-disclosure and confidentiality provisions for the protection of the Company’s proprietary information.

The Company has consulting agreements with outside contractors to provide marketing and financial advisory services. The Agreements are generally for a term of 12 months from inception and renewable automatically from year to year unless either the Company or Consultant terminates such engagement by written notice.

Litigation

The Company is subject to certain legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

~~On October 19, 2010, the Company was served a Complaint from one of its suppliers that a loan in the amount of $217,000 was due and payable.~~ The ~~Company~~company currently has ~~recorded $195,000 in their accounts as of September 30, 2010 and expects to continue negotiations to settle this outside~~ the ~~legal system.~~ following:

~~F-32~~James Marvin/Michigan Department of Wage and Hour

~~MARKETING~~Marvin, ~~WORLDWIDE~~a ~~CORPORATION~~former director and shareholder of MWW brought a wage and hour claim against MWW alleging failure to pay wages and benefits. On March 2, 2011, an ALJ found in favor of Marvin in the amount of $81,730. An appeal by MWW was dismissed.

~~NOTES~~On TOSeptember ~~CONSOLIDATED~~24, ~~FINANCIAL~~2012, ~~STATEMENTS~~the State of Michigan brought an action against MWW to collect the amount due to Marvin. MWW has filed a third party complaint against Marvin alleging breach of employment agreement, breach of fiduciary duty and tortious interference with business relations.

~~SEPTEMBER 30, 2011 AND 2010~~F-46

NOTE 1817 -– ~~SUBSEQUENT~~COMMITMENTS ~~EVENTS~~AND CONTINGENCIES (CONTINUED)

~~There~~MWW ~~were~~and ~~67,023,178 shares issued~~the State of Michigan have entered into a consent judgment for ~~note~~the ~~conversions~~wage and ~~6,000,000 shares~~hour ~~issued~~amount. ~~for~~The ~~services~~State ~~rendered~~has agreed to hold the judgment in abeyance until the completion of the third party complaint and 1any amounts found due to MWW from Marvin will be deducted from the consent judgment. The matter against Marvin will be vigorously contested,~~479,633~~ ~~shares~~as ~~issued~~Marvin abused his position with MWW and financially devastated the company. MWW counsel feels MWW will either be awarded or settle for ~~interest~~an ~~conversion~~amount ~~after~~equal ~~September~~to ~~30,~~or ~~2011~~greater than the amount due to Marvin.

~~The~~MWW’s ~~Company~~subsidiary isColortek owns property and a building in ~~negotiation~~Baroda, ~~with~~Michigan. ~~note~~Edgewater ~~holder~~Bank ~~for~~holds ~~extensionof~~the ~~maturity~~mortgage. ~~dates~~Colortek ~~relating~~fell tobehind ~~notes~~on ~~maturing~~payments. ~~after~~Edgewater foreclosed on the property by Sheriff’s sale on October 25, 2012. Edgewater purchased the property at the Sheriff’s sale. The purchase price left a deficiency of $167,000, which was accrued as of September 30, ~~2011~~2012. asThe ~~per~~mortgage ~~Note~~was 7secured not only by the property, but by a UCC security interest filing on Colortek equipment and a personal guaranty from MWW. Edgewater initiated a lawsuit against MWW and Colortek for the deficiency. The original owners of Colortek had also signed a personal guaranty for the mortgage. Their guaranty was not discharged when MWW became a guarantor. MWW brought a third party complaint against them on the guaranty.

~~F-33~~Edgewater and MWW principals and their attorneys have a settlement meeting scheduled for January 14, 2013 to pursue a settlement on both the deficiency and redeeming the property prior to the redemption period running. Because Edgewater agreed to the settlement meeting and did not simply file a Motion for Summary Disposition to get a judgment, the Company believes settlement is probable. Both parties would suffer greatly otherwise as Edgewater would have property and equipment it cannot use or sell and Colortek, and thus MWW would be out of business, making the deficiency uncollectable as well. A well thought out settlement will get Edgewater paid and keep Colortek and MWW solvent .

MWW's subsidiary, Colortek, owed money for services and product to Merlyn Engineering. Merlyn initiated a lawsuit to collect $12,000. Settlement was entered into in October, 2012. Payment is due and was to be paid before 12-31-2012.

