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| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| Delaware                                                       | 87-0475073                        |
|----------------------------------------------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |

|   | Large accelerated filer o                                             | Accelerated filer o         |
|--------|-----------------------------------------------------------------------|-----------------------------|
|   | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company x |

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MEDIA SCIENCES 

| ITEM 1. | FINANCIAL STATEMENTS                                                                                                                                | 3      |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|    |                                                                                                                                                |   |
|    | Condensed Consolidated Balance Sheets as of December 31, 2010 (Unaudited) and June 30, 2010                                                         | 3      |
|    |                                                                                                                                                |   |
|    | Condensed Consolidated Statements of Operations for the Three Months and Six Months  Ended December 31, 2010 and 2009 (Unaudited)         | 4      |
|    |                                                                                                                                                |   |
|    | Condensed Consolidated Statement of Changes in Shareholders' Equity and Comprehensive Income for the Six Months Ended December 31, 2010 (Unaudited) | 5      |
|    |                                                                                                                                                |   |
|    | Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2010 and 2009 (Unaudited)                                     | 6      |
|    |                                                                                                                                                |   |
|    | Notes to Condensed Consolidated Financial Statements                                                                                                | 7      |
|    |                                                                                                                                                |   |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                         | 19     |
|    |                                                                                                                                                |   |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                          | 24     |
|    |                                                                                                                                                |   |
| ITEM 4. | CONTROLS AND PROCEDURES                                                                                                                             | 24     |

| ITEM 1.    | LEGAL PROCEEDINGS                                           | 25     |
|------------|-------------------------------------------------------------|--------|
|       |                                                        |   |
| ITEM 1A.   | RISK FACTORS                                                | 25     |
|       |                                                        |   |
| ITEM 2.    | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 25     |
|       |                                                        |   |
| ITEM 3.    | DEFAULTS UPON SENIOR SECURITIES                             | 25     |
|       |                                                        |   |
| ITEM 4.    | (REMOVED AND RESERVED)                                      | 25     |
|       |                                                        |   |
| ITEM 5.    | OTHER INFORMATION                                           | 25     |
|       |                                                        |   |
| ITEM 6.    | EXHIBITS                                                    | 25     |
|       |                                                        |   |
| SIGNATURES |                                                        | 26     |

