| 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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Table of Contents

MEDIA SCIENCES 

| ITEM 1. | FINANCIAL STATEMENTS                                                                                                                                    | 3      |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|    |                                                                                                                                                    |   |
|    | Condensed Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and June 30, 2010                                                                | 3      |
|    |                                                                                                                                                    |   |
|    | Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended March 31, 2011 and 2010 (Unaudited)                          | 4      |
|    |                                                                                                                                                    |   |
|    | Condensed Consolidated Statement of Changes in Shareholders’ Equity and Comprehensive Income for the Nine Months Ended March 31, 2011 (Unaudited) | 5      |
|    |                                                                                                                                                    |   |
|    | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2011 and 2010 (Unaudited)                                           | 6      |
|    |                                                                                                                                                    |   |
|    | Notes to Condensed Consolidated Financial Statements                                                                                                    | 7      |
|    |                                                                                                                                                    |   |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                             | 20     |
|    |                                                                                                                                                    |   |
| 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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Table of Contents

FINANCIAL STATEMENTS

MEDIA SCIENCES 

|                                                                                                                                                                                                                                          |   | March 31, 2011 |       | June 30, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|----------|--------|
| ASSETS                                                                                                                                                                                                                                        |   | (Unaudited)    |       | 2010     |   |
| CURRENT ASSETS:                                                                                                                                                                                                                               |   |           |       |     |   |
|     Cash and cash equivalents                                                                                                                                                                                             |   | $              | 6,628,346  |     |   | $ | 317,611 |   |
|     Accounts receivable, net                                                                                                                                                                                              |   |           | 1,397,343  |     |   |   | 2,674,918 |   |
|     Inventories, net                                                                                                                                                                                                      |   |           | 759,336    |     |   |   | 1,420,806 |   |
|     Taxes receivable                                                                                                                                                                                                      |   |           | –    |     |   |   | 50,506 |   |
|     Prepaid expenses and other current assets                                                                                                                                                                             |   |           | 67,587     |     |   |   | 205,423 |   |
|     Assets of discontinued operations                                                                                                                                                                                     |   |           | –    |     |   |   | 7,281,721 |   |
|         Total Current Assets                                                                                                                                                                          |   |           | 8,852,612  |     |   |   | 11,950,985 |   |
|                                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
| PROPERTY AND EQUIPMENT, NET                                                                                                                                                                                                                   |   |           | 925,106    |     |   |   | 1,129,222 |   |
|                                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
| OTHER ASSETS:                                                                                                                                                                                                                                 |   |           |       |     |   |   |   |   |
|     Goodwill and other intangible assets, net                                                                                                                                                                             |   |           | 1,120,072  |     |   |   | 1,120,072 |   |
|     Restricted cash held in escrow account                                                                                                                                                                                |   |           | 1,100,136  |     |   |   | – |   |
|     Other assets                                                                                                                                                                                                          |   |           | 70,911     |     |   |   | 85,984 |   |
|         Total Other Assets                                                                                                                                                                            |   |           | 2,291,119  |     |   |   | 1,206,056 |   |
|                                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                                                                  |   | $              | 12,068,837 |     |   | $ | 14,286,263 |   |
|                                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                                    |   |           |       |     |   |   |   |   |
|                                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
|     Accounts payable                                                                                                                                                                                                      |   | $              | 307,324    |     |   | $ | 1,201,154 |   |
|     Accrued compensation and benefits                                                                                                                                                                                     |   |           | 76,800     |     |   |   | 555,136 |   |
|     Accrued severance expense                                                                                                                                                                                             |   |           | 502,610    |     |   |   | – |   |
|     Other accrued expenses and current liabilities                                                                                                                                                                        |   |           | 564,686    |     |   |   | 443,641 |   |
|      Income tax payable                                                                                                                                                                                              |   |           | 5,474      |     |   |   | – |   |
|     Accrued product warranty costs                                                                                                                                                                                        |   |           | 205,602    |     |   |   | 432,548 |   |
|     Deferred rent liability                                                                                                                                                                                               |   |           | 34,853     |     |   |   | 28,493 |   |
|     10% subordinated debt, net of discount of $113,524 at March 31, 2011                                                                                                                                                  |   |           | 1,136,476  |     |   |   | – |   |
|     Deferred revenue                                                                                                                                                                                                      |   |           | –    |     |   |   | 20,097 |   |
|         Total Current Liabilities                                                                                                                                                                     |   |           | 2,833,825  |     |   |   | 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                                                                                                                                                                                                                             |   |           | 2,833,825  |     |   |   | 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        March 31, 2011 and 13,292,374 and 12,699,914 shares at June 30, 2010 |   |           | 13,342     |     |   |   | 12,700 |   |
|     Additional paid-in capital                                                                                                                                                                                            |   |           | 13,631,183 |     |   |   | 13,277,405 |   |
|     Accumulated other comprehensive income (loss)                                                                                                                                                                         |   |           | 23,854     |     |   |   | 1,402 |   |
|     Accumulated deficit                                                                                                                                                                                                   |   |           | (4,433,367 | )        |   |   | (5,956,239 | ) |
|         Total Shareholders’ Equity                                                                                                                                                              |   |           | 9,235,012  |     |   |   | 7,335,268 |   |
|                                                                                                                                                                                                                                          |   |           |       |     |   |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                              |   | $              | 12,068,837 |     |   | $ | 14,286,263 |   |