MWW's subsidiary Colortek filed with the Michigan Tax Tribunal to have the 2011 property tax assessment lowered by Baroda Township. The matter was lost in both the Tribunal and at MWW. After working with the Township and Tribunal, on December 4, 2012 the Tribunal agreed to enter a Stipulated Order reducing the property assessment for 2011 and 2012 by approximately $150,000 for each year.

In March, 2012, Colortek received a letter from the attorney for Reliable Analysis demanding payment of an overdue account in the amount of $21,711. The attorney was instructed direct all future correspondence to MWW's legal counsel. No further request has been received.

WLC brought a lawsuit against MWW to collect past due amounts for services. A consent judgment with installment payment terms. The amount should be paid off in January 2014.

NOTE 18 – SUBSEQUENT EVENTS

There were 200,264,188 common shares issued for note conversions and 163,096,802 common shares for Series E conversions and for services rendered 54,509,616 common shares after September 30, 2012.

The Company issued $179,500 of Notes Payable.

The Company is in default with note holder due as of November 22, 2012. Default interest rate of 22% now applies.

F-47

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

~~RBSM~~There ~~LLP~~are ~~(“RBSM”)~~no ~~was~~changes ~~engaged~~and/or on November 28, 2011 as the Company’s independent registered public accounting firm. The decision to engage RBSM as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors. Prior to engaging RBSM, the Company did not consult disagreements with RBSM regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinions that might be rendered by RBSM on the Company’s financial statementsLLP, ~~and RBSM did not provide any written or oral advice that was an important factor considered by~~ the ~~Company in reaching a decision as to any such accounting, auditing or financial reporting issue. Previously, RBSM served as the Company~~company’s current independent registered ~~public~~ accounting firm ~~for the fiscal years ended September 30, 2009 and 2008~~.

The Company notified Marcum LLP, (“Marcum”) of the dismissal on November 29, 2011. Except as noted below, the report of Marcum on the Company’s consolidated financial statements for the year ended September 30, 2010 did not contain an adverse opinion or disclaimer of opinion, and such report was not qualified or modified as to uncertainty, audit scope or accounting principle.

The report of the Marcum on the Company’s consolidated financial statements as of and for the year ended September 30, 2010, contained an explanatory paragraph which noted that there was substantial doubt as to the Company’s ability to continue as a going concern as the Company had generated negative cash outflows from operating activities, experienced recurring net operating losses, and is dependent on securing additional equity and debt financing to support its business efforts. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

During the year ended September 30, 2010 and the subsequent period through November 29, 2011, the Company has not had any disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the Marcum’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s consolidated financial statements for such years. Except for certain material weaknesses in internal controls identified by the Company as described in Item 4 of its Forms 10-Q for the fiscal quarters ended December 31, 2010, March 31, 2011 and June 30, 2011 and in Item 9A of its Annual Report on Form 10-K for the fiscal year ended September 30, 2010, there were no reportable events as that term is described in Item 304(a)(1)(v) of Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES.

Not applicable

ITEM 9A (T)

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURE

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, ~~2011~~2012. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision of our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, ~~2011~~2012 using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

~~Page~~A 16material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2012, we determined that control deficiencies existed that constituted material weaknesses, as described below:

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2011, we determined that control deficiencies existed that constituted material weaknesses, as described below:

lack of documented policies and procedures;

we have no audit committee;

There is a risk of management override given that our officers have a high degree of involvement in our day to day operations.

there is no policy on fraud and no code of ethics at this time, though we plan to implement such policies in fiscal 2012; and

There is no effective separation of duties, which includes monitoring controls, between the members of management.

Management is currently evaluating what steps can be taken in order to address these material weaknesses.

Accordingly, we concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company's internal controls.

As a result of the material weaknesses described above, Chief Executive Officer and Chief Financial Officer has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, ~~2011~~2012 based on criteria established in Internal Control—Integrated Framework issued by COSO.

~~CHANGES~~Page ~~IN INTERNAL CONTROLS~~15

~~During~~CHANGES ~~the~~IN ~~fiscal~~INTERNAL ~~year~~CONTROLS ~~ended~~OVER September 30, 2011, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.FINANCIAL REPORTING

During the fiscal year ended September 30, 2012, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Michael Winzkowski, age 6061 is the sole director of MWW. At present, MWW's directors serve without compensation for acting as directors and do not receive any special compensation for committee participation or special assignments.