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FINANCIAL STATEMENTS

MEDIA SCIENCES 

|                                                                                                                                                                                                                                             |   | December 31, 2010 |       |   | June 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|----------|--------|
| ASSETS                                                                                                                                                                                                                                           |   | (Unaudited)       |       |   | 2010     |   |
| CURRENT ASSETS:                                                                                                                                                                                                                                  |   |              |       |   |     |   |
|     Cash and cash equivalents                                                                                                                                                                                                |   | $                 | 5,516,024  |   |     | $      | 317,611 |   |
|     Accounts receivable, net                                                                                                                                                                                                 |   |              | 2,409,845  |   |     |   | 2,674,918 |   |
|     Inventories, net                                                                                                                                                                                                         |   |              | 1,015,546  |   |     |   | 1,420,806 |   |
|     Taxes receivable                                                                                                                                                                                                         |   |              | –    |   |     |   | 50,506 |   |
|     Prepaid expenses and other current assets                                                                                                                                                                                |   |              | 99,655     |   |     |   | 205,423 |   |
|     Assets of discontinued operations                                                                                                                                                                                        |   |              | –    |   |     |   | 7,281,721 |   |
|         Total Current Assets                                                                                                                                                                             |   |              | 9,041,070  |   |     |   | 11,950,985 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| PROPERTY AND EQUIPMENT, NET                                                                                                                                                                                                                      |   |              | 1,003,271  |   |     |   | 1,129,222 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| OTHER ASSETS:                                                                                                                                                                                                                                    |   |              |       |   |     |   |   |   |
|     Goodwill and other intangible assets, net                                                                                                                                                                                |   |              | 1,120,072  |   |     |   | 1,120,072 |   |
|      Restricted cash held in escrow account                                                                                                                                                                             |   |              | 1,100,028  |   |     |   | – |   |
|     Other assets                                                                                                                                                                                                             |   |              | 72,436     |   |     |   | 85,984 |   |
|         Total Other Assets                                                                                                                                                                               |   |              | 2,292,536  |   |     |   | 1,206,056 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                                                                     |   | $                 | 12,336,877 |   |     | $      | 14,286,263 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
|     Accounts payable                                                                                                                                                                                                         |   |              | 659,007    |   |     |   | 1,201,154 |   |
|     Accrued compensation and benefits                                                                                                                                                                                        |   |              | 106,109    |   |     |   | 555,136 |   |
|     Accrued severance expense                                                                                                                                                                                                |   |              | 536,725    |   |     |   | – |   |
|     Other accrued expenses and current liabilities                                                                                                                                                                           |   |              | 389,063    |   |     |   | 443,641 |   |
|      Income tax payable                                                                                                                                                                                                 |   |              | 1,474      |   |     |   | – |   |
|     Accrued product warranty costs                                                                                                                                                                                           |   |              | 285,548    |   |     |   | 432,548 |   |
|     Deferred rent liability                                                                                                                                                                                                  |   |              | 42,726     |   |     |   | 28,493 |   |
|     10% subordinated debt, net of discount of $164,324 at December 31, 2010                                                                                                                                                  |   |              | 1,085,676  |   |     |   | – |   |
|     Deferred revenue                                                                                                                                                                                                         |   |              | 847        |   |     |   | 20,097 |   |
|         Total Current Liabilities                                                                                                                                                                        |   |              | 3,107,175  |   |     |   | 2,681,069 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| OTHER LIABILITIES:                                                                                                                                                                                                                               |   |              |       |   |     |   |   |   |
|     Long-term debt                                                                                                                                                                                                           |   |              | –    |   |     |   | 2,340,863 |   |
|     Deferred rent liability                                                                                                                                                                                                  |   |              | –    |   |     |   | 29,517 |   |
|     10% subordinated debt, net of discount of $255,376 in June                                                                                                                                                               |   |              | –    |   |     |   | 994,624 |   |
|     Deferred tax liabilities                                                                                                                                                                                                 |   |              | –    |   |     |   | 904,922 |   |
|         Total Other Liabilities                                                                                                                                                                          |   |              | –    |   |     |   | 4,269,926 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| TOTAL LIABILITIES                                                                                                                                                                                                                                |   |              | 3,107,175  |   |     |   | 6,950,995 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                    |   |              |       |   |     |   |   |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| SHAREHOLDERS' EQUITY:                                                                                                                                                                                                                            |   |              |       |   |     |   |   |   |
|     Preferred Stock, $.001 par value                                                                                                                                                                                         |   |              |       |   |     |   |   |   |
|        Authorized 5,000,000 shares; none issued                                                                                                                                                               |   |              | –    |   |     |   | – |   |
|     Common Stock, $.001 par value 25,000,000 shares authorized;                                                                                                                                                              |   |              |       |   |     |   |   |   |
|         issued and outstanding, respectively, 13,492,374 and 13,342,374 shares at        December 31, 2010 and 13,292,374 and 12,699,914 shares at June 30, 2010 |   |              | 13,342     |   |     |   | 12,700 |   |
|     Additional paid-in capital                                                                                                                                                                                               |   |              | 13,620,874 |   |     |   | 13,277,405 |   |
|     Accumulated other comprehensive income (loss)                                                                                                                                                                            |   |              | 45,833     |   |     |   | 1,402 |   |
|     Accumulated deficit                                                                                                                                                                                                      |   |              | (4,450,347 | )      |     |   | (5,956,239 | ) |
|         Total Shareholders' Equity                                                                                                                                                                       |   |              | 9,229,702  |   |     |   | 7,335,268 |   |
|                                                                                                                                                                                                                                             |   |              |       |   |     |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                       |   | $                 | 12,336,877 |   |     | $      | 14,286,263 |   |