MWW does not have a majority of independent directors, have a separately designated audit committee nor a person designated as an audit committee member financial expert. MWW does not have a majority of independent board members, separately designated audit committee or an audit committee member financial expert because the cost of identifying, interviewing, appointing, educating, and compensating such persons would outweigh the benefits to its stockholders at the present time. If MWW is successful in its efforts to secure additional capital, the resources may be available to appoint additional directors.

In August 1997, Mr. Winzkowski (age 6061) became Director of the Inalfa Industries Global Aftermarket Operations, CEO of North America and a member of the Board of Directors. In September 2000, Mr. Winzkowski left his position with Inalfa to serve as the President of Marketing Worldwide. Mr. Winzkowski has served as Chief Executive Officer, President, Secretary and Director of MWW Corporation since October 2003. Mr. Winzkowski holds a degree in chemical Bio-Engineering and in addition studied Business, Marketing and Accounting Administration. He is an accomplished commercial pilot with close to 10,000 Hrs. of flight experience, holding European and US Commercial, Air Transport Pilot and Instrument pilot certificates and a variety of Turboprop and Business Jet type ratings along with his single and multi-engine ratings. Mr. Winzkowski is a member and manager of JCMD Properties LLC. MWW moved into a new facility in Howell, Michigan as its principal business location, which was built to suit MWW's requirements by JCMD Properties LLC under a long term lease agreement. (See Certain Relationships and Related Transactions). JCMD LLC was formed in the state of Michigan on December 31, 2003 as a property development and management company.

He is an accomplished commercial pilot with close to 10,000 Hrs. of flight experience, holding European and US Commercial, Air Transport Pilot and Instrument pilot certificates and a variety of Turboprop and Business Jet type ratings along with his single and multi-engine ratings. Mr. Winzkowski is a member and manager of JCMD Properties LLC. MWW moved into a new facility in Howell, Michigan as its principal business location, which was built to suit MWW's requirements by JCMD Properties LLC under a long term lease agreement. (See Certain Relationships and Related Transactions). JCMD LLC was formed in the state of Michigan on December 31, 2003 as a property development and management company.

Page 17

DIRECTORS, EXECUTIVE OFFICERS

Mr. Winzkowski ~~and~~has ~~Mr.~~been ~~Marvin~~employed ~~have~~by ~~been~~ the company ~~members~~since its inception and ~~managers~~is currently Chairman of ~~JCMD~~the ~~Properties~~Board, ~~LLC~~President ~~since~~and ~~its~~sole ~~formation~~board member of the company.

InOn ~~August~~July ~~1997~~20, ~~Mr.~~2010, ~~Marvin~~Marketing ~~(age~~Worldwide Corporation ~~56)~~appointed ~~became~~Charles ~~the~~Pinkerton ~~COO~~as ~~and a member of~~ the ~~Board~~Company’s ofChief ~~Directors~~Executive ~~of the North American Aftermarket entity of Inalfa Industries~~Officer. ~~In November 2000,~~ Mr. ~~Marvin~~Pinkerton ~~became~~is ~~the~~59 ~~Managing~~years ~~Director of Operations~~ old and ~~co-owner~~has ofover ~~Marketing~~35 ~~Worldwide.~~years’ ~~Since~~experience ~~October~~working ~~2003,~~with ~~James~~Fortune C.500 ~~Marvin~~Corporations ~~has~~within ~~served~~the asautomotive, ~~Chief Operating Officer~~petroleum, ~~Chief~~retail ~~Financial Officer~~ and ~~Director~~construction arenas. ofWithin ~~MWW~~these ~~Corporation.~~companies, Mr. ~~Marvin~~Pinkerton ~~attended~~has ~~Lake~~held ~~Superior~~the ~~and~~positions ~~Cleary~~as ~~Universities~~Vice ~~majoring~~President inSales ~~Business~~& ~~and~~Marketing, ~~obtained~~Director ~~degrees~~of in Business Development ~~Accounting~~ and ~~Business~~Director ~~Administration.~~of ~~Mr.~~Operations ~~Marvin is a member~~ and ~~manager~~has ofestablished ~~JCMD~~relationships ~~Properties~~with ~~LLC.~~companies ~~MWW~~such ~~moved~~as ~~into a new facility in Howell~~BP, ~~Michigan as its principal business location~~Amoco, ~~which~~Citgo ~~was~~and ~~built~~others. From 1998 to ~~suit~~2001, ~~MWW's~~in ~~requirements~~his byposition ~~JCMD~~as ~~Properties~~Executive ~~LLC~~Vice ~~under~~President aof ~~long~~Kux ~~term~~Manufacturing, ~~lease agreement~~Inc., ~~(See~~a ~~Certain~~supplier ~~Relationships~~of ~~and~~automotive ~~Related~~products ~~Transactions)~~for ~~JCMD~~the US ~~LLC~~market, ~~was~~he ~~formed~~has inestablished ~~the~~longstanding ~~state~~relationships ofwith ~~Michigan~~companies onsuch ~~December~~as 31Honda, ~~2003~~Nissan, asGM, aToyota, ~~property~~Ford ~~development~~ and ~~management~~Mazda ~~company~~among others. ~~Mr.~~From ~~Winzkowski~~2001 ~~and~~until ~~Mr.~~joining ~~Marvin~~MWW, ~~have~~he ~~been~~served ~~the~~as ~~members~~President and ~~managers~~CEO of ~~JCMD~~Kux ~~LLC~~Architectural ~~since~~Products ~~its~~and ~~formation.~~as ~~During~~Director ~~fiscal~~of ~~year~~Business for ~~ending~~Engineered ~~September~~Tax ~~30, 2010,~~ Services. Mr. ~~Marvin~~Pinkerton ~~resigned~~is ~~from~~also ~~MWW~~currently ~~and~~holding nothe ~~longer~~position ~~holds~~of ~~any~~Chief ~~management~~Financial ~~roles within the Company~~Officer.

On July 20, 2010, Marketing Worldwide Corporation appointed Charles Pinkerton as the Company’s Chief Executive Officer. Mr. Pinkerton is 58 years old and has over 35 years’ experience working with Fortune 500 Corporations within the automotive, petroleum, retail and construction arenas. Within these companies, Mr. Pinkerton has held the positions as Vice President Sales & Marketing, Director of Business Development and Director of Operations and has established relationships with companies such as BP, Amoco, Citgo and others. From 1998 to 2001, in his position as Executive Vice President of Kux Manufacturing, Inc., a supplier of automotive products for the US market, he has established longstanding relationships with companies such as Honda, Nissan, GM, Toyota, Ford and Mazda among others. From 2001 until joining MWW, he served as President and CEO of Kux Architectural Products and as Director of Business for Engineered Tax Services. Mr. Pinkerton is also currently holding the position of Chief Financial Officer.

On October 10, 2009, Marketing Worldwide Corporation (the “Company”) appointed James E. Davis as the Company’s Chief Financial Officer. Mr. Davis replaced James Marvin, the Company’s former Chief Financial Officer. James Davis, 55, brings 30 years of experience in different positions in the financial and automotive sectors, including public accounting as Audit Manager at Coopers & Lybrand. In this capacity he audited middle market companies’ financial reporting and assisted in taking privately owned companies public. From 1999 through 2008, Mr. Davis was the Chief Financial Officer for the Epoch Restaurant Group and Wisne Holdings. The Epoch Restaurant Group owned and operated six restaurants and a full service catering company. Wisne Holdings was a real estate and investment entity specializing in a multitude of investments for profit. The Wisne Family created Wisne Holdings after selling Progressive Tool & Industry Company, a tier 1 automotive supplier, where Mr. Davis was the financial controller following his engagement with Coopers & Lybrand. As Controller for Progressive Tool & Industry Company, Mr. Davis was responsible for new business development, banking and investor relations and financial planning and reporting. From January 2008 through August 2009, Mr. Davis focused on troubled companies and participated in restructuring and turnaround efforts through CFO Associates, LLC. Mr. Davis resigned from MWW in November 2011 after the fiscal year end of September 30, 2011 and no longer holds any management roles within the Company.