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MEDIA SCIENCES 

|                                                                                                                                                                       |   | Three Months EndedDecember 31, |       |   | Six Months EndedDecember 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|------------|--------|------------------------------|--------|
|                                                                                                                                                                       |   | 2010                           |       |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |
| NET REVENUES                                                                                                                                                               |   | $                              | 2,759,004  |   |                         | $      | 2,242,104 |   |   | $ | 4,844,638 |   |   | $ | 4,527,538 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| COST OF GOODS SOLD:                                                                                                                                                        |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|     Cost of goods sold, excluding depreciation and        amortization, product warranty, shipping and freight |   |                           | 1,141,162  |   |                         |   | 499,029 |   |   |   | 1,953,055 |   |   |   | 1,226,151 |   |
|     Depreciation and amortization                                                                                                                      |   |                           | 55,463     |   |                         |   | 60,983 |   |   |   | 112,877 |   |   |   | 159,541 |   |
|     Product warranty                                                                                                                                   |   |                           | 146,767    |   |                         |   | 519,491 |   |   |   | 409,951 |   |   |   | 987,863 |   |
|     Shipping and freight                                                                                                                               |   |                           | 66,701     |   |                         |   | 108,698 |   |   |   | 207,087 |   |   |   | 267,252 |   |
|         Total cost of goods sold                                                                                                   |   |                           | 1,410,093  |   |                         |   | 1,188,201 |   |   |   | 2,682,970 |   |   |   | 2,640,807 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| GROSS PROFIT                                                                                                                                                               |   |                           | 1,348,911  |   |                         |   | 1,053,903 |   |   |   | 2,161,668 |   |   |   | 1,886,731 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| OTHER COSTS AND EXPENSES:                                                                                                                                                  |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|     Research and development                                                                                                                           |   |                           | 147,225    |   |                         |   | 270,715 |   |   |   | 270,175 |   |   |   | 490,283 |   |
|     Selling, general and administrative, excluding        depreciation and amortization and severance          |   |                           | 1,072,564  |   |                         |   | 1,716,060 |   |   |   | 2,749,558 |   |   |   | 3,319,429 |   |
|     Severance                                                                                                                                          |   |                           | 1,682,427  |   |                         |   | – |   |   |   | 1,682,427 |   |   |   | – |   |
|     Depreciation and amortization                                                                                                                      |   |                           | 34,608     |   |                         |   | 62,956 |   |   |   | 77,191 |   |   |   | 137,798 |   |
|         Total other costs and expenses                                                                                             |   |                           | 2,936,824  |   |                         |   | 2,049,731 |   |   |   | 4,779,351 |   |   |   | 3,947,510 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM OPERATIONS                                                                                                                                                       |   |                           | (1,587,913 | )      |                         |   | (995,828 | ) |   |   | (2,617,683 | ) |   |   | (2,060,779 | ) |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                                                                                                                           |   |                           | (59,769    | )      |                         |   | (89,914 | ) |   |   | (135,224 | ) |   |   | (176,769 | ) |
| Interest income                                                                                                                                                            |   |                           | 2,663      |   |                         |   | 51 |   |   |   | 2,687 |   |   |   | 71 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Gain (loss) on change in fair value of warrant liabilities                                                                                                                 |   |                           | –    |   |                         |   | 14,205 |   |   |   | – |   |   |   | (4,962 | ) |
| Amortization of debt discount on convertible debt                                                                                                                          |   |                           | (47,200    | )      |                         |   | (35,173 | ) |   |   | (91,053 | ) |   |   | (67,852 | ) |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                                                                                                        |   |                           | (1,692,218 | )      |                         |   | (1,106,659 | ) |   |   | (2,841,273 | ) |   |   | (2,310,291 | ) |
| Benefit for income taxes                                                                                                                                                   |   |                           | 1,141,615  |   |                         |   | 16,169 |   |   |   | 1,303,260 |   |   |   | 98,588 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS FROM CONTINUING OPERATIONS                                                                                                                                        |   |                           | (550,603   | )      |                         |   | (1,090,490 | ) |   |   | (1,538,013 | ) |   |   | (2,211,703 | ) |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES                                                                                                            |   |                           | (128,003   | )      |                         |   | 1,039,634 |   |   |   | 174,465 |   |   |   | 1,901,618 |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| GAIN ON SALE OF DISCONTINUED OPERATIONS, NET OF INCOME TAXES                                                                                                               |   |                           | 2,869,440  |   |                         |   | – |   |   |   | 2,869,440 |   |   |   | – |   |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                                                                                                                                          |   | $                              | 2,190,834  |   |                         | $      | (50,856 | ) |   | $ | 1,505,892 |   |   | $ | (310,085 | ) |
|                                                                                                                                                                       |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| BASIC EARNINGS (LOSS) PER SHARE                                                                                                                                            |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|     Continuing operations                                                                                                                              |   | $                              | (0.04      | )      |                         | $      | (0.09 | ) |   | $ | (0.12 | ) |   | $ | (0.19 | ) |
|     Discontinued operations                                                                                                                            |   | $                              | 0.21       |   |                         | $      | 0.09 |   |   | $ | 0.24 |   |   | $ | 0.16 |   |
|     Net income (loss)                                                                                                                                  |   | $                              | 0.17       |   |                         | $      | 0.00 |   |   | $ | 0.12 |   |   | $ | (0.03 | ) |
| DILUTED EARNINGS (LOSS) PER SHARE                                                                                                                                          |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|      Continuing operations                                                                                                                        |   | $                              | (0.04      | )      |                         | $      | (0.09 | ) |   | $ | (0.12 | ) |   | $ | (0.19 | ) |
|      Discontinued operations                                                                                                                      |   | $                              | 0.21       |   |                         | $      | 0.09 |   |   | $ | 0.24 |   |   | $ | 0.16 |   |
|      Net income (loss)                                                                                                                            |   | $                              | 0.17       |   |                         | $      | 0.00 |   |   | $ | 0.12 |   |   | $ | (0.03 | ) |
| WEIGHTED AVERAGE SHARES USED TO COMPUTE LOSS PER SHARE                                                                                                                     |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|     Basic and diluted                                                                                                                                  |   |                           | 13,101,699 |   |                         |   | 11,945,712 |   |   |   | 12,919,001 |   |   |   | 11,891,969 |   |