Rainer Poertner, Business Development, has served as a consultant to the Company since its inception. Mr. Poertner has a 23-year record of accomplishments in founding, leading and consulting with private and publicly traded companies in the USA and Europe. As founder, CEO, Chairman and majority shareholder of two publicly traded companies; he was responsible for managing the companies' financial, technical and business development and secured funding for acquisitions and corporate working capital purposes through a network of private investors and US and overseas investment banking firms.

Debbie Hallman, which has been employed by the Company since inception has taken over the responsibility as director of accounting and is working closely with our outside CPA and our auditors in preparation and the submission of all SEC filings.

Section 16(a) Beneficial Ownership Reporting Compliance

MWW is not aware of any reporting person that failed to file on a timely basis, reports required by Section 16(a) of the Exchange Act during the most recent fiscal year.

Page 16

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (CONTINUED)

Code of Ethics

MWW does not have a code of ethics but has drafted a document and intends to implement a code of ethics in ~~2011~~2013.

Page 18

ITEM 11. EXECUTIVE COMPENSATION.

The Summary Compensation Table below identifies the compensation to the officers of MWW.

SUMMARY COMPENSATION TABLE

(a)	~~(b)~~	(b)	~~(c)~~		(c)	~~(d)~~		(d)	~~(e)~~		(e)	~~(f)~~		(f)	~~(g)~~		(g)	~~(h)~~		(h)	~~(i)~~		(i)	~~(j)~~		(j)
																		~~Non-~~		Non-
Name															~~Nonequity~~		Nonequity	~~qualified~~		qualified
and															~~incentive~~		incentive	~~deferred~~		deferred	~~All~~		All
Principal									~~Stock~~		Stock	~~Option~~		Option	~~plan~~		plan	~~compensation~~		compensation	~~other~~		other
Position	~~Year~~	Year	~~Salary($)~~		Salary($)	~~Bonus($)~~		Bonus($)	~~Awards($)~~		Awards($)	~~Awards($)~~		Awards($)	~~compensation($)~~		compensation($)	~~earnings($)~~		earnings($)	~~compensation($)~~		compensation($)	~~Total ($)~~		Total ($)
Michael	~~2011~~		2012	0		0	0		0	0		30,000	0		0	0		0	0		0	0		0	0		30,000
Winzkowski	~~2010~~		2011	0		0	0		0	~~10,000~~		0	0		0	0		0	0		0	0		0	~~10,000~~		0
Chairman of the Board	~~2009~~		2010	~~70,000~~		0	0		0	0		10,000	0		0	0		0	0		0	0		0	~~70,000~~		10,000
Charles	~~2011~~		2012	~~75,877~~		73,326	0		0	~~16,000~~		30,000	~~20,000~~		0	0		0	0		0	0		0	~~111,877~~		103,326
Pinkerton	~~2010~~		2011	~~5,000~~		75,877	0		0	0		16,000	0		20,000	0		0	0		0	0		0	~~5,000~~		111,877
CEO	~~2009~~		2010	0		5,000	0		0	0		0	0		0	0		0	0		0	0		0	0		5,000
James Davis	2011			87,230			0			0			0			0			0			0			87,230
CFO	2010			100,000			0			16,000			0			0			0			0			116,000
	2009			5,500			0			0			0			0			0			0			5,500
James Marvin	2011			0			0			0			0			0			0			0			0
COO	2010			0						0			0			0			0			0			0
	2009			97,000			0			0			0			0			0			0			97,000

MWW did not make any option or SAR grants in its last fiscal year and has not adopted a long term incentive compensation plan.

Page 19

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth ~~information regarding~~ the ~~beneficial~~ ownership, ofas ~~our~~January ~~common~~9, ~~stock~~2013, ~~and preferred stock as~~ of ~~September~~our ~~30,~~voting ~~2011,~~securities by each person known by us to be the beneficial owner of more than 5% of our outstanding ~~shares~~voting securities, each of ~~common~~our ~~stock;~~directors oand ~~each~~executive officers; and all of our directors and executive officers as a group. The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the SEC and ~~directors;~~is not necessarily indicative of ownership for any other purpose. This table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and osubject to community property laws where applicable, we believe that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Except as set forth below, applicable percentages are based upon 470,667,013 shares of Common Stock outstanding as of January 9, 2013. The Company's Series D Super Voting Preferred Stock has 10,000 votes per share and votes with the Common Stock on all ~~our~~matters. ~~officers~~As such, the owners of the Company's outstanding 90,002 shares of Series D Super Voting Preferred Stock have 900,020,000 votes on all matters and can control the election of directors asand aother ~~group~~matters voted on by the shareholders of the Company.