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MEDIA SCIENCES INTERNATIONAL

|                                                                 |   |         |       |   |       |   |    | Accumulated   |   |   |          |   |   |          |    |
|----------------------------------------------------------------------|--------|--------------|------------|--------|------------|--------|---------|---------------|--------|--------|---------------|--------|--------|---------------|---------|
|                                                                 |   |         |       |   | Additional |   |    | Other         |   |   |          |   |   | Total         |    |
|                                                                 |   | Common Stock |       |   | Paid-in    |   |    | Comprehensive |   |   | Accumulated   |   |   | Shareholders' |    |
|                                                                 |   | Shares       |       |   | Amount     |   |    | Capital       |   |   | Income (loss) |   |   | Deficit       |    |   | Equity |   |
| BALANCES, JUNE 30, 2010                                              |   |         | 12,699,914 |   |       | $      | 12,700  |          |   | $      | 13,277,405    |   |   | $             | 1,402   |   |   | $ | (5,956,239 | ) |   | $ | 7,335,268 |   |
| Components of comprehensive income:                                  |   |         |       |   |       |   |    |          |   |   |          |   |   |          |    |   |   |   |   |   |   |   |   |   |
|    Net income                                         |   |         | –    |   |       |   | – |          |   |   | –       |   |   |          | – |   |   |   | 1,505,892 |   |   |   | 1,505,892 |   |
|    Cumulative translation adjustment                  |   |         | –    |   |       |   | – |          |   |   | –       |   |   |          | 44,431  |   |   |   | – |   |   |   | 44,431 |   |
|        Total comprehensive income |   |         | –    |   |       |   | – |          |   |   | –       |   |   |          | – |   |   |   | – |   |   |   | 1,550,323 |   |
|   Vested restricted stock units                            |   |         | 642,460    |   |       |   | 642     |          |   |   | (642          | )      |   |          | – |   |   |   | – |   |   |   | – |   |
|   Stock-based compensation expense                         |   |         | –    |   |       |   | – |          |   |   | 344,111       |   |   |          | – |   |   |   | – |   |   |   | 344,111 |   |
| BALANCES, DECEMBER31, 2010                                           |   |         | 13,342,374 |   |       | $      | 13,342  |          |   | $      | 13,620,874    |   |   | $             | 45,833  |   |   | $ | (4,450,347 | ) |   | $ | 9,229,702 |   |

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MEDIA SCIENCES 

|                                                                                                                                                   |   | Six Months EndedDecember 31, |           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|----------------|
|                                                                                                                                                   |   | 2010                         |           |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                   |   |                         |           |   |   |   |
|     Net income (loss)                                                                                                              |   | $                            | 1,505,892      |   |   | $ | (310,085 | ) |
|     Adjustments to reconcile net loss to net cash  used in operating                                                     |   |                         |           |   |   |   |   |   |
|     activities:                                                                                                                    |   |                         |           |   |   |   |   |   |
|             Depreciation and amortization                                                  |   |                         | 247,588        |   |   |   | 394,220 |   |
|             Stock-based compensation expense                                               |   |                         | 342,704        |   |   |   | 345,602 |   |
|             Deferred income taxes                                                          |   |                         | (1,149,630     | ) |   |   | (98,588 | ) |
|             Provision for (reduction of) inventory obsolescence reserves                   |   |                         | 3,012          |   |   |   | (58,319 | ) |
|             Provision for returns and doubtful accounts allowance                          |   |                         | (111,586       | ) |   |   | 90,063 |   |
|             Amortization of debt discount on convertible debt                              |   |                         | 91,052         |   |   |   | 67,852 |   |
|             Loss on change in fair value of warrant liabilities                            |   |                         | –        |   |   |   | 4,962 |   |
|             Gain on sale of toner business                                                 |   |                         | (2,869,440     | ) |   |   | – |   |
|             Changes in operating assets and liabilities:                                   |   |                         |           |   |   |   |   |   |
|               Accounts receivable                                                |   |                         | 439,617        |   |   |   | 370,662 |   |
|               Inventories                                                        |   |                         | (42,270        | ) |   |   | (439,308 | ) |
|               Income taxes                                                       |   |                         | 51,980         |   |   |   | (29,074 | ) |
|               Prepaid expenses and other current assets                          |   |                         | 28,029         |   |   |   | 110,598 |   |
|               Accounts payable                                                   |   |                         | (542,112       | ) |   |   | (66,043 | ) |
|               Accrued compensation and benefits                                  |   |                         | (449,027       | ) |   |   | (266,793 | ) |
|               Accrued severance                                                  |   |                         | 536,725        |   |   |   | – |   |
|               Other accrued expenses and current liabilities                     |   |                         | (28,817        | ) |   |   | (244,740 | ) |
|               Accrued product warranty costs                                     |   |                         | (147,000       | ) |   |   | 11,389 |   |
|               Deferred rent liability                                            |   |                         | (15,284        | ) |   |   | (43,498 | ) |
|               Deferred revenue                                                   |   |                         | (19,250        | ) |   |   | (162,115 | ) |
|                  Net cash used in operating activities            |   |                         | (2,127,818     | ) |   |   | (323,215 | ) |
|                                                                                                                                                   |   |                         |           |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                   |   |                         |           |   |   |   |   |   |
|     Increase in restricted cash                                                                                                    |   |                         | (1,100,028     | ) |   |   | – |   |
|     Purchases of property and equipment                                                                                            |   |                         | (231,011       | ) |   |   | (83,207 | ) |
|     Proceeds from sale of operating toner business                                                                                 |   |                         | 11,042,500     |   |   |   | – |   |
|                  Net cash provided (used) in investing activities |   |                         | 9,711,461      |   |   |   | (83,207 | ) |
|                                                                                                                                                   |   |                         |           |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                   |   |                         |           |   |   |   |   |   |
|      Decrease in restricted cash                                                                                              |   |                         | –        |   |   |   | 18,450 |   |
|      Bank credit line proceeds (repayments), net                                                                              |   |                         | (840,863       | ) |   |   | 366,734 |   |
|      Bank term loan repayments                                                                                                |   |                         | (1,500,000     | ) |   |   | – |   |
|      Capital lease obligation repayments                                                                                      |   |                         | –        |   |   |   | (69,815 | ) |
|                  Net cash used in financing activities            |   |                         | (2,340,863     | ) |   |   | 315,369 |   |
|     Effect of exchange rate changes on cash and cash equivalents                                                                   |   |                         | (44,367        | ) |   |   | (21,386 | ) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                                   |   |                         | 5,198,413      |   |   |   | (112,439 | ) |
|                                                                                                                                                   |   |                         |           |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                                                                         |   |                         | 317,611        |   |   |   | 550,602 |   |
|                                                                                                                                                   |   |                         |           |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                                                                                               |   | $                            | 5,516,024      |   |   | $ | 438,163 |   |
|                                                                                                                                                   |   |                         |           |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                                                                                                     |   |                         |           |   |   |   |   |   |
|     Interest paid                                                                                                                  |   | $                            | 83,680         |   |   | $ | 158,426 |   |
|     Income taxes paid (refunded)                                                                                                   |   | $                            |   (44,500 | ) |   | $ | 49,160 |   |
|                                                                                                                                                   |   |                         |           |   |   |   |   |   |

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MEDIA SCIENCES 

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| ·   | Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 2 – inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 – unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                |               |   | December 312010 |      |   |          |   |
|-------------------------------------------------------------------------------------|--------------------|--------|-----------------|-----------|--------|---------------|--------|
|                                                                                |               |   | (Unaudited)     |      |   | June 30, 2010 |   |
| Accounts receivable, net                                                            |               |   |            |      |   |          |   |
|       Accounts receivable, gross                      |               |   | $               | 2,486,939 |   |          | $      | 2,863,598 |   |
|       Allowance for doubtful accounts                 |               |   |            | (20,000   | )      |          |   | (20,000 | ) |
|       Allowance for returns                           |               |   |            | (57,094   | )      |          |   | (168,680 | ) |
|                                                                                |               |   | $               | 2,409,845 |   |          | $      | 2,674,918 |   |
|                                                                                |               |   |            |      |   |          |   |   |   |
| Inventories, net of reserves                                                        |               |   |            |      |   |          |   |   |   |
|       Raw materials                                   |               |   | $               | 519,552   |   |          | $      | 555,252 |   |
|       Finished goods                                  |               |   |            | 614,535   |   |          |   | 981,081 |   |
|       Less:  reserves for obsolescence      |               |   |            | (118,539  | )      |          |   | (115,527 | ) |
|                                                                                |               |   | $               | 1,015,546 |   |          | $      | 1,420,806 |   |
|                                                                                |               |   |            |      |   |          |   |   |   |
| Property and Equipment, net                                                         | Useful Lives       |   |            |      |   |          |   |   |   |
|       Equipment                                       | 3 – 7 years  |   | $               | 2,799,520 |   |          | $      | 2,771,362 |   |
|       Furniture and fixtures                          | 7 years            |   |            | 576,467   |   |          |   | 576,467 |   |
|       Automobiles                                     | 5 years            |   |            | 30,434    |   |          |   | 30,434 |   |
|       Leasehold improvements                          | 5 – 10 years |   |            | 929,762   |   |          |   | 913,743 |   |
|       Tooling and molds                               | 3 years            |   |            | 692,231   |   |          |   | 675,618 |   |
|                                                                                |               |   |            | 5,028,414 |   |          |   | 4,967,624 |   |
|       Less: Accumulated depreciation and amortization |               |   |            | 4,025,143 |   |          |   | 3,838,402 |   |
|                                                                                |               |   | $               | 1,003,271 |   |          | $      | 1,129,222 |   |
|                                                                                |               |   |            |      |   |          |   |   |   |
| Goodwill and other intangible assets, net                                           |               |   |            |      |   |          |   |   |   |
|       Goodwill                                        |               |   | $               | 1,239,368 |   |          | $      | 1,239,368 |   |
|       Other                                           | 1-15 years         |   |            | 46,000    |   |          |   | 46,000 |   |
|                                                                                |               |   |            | 1,285,368 |   |          |   | 1,285,368 |   |
|       Less: Accumulated amortization                  |               |   |            | 165,296   |   |          |   | 165,296 |   |
|                                                                                |               |   | $               | 1,120,072 |   |          | $      | 1,120,072 |   |