~~Unless~~Page ~~otherwise indicated, all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.~~17

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS (CONTINUED)

Security Ownership of Certain Beneficial Owners and Management

(1)	(2)	(3)	(4)
Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Class**	Percent
$.001 par value common stock	Michael Winzkowski PO Box 2462, Palm Harbor, FL 34682-2462 Mgmt.	4,914,800 shares (a) (direct)		6.87	%
Series D Preferred	Rainer Poertner	39,062 shares (direct)		43.40	%
$.001 par value common stock	James C. Marvin 4772 Schafer Road	2,032,400 shares (b) (direct)		2.84	%
	2212 Grand Commerce Drive
$.001 par value common stock	Pinckney, MI 48169 Mgmt.	200,000 Options (direct)
$.00001 par value common shares	Howell, MI 48855	12,015,442 shares (direct)		31.61	%
$.001 par value Common stock	Vision Opportunity Master Fund Ltd. 20th West 55th New York, NY 10019	7,052,954 shares (c)		9.86	%
Issued upon conversion of warrants		200,000,000 shares
$.001 par value Common stock	Bonnie A. Hollister 366 Harvard St. Howell, MI 48843	2,032,400 shares		2.84	%
Series D Preferred	Michael Winzkowski	31,156 shares (direct)		34.62	%
$.001 par value common stock	Wendover Investments Limited* 5th Floor, Zephyr House, Mary Street, Grand Cayman, Cayman Islands BWI	4,000 shares (direct)		.01	%
	2212 Grand Commerce Drive
$.001 par value common stock	JCMD, real estate partnership that owns the Howell real estate, and is owned by Michael Winzkowski and James Marvin	3,000,000 shares		4.2	%
$.00001 par value common stock	Howell, MI 48855	5,016,383 shares (direct)		>1	%
$.001 par value common stock	Rainer Poertner 730 Oxford Avenue	632,309 shares (direct)		.88	%
Series D Preferred	Charles Pinkerton	16,902 shares (direct)		18.78	%
$.001 par value common stock underlying stock option	Marina del Rey, CA 90292 Mgmt.	400,000 options (direct)
	2212 Grand Commerce Drive
$.001 par value common stock	All directors and officers as a group (2) individuals)	6,254,800		8.75	%
$.00001 par value common stock	Howell, MI 48855	5,002,667 shares (direct)		>1	%
Series A Convertible Preferred Stock	Vision Opportunity Master Fund, Ltd.(c) 20 West 55th Street, 5th Floor New York, NY 10019	3,500,000		100	%
Series D Preferred	Deborah Hallman	2,880 shares (direct)		3.20	%
	2212 Grand Commerce Drive
$.00001 par value common stock	Howell, MI 48855	2,000,000 shares (direct)		>1	%
$.00001 par value common stock	Alpco	63,563,469 shares (direct)		13.50	%
	440 East 400 South
	Salt Lake City, UT 84111
$.00001 par value common stock	BNP Paribas Securities Corp	46,501,366 shares (direct)		9.88	%
	555 Croton Road
	King of Prussia, PA 19406
$.00001 par value common stock	St. George Investments	41,760,000 shares (direct)		34.87	%
	303 East Wacker Drive
Issued upon conversion of Notes Payable	Ste 1200 Chicago, IL 60601	187,862,069 shares
$.00001 par value common stock	National Financial Services LLC	35,938,233 shares (direct)		7.64	%
	New Port Office Center 111
	499 Washington Blvd. 5th Fl NJ5A
	Jersey City, NJ 07310-2010
$.00001 par value common stock	SGI Group LLC	28,876,000 shares (direct)		6.14	%
	6538 North Christina Ave.
	Lincolnwood, IL 60712
$.00001 par value common stock	Asher Enterprises Inc.	27,540,231 shares (direct)		71.32	%
	One Linden Place, Ste. 207
Issued upon conversion of Notes Payable	Great Neck, NY 11021	1,074,323,943 shares
$.00001 par value common stock	Panache Capital LLC	24,454,000 shares (direct)		39.53	%
	303 Merrick Road, Ste. 504
Issued upon conversion of Notes Payable	Lynbrook, NY 11563	572,485 shares
Issued upon conversion of Series E Preferred		266,666,667 shares
$.00001 par value common stock	Southridge Partners II LP	18,100,000 shares (direct)		48.61	%
	90 Grove Street Ste 204
Issued upon conversion of Notes Payable	Ridgefield, CT 06877	409,523,810 shares
Issued upon conversion of Series E Preferred		457,265 Shares
$.00001 par value common stock	Hillair Capital Investment LP	22,775,000 shares (direct)		51.87	%
	21 Old Katonah Dr.
Issued upon conversion of Notes Payable	Katona, NY 10536	460,000,000 shares