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|   |                |   | December 31, 2010 |    |   |          |   |
|--------|---------------------|--------|-------------------|---------|--------|---------------|--------|
|   |                |   | (Unaudited)       |    |   | June 30, 2010 |   |
|   |                |   |              |    |   |          |   |
|   | Bank term notes     |   | $                 | – |   |          | $      | 1,500,000 |   |
|   | Bank line of credit |   |              | – |   |          |   | 840,863 |   |
|   | Long-term debt      |   | $                 | – |   |          | $      | 2,340,863 |   |
|   | Total bank debt     |   | $                 | – |   |          | $      | 2,340,863 |   |

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|                                                                                                                                                                               |   | Three Months EndedDecember 31, |       |   | Six Months EndedDecember 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|------------|--------|------------------------------|--------|
|                                                                                                                                                                               |   | 2010                           |       |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
| Numerator for basic and diluted:                                                                                                                                                   |   |                           |       |   |                         |   |   |   |   |   |   |   |
|     Income (loss) from continuing operations                                                                                                                   |   | $                              | (550,603   | )      |                         | $      | (1,090,490 | ) |   | $ | (1,538,013 | ) |   | $ | (2,211,703 | ) |
|     Income (loss) from discontinued operations                                                                                                                 |   | $                              | 2,741,437  |   |                         | $      | 1,039,634 |   |   | $ | 3,043,905 |   |   | $ | 1,901,618 |   |
|     Net income (loss)                                                                                                                                          |   | $                              | 2,190,834  |   |                         | $      | (50,856 | ) |   | $ | 1,505,892 |   |   | $ | (310,085 | ) |
|                                                                                                                                                                               |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Denominator :                                                                                                                                                                      |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|     For basic loss per common share –    weighted average shares outstanding                                                         |   |                           | 13,101,699 |   |                         |   | 11,837,427 |   |   |   | 12,919,001 |   |   |   | 11,891,969 |   |
|     Effect of dilutive securities -  stock options,    unvested restricted stock units and warrants                              |   |                           | –    |   |                         |   | – |   |   |   | – |   |   |   | – |   |
|     For diluted loss per common share –    weighted average shares outstanding adjusted    for assumed exercises |   |                           | 13,101,699 |   |                         |   | 11,837,427 |   |   |   | 12,919,001 |   |   |   | 11,891,969 |   |
|                                                                                                                                                                               |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per share:                                                                                                                                                   |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|    Income (loss) from continuing operations                                                                                                                         |   | $                              | (0.04      | )      |                         | $      | (0.09 | ) |   | $ | ( 0.12 | ) |   | $ | (0.19 | ) |
|    Income from discontinued operations                                                                                                                              |   | $                              | 0.21       |   |                         | $      | 0.09 |   |   | $ | 0.24 |   |   | $ | 0.16 |   |
|    Net income (loss)                                                                                                                                                |   | $                              | 0.17       |   |                         | $      | 0.00 |   |   | $ | 0.12 |   |   | $ | (0.03 | ) |
|                                                                                                                                                                               |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings (loss) per share:                                                                                                                                                 |   |                           |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|   Income (loss) from continuing operations                                                                                                                               |   | $                              | (0.04      | )      |                         | $      | ( 0.09 | ) |   | $ | (0.12 | ) |   | $ | (0.19 | ) |
|   Income from discontinued operations                                                                                                                                    |   | $                              | 0.21       |   |                         | $      | 0.09 |   |   | $ | 0.24 |   |   | $ | 0.16 |   |
|   Net income (loss)                                                                                                                                                      |   | $                              | 0.17       |   |                         | $      | 0.00 |   |   | $ | 0.12 |   |   | $ | (0.03 | ) |

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|                 |   | Three Months EndedDecember 31, |      |   | Six Months EndedDecember 31, |   |
|----------------------|--------|--------------------------------|-----------|--------|------------------------------|--------|
|                 |   | 2010                           |      |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
| Options and warrants |   |                           | 1,115,196 |   |                         |   | 1,108,436 |   |   |   | 1,115,196 |   |   |   | 1,108,436 |   |

|                                                                                                           |   | Three Months EndedDecember 31, |    |   | Six Months EndedDecember 31, |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|------------------------------|--------|
|                                                                                                           |   | 2010                           |    |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
| Stock-based compensation expense by type of award:                                                             |   |                           |    |   |                         |   |   |   |   |   |   |   |
|            Employee stock options                       |   | $                              | 94,319  |   |                         | $      | 69,411 |   |   | $ | 134,757 |   |   | $ | 140,556 |   |
|            Employee restricted stock units              |   |                           | 94,415  |   |                         |   | 72,972 |   |   |   | 122,105 |   |   |   | 142,024 |   |
|            Non-employee director restricted stock units |   |                           | 71,541  |   |                         |   | 19,653 |   |   |   | 87,249 |   |   |   | 68,153 |   |
| Amounts capitalized as inventory                                                                               |   |                           | (316    | )      |                         |   | (3,237 | ) |   |   | (1,407 | ) |   |   | (5,130 | ) |
| Total stock-based compensation expense                                                                         |   | $                              | 259,599 |   |                         | $      | 158,799 |   |   |   | 342,704 |   |   |   | 345,603 |   |
| Tax effect of stock-based compensation recognized                                                              |   |                           | (85,271 | )      |                         |   | (53,591 | ) |   |   | (112,086 | ) |   |   | (116,247 | ) |
| Net effect on net income/ loss                                                                                 |   | $                              | 174,688 |   |                         | $      | 105,208 |   |   | $ | 230,618 |   |   | $ | 229,356 |   |

|                             |   | Three Months EndedDecember 31, |    |   | Six Months EndedDecember 31, |   |
|----------------------------------|--------|--------------------------------|---------|--------|------------------------------|--------|
|                             |   | 2010 (b)                       |    |   | 2009 (a)                     |   |   | 2010 |   |   | 2009(a) |   |
| Risk-free interest rate          |   |                           | – |   |                         |   | – |   |   |   | 1.7 | % |   |   | – |   |
| Dividend yield                   |   |                           | – |   |                         |   | – |   |   |   | 0.0 | % |   |   | – |   |
| Expected stock price volatility  |   |                           | – |   |                         |   | – |   |   |   | 64 | % |   |   | – |   |
| Average expected life of options |   |                           | – |   |                         |   | – |   |   | 4.8 years |   |   |   | – |   |

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|   |                                     |   | Number ofShares |      |   | WeightedAverageExercise Price |   |
|--------|------------------------------------------|--------|-----------------|-----------|--------|-------------------------------|--------|
|   | Balance outstanding at June 30, 2010     |   |            | 1,077,128 |   |                          | $      | 3.25 |   |
|   | Six months ended December 31, 2010:      |   |            |      |   |                          |   |   |   |
|   | Options granted                          |   |            | 100,002   |   |                          |   | 0.34 |   |
|   | Options exercised                        |   |            | –   |   |                          |   | – |   |
|   | Options cancelled/expired/forfeited      |   |            | (61,934   | )      |                          |   | 3.47 |   |
|   | Balance outstanding at December 31, 2010 |   |            | 1,115,196 |   |                          | $      | 2.98 |   |

|   |                   |          |   | Options Outstanding |   |      | Options Exercisable                           |   |
|--------|------------------------|---------------|--------|---------------------|--------|-----------|-----------------------------------------------|--------|
|   | Range ofExercisePrices |          |   | NumberOutstanding   |   |      | WeightedAverageRemainingContractualLife-Years |   |   | WeightedAverageExercisePrice |   |   | NumberVested andExercisable |   |   | WeightedAverageExercisePrice |   |
|   |                   |          |   |                |   |      |                                          |   |   |   |   |   |   |   |   |   |   |
|   | $                      | 0.34 to $0.85 |   |                |   | 171,602   |                                          |   |   | 5.8 |   |   | $ | 0.40 |   |   |   | 171,602 |   |   | $ | 0.40 |   |
|   | $                      | 1.00 to $2.00 |   |                |   | 405,915   |                                          |   |   | 2.6 |   |   |   | 1.96 |   |   |   | 405,915 |   |   |   | 1.96 |   |
|   | $                      | 2.01 to $6.33 |   |                |   | 537,679   |                                          |   |   | 3.9 |   |   |   | 4.58 |   |   |   | 537,679 |   |   |   | 4.58 |   |
|   |                   |          |   |                |   | 1,115,196 |                                          |   |   | 3.7 |   |   | $ | 2.98 |   |   |   | 1,115,196 |   |   | $ | 2.98 |   |