Page 2018

* Wendover Investments Limited owns 4,000 shares of common stock and a common stock purchase warrant to acquire up to 1,000,000 shares of common stock at purchase price of $.50 per share. Mr. Robert Lyons is the principal of Wendover Investments Limited. Under Rule 13(d) (1) a person is deemed the beneficial owner if that person has the right to acquire the securities within 60 days pursuant to options, warrants, conversion privileges or other rights.

** Percentages are based upon the amount of outstanding securities at September 30, 2011 of 71,494,819 shares, plus for each person or group, any securities that person or group has the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights.

(a) Does not include 1,000 shares purchased by Ms. Johanna Winzkowski in May 2004, the mother of Michael Winzkowski. Michael Winzkowski disclaims any beneficial ownership of the shares referred to in the preceding sentence.

(b) Does not include 10,000 shares purchased by Ms. Joanne Marvin or 770 shares purchased by Mr. Scott F. Marvin in May 2004, the mother and brother of James C. Marvin, respectively. James C. Marvin disclaims any beneficial ownership of the shares referred to in the preceding sentence.

(c) Warrants allow the holder to purchase up to 2,500,000 shares of common stock at a price of $.70 per share until June 23, 2012; the Series E Warrants allow the holder to purchase up to 2,500,000 shares of common stock at a price of $.85 per share until June 23, 2012; and the Series F Warrants allow the holder to purchase up to 2,500,000 shares of common stock at a price of $1.20 per share until April 23, 2012. All of the Warrants sold to Vision Opportunity Master Fund, Ltd. contain anti-dilution protection and other rights. Further, the transaction documents provided that Vision Opportunity Master Fund, Ltd. may not acquire common stock upon conversion of the Series A Convertible Preferred Stock or upon exercise of any warrants to the extent that, upon conversion or exercise the number of shares of common stock beneficially owned would exceed 9.99% of the issued and outstanding share of common stock of MWW. On September 27, 2007, the Fund entered into Amendment No.1 (the "Series F Amendment"), by and among the Issuer and the Fund whereby the Series F Warrant exercise price was reduced to $0.01 per share. All other terms and provisions of the Series F Warrant remain unmodified and in full force and effect. On September 27, 2007, the Fund entered into Amendment No. 1 (the "Series J Amendment"), by and among the Issuer and the Fund whereby the Series J Warrant exercise price was reduced to $0.50 per share and the Ownership Cap and Exercise Restriction of 9.99% was deleted in its entirety. All other terms and provisions of the Series J Warrant remain unmodified and in full force and effect. Subsequent to the Series J Amendment, the Fund exercised the Series J Warrant for four million (4,000,000) shares of Common Stock of the Issuer at an exercise price of $0.50 leaving the Series J Warrant with one million (1,000,000) shares of Common Stock available for exercise.

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.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE.

On October 1, 2003, MWW acquired 100% of the membership interests in Marketing Worldwide LLC, a Michigan limited liability company ("MWWLLC"), in a tax-free exchange whereby MWWLLC became a wholly owned subsidiary of MWW. Under the Purchase Agreement, the three selling members of MWWLLC were issued 9,600,000 shares of common stock. Michael Winzkowski received 4,564,800 shares, James C. Marvin received 4,564,800 shares and Gregory G. Green received 470,400 shares of MWW under the Purchase Agreement. Immediately following the transaction, Michael Winzkowski and James C. Marvin became the officers and directors of MWW. Mr. Winzkowski and Mr. Marvin serve as members of MWW's board of directors without compensation.