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|   |                                       |   | Number ofShares |     |   | Grant DateFair Value |   |     | WeightedAverage GrantDate Fair ValuePer Share |   |
|--------|--------------------------------------------|--------|-----------------|----------|--------|----------------------|--------|----------|-----------------------------------------------|--------|
|   | Balance unvested at June 30, 2010          |   |            | 592,460  |   |                 | $      | 456,330  |                                          |   | $ | 0.77 |   |
|   |                                       |   |            |     |   |                 |   |     |                                          |   |   |   |   |
|   | Three months ended December 31, 2010:      |   |            |     |   |                 |   |     |                                          |   |   |   |   |
|   | Restricted stock units granted             |   |            | 200,000  |   |                 |   | 50,025   |                                          |   |   | 0.25 |   |
|   | Restricted stock units vested              |   |            | (642,460 | )      |                 |   | (473,355 | )                                             |   |   | 0.74 |   |
|   | Restricted stock units cancelled/forfeited |   |            | –  |   |                 |   | –  |                                          |   |   | – |   |
|   | Balance unvested at December 31, 2010      |   |            | 150,000  |   |                 | $      | 33,000   |                                          |   | $ | 0.22 |   |

|                                                                           |   | Three Months EndedDecember 31, |     |   | Six Months EndedDecember 31 |   |
|--------------------------------------------------------------------------------|--------|--------------------------------|----------|--------|-----------------------------|--------|
|                                                                           |   | 2010                           |     |   | 2009                        |   |   | 2010 |   |   | 2009 |   |
| Accrued product warranty costsat the beginning of the period                   |   | $                              | 365,548  |   |                        | $      | 436,578 |   |   | $ | 432,548 |   |   | $ | 436,578 |   |
|                                                                           |   |                           |     |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|        Warranties accrued during the period |   |                           | 146,767  |   |                        |   | 519,491 |   |   |   | 409,951 |   |   |   | 987,863 |   |
|        Warranties settled during the period |   |                           | (226,767 | )      |                        |   | (508,102 | ) |   |   | (556,951 | ) |   |   | (976,747 | ) |
| Net change in accrued warranty costs                                           |   |                           | (80,000  | )      |                        |   | 11,389 |   |   |   | (147,000 | ) |   |   | 11,389 |   |
|                                                                           |   |                           |     |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Accrued product warranty costsat the end of the period                         |   | $                              | 285,548  |   |                        | $      | 447,967 |   |   | $ | 285,548 |   |   | $ | 447,967 |   |

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|                                                |   | November 8, 2010 |      |   | June 30, 2010 |   |
|-----------------------------------------------------|--------|------------------|-----------|--------|---------------|--------|
| Inventories, net                                    |   | $                | 4,501,160 |   |          | $      | 4,055,235 |   |
| Prepaid assets                                      |   |             | 130,748   |   |          |   | 39,419 |   |
| Property and Equipment, net                         |   |             | 832,300   |   |          |   | 722,908 |   |
| Goodwill, net                                       |   |             | 2,464,159 |   |          |   | 2,464,159 |   |
|    Assets of discontinued operations |   | $                | 7,928,367 |   |          | $      | 7,281,721 |   |

|                                                     |   | Three months endedDecember 31, |      |   | Six months endedDecember 31, |   |
|----------------------------------------------------------|--------|--------------------------------|-----------|--------|------------------------------|--------|
|                                                     |   | 2010                           |      |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
| Net sales                                                |   | $                              | 1,309,613 |   |                         | $      | 3,344,215 |   |   | $ | 3,927,636 |   |   | $ | 6,565,531 |   |
| Pre-tax income (loss) from discontinued operations       |   | $                              | (168,003  | )      |                         | $      | 1,039,634 |   |   | $ | 336,110 |   |   | $ | 1,901,618 |   |
| Income tax expense (benefit)                             |   |                           | (40,000   | )      |                         |   | – |   |   |   | 161,645 |   |   |   | – |   |
| Gain on sale                                             |   | $                              | 3,114,133 |   |                         |   | – |   |   | $ | 3,114,133 |   |   |   | – |   |
| Income tax expense                                       |   |                           | 244,693   |   |                         |   | – |   |   |   | 244,693 |   |   |   | – |   |
| Income from discontinued operations, net of income taxes |   | $                              | 2,741,437 |   |                         | $      | 1,039,634 |   |   | $ | 3,043,905 |   |   | $ | 1,901,618 |   |

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ITEM 2

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ITEM 

ITEM 4

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ITEM 1.

ITEM 1A. 

ITEM 2. 

ITEM 3. 

ITEM 4

ITEM 5. 

ITEM 6.  

| Exhibit No. |   | Description                                                                                           |
|-------------|--------|-------------------------------------------------------------------------------------------------------|
| 31.1*       |   | Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a) |
| 31.2*       |   | Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a) |
| 32.1*       |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350                           |
| 32.2*       |   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350                           |

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SIGNATURES

|                     | MEDIA SCIENCES INTERNATIONAL, INC. |
|--------------------------|------------------------------------|
|                     |                               |   |
| Dated: February 14, 2011 | By:                                | /s/ Marc D. Durand |   |
|                     |                               | Marc D, Durand |   |
|                     |                               | Chief Executive Officer |   |
|                     |                               |   |   |
| Dated: February 14, 2011 | By:                                | /s/ Denise Hawkins |   |
|                     |                               | Denise Hawkins |   |
|                     |                               | Chief Financial Officer |   |
|                     |                               |   |   |

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