Michael Winzkowski, James C. Marvin, Gregory G. Green, Richard O. Weed and Rainer Poertner are defined as promoters by the Securities Act Rules since each directly or indirectly took initiative in founding and organizing the business of MWW. Mr. Weed served as the sole Director, President, Secretary and Treasurer of MWW from its inception on July 21, 2003 until the effective date of the acquisition of MWWLLC on October 1, 2003. Mr. Weed was granted a Stock Option to purchase 250,000 shares of MWW common stock at $1.00 per share that expires December 31, 2008 as an incentive to represent MWW as legal counsel. Mr. Weed is a partner in Weed & Co. LLP and has provided legal services to MWW under a Fee Agreement since August 15, 2003. Mr. Poertner has provided consulting services to MWWLLC since April 2003 and to MWW since August 2003. Under the Consulting Agreement with MWW dated July 1, 2005, Mr. Poertner receives $10,000 per month plus expenses, which has been increased to $15,000 per month in April of 2007.

On March 5, 2004, MWW and MWWLLC entered into a five year real property lease, beginning on January 1, 2005 with a related party (JCMD Properties LLC See Note K) for use of warehouse and general offices located in the city of Howell, Michigan. The lease was terminated at the time the real estate was sold to an unrelated party on November 30, 2010. The buyer of the property was known to the sellers and the buyer’s Chief Financial Officer is the former wife of one of the partners of JCMD.

MWW does not have any independent directors.

Page 21

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table sets forth fees billed to us by our auditors during the fiscal years ended September 30, ~~2011~~2012 and ~~2010~~2011 for: (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly financial statements, (ii) services by our auditor that are reasonably related to the performance of the audit or review of our consolidated financial statements and that are not reported as Audit Fees, (iii) services rendered in connection with tax compliance, tax advice and tax planning, and (iv) all other fees for services rendered.

			~~September 30,~~	September 30,		~~September 30,~~	September 30 ,
			2011			2010
				2012			2011
(i)	~~Audit Fees~~	Audit Fees	$	~~164,283~~$	79,980	$	~~143,739~~$	164,283
(ii)	~~Audit Related Fees~~	Audit Related Fees		~~13,650~~			-	13,650
(iii)	~~Tax Fees~~	Tax Fees		-	-		-	-
(v)	~~All Other Fees~~	All Other Fees		—	—		—	—
Total fees			$	~~177,933~~$	79,980	$	~~143,739~~$	177,933

AUDIT FEES. Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by the Company's auditor/s in connection with statutory and regulatory filings or engagements."

AUDIT-RELATED FEES. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of MWW's consolidated financial statements and are not reported under "Audit Fees." ~~There were no Audit-Related services provided in fiscal 2010. There were fees incurred for 2011.~~

TAX FEES. Consists of fees billed for professional services for tax compliance, tax advice and tax planning.

ALL OTHER FEES. Consists of fees for products and services other than the services reported above.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT AUDITORS

The Company currently does not have a designated Audit Committee, and accordingly, the Company's Board of Directors' policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre- approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Company's Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.

Page 2219

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) See the consolidated financial statements listed in Item 8.

(b) 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 ******

(10)(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.

Page 23

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

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

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

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

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

Page 20

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTIUNUED)

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

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

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

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

Page 2421

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/ Charles Pinkerton
		NAME: Charles Pinkerton
		TITLE: CHIEF EXECUTIVE OFFICER
		Date: January 18, 2012
		Date: January 14, 2013

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/ Charles Pinkerton
		NAME: Charles Pinkerton
		TITLE: CHIEF EXECUTIVE OFFICER,
		SECRETARY AND DIRECTOR
		Date: January 18, 2012
		Date: January 14, 2013

	BY:	/s/ Charles Pinkerton
		NAME: Charles Pinkerton
		TITLE: CHIEF FINANCIAL OFFICER
		Date: January 18, 2012
		Date: January 14, 2013

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