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Table of Contents

MEDIA SCIENCES 

|                                                                                                                                                                       |   | Three Months EndedMarch 31, |       |   | Nine Months EndedMarch 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|----------------------------|--------|
|                                                                                                                                                                       |   | 2011                        |       |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| NET REVENUES                                                                                                                                                               |   | $                           | 2,227,666  |   |                       | $      | 2,141,376 |   |   | $ | 7,072,304 |   |   | $ | 6,668,914 |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| COST OF GOODS SOLD:                                                                                                                                                        |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|     Cost of goods sold, excluding depreciation and        amortization, product warranty, shipping and freight |   |                        | 985,347    |   |                       |   | 805,113 |   |   |   | 2,938,402 |   |   |   | 2,031,264 |   |
|     Depreciation and amortization                                                                                                                      |   |                        | 52,576     |   |                       |   | 54,755 |   |   |   | 165,453 |   |   |   | 214,296 |   |
|     Product warranty                                                                                                                                   |   |                        | 37,578     |   |                       |   | 468,261 |   |   |   | 447,529 |   |   |   | 1,456,124 |   |
|     Shipping and freight                                                                                                                               |   |                        | 16,758     |   |                       |   | 146,992 |   |   |   | 223,845 |   |   |   | 414,244 |   |
|         Total cost of goods sold                                                                                                   |   |                        | 1,092,259  |   |                       |   | 1,475,121 |   |   |   | 3,775,229 |   |   |   | 4,115,928 |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| GROSS PROFIT                                                                                                                                                               |   |                        | 1,135,407  |   |                       |   | 666,255 |   |   |   | 3,297,075 |   |   |   | 2,552,986 |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| OTHER COSTS AND EXPENSES:                                                                                                                                                  |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|     Research and development                                                                                                                           |   |                        | 65,625     |   |                       |   | 264,787 |   |   |   | 335,800 |   |   |   | 755,071 |   |
|     Selling, general and administrative, excluding        depreciation and amortization and severance          |   |                        | 938,165    |   |                       |   | 1,920,799 |   |   |   | 3,687,723 |   |   |   | 5,240,228 |   |
|     Severance                                                                                                                                          |   |                        | –    |   |                       |   | – |   |   |   | 1,682,427 |   |   |   | – |   |
|     Depreciation and amortization                                                                                                                      |   |                        | 28,613     |   |                       |   | 45,432 |   |   |   | 105,804 |   |   |   | 183,230 |   |
|         Total other costs and expenses                                                                                             |   |                        | 1,032,403  |   |                       |   | 2,231,018 |   |   |   | 5,811,754 |   |   |   | 6,178,529 |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) FROM OPERATIONS                                                                                                                                              |   |                        | 103,004    |   |                       |   | (1,564,763 | ) |   |   | (2,514,679 | ) |   |   | (3,625,543 | ) |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Other income                                                                                                                                                               |   |                        | –    |   |                       |   | 213,769 |   |   |   | – |   |   |   | 213,769 |   |
| Interest expense                                                                                                                                                           |   |                        | (31,250    | )      |                       |   | (89,347 | ) |   |   | (166,474 | ) |   |   | (266,116 | ) |
| Interest income                                                                                                                                                            |   |                        | 7,610      |   |                       |   | 46 |   |   |   | 10,297 |   |   |   | 117 |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Gain (loss) on change in fair value of warrant liabilities                                                                                                                 |   |                        | –    |   |                       |   | 4,924 |   |   |   | – |   |   |   | (38 | ) |
| Amortization of debt discount on convertible debt                                                                                                                          |   |                        | (50,800    | )      |                       |   | (37,856 | ) |   |   | (141,853 | ) |   |   | (105,708 | ) |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                                                                                               |   |                        | 28,564     |   |                       |   | (1,473,227 | ) |   |   | (2,812,709 | ) |   |   | (3,783,519 | ) |
| Benefit (Provision) for income taxes                                                                                                                                       |   |                        | (4,000     | )      |                       |   | (2,033,167 | ) |   |   | 1,299,260 |   |   |   | (1,934,579 | ) |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS                                                                                                                               |   |                        | 24,564     |   |                       |   | (3,506,394 | ) |   |   | (1,513,449 | ) |   |   | (5,718,098 | ) |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES                                                                                                            |   |                        | (7,584     | )      |                       |   | 803,383 |   |   |   | 166,881 |   |   |   | 2,705,002 |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| GAIN ON SALE OF DISCONTINUED OPERATIONS, NET OF INCOME TAXES                                                                                                               |   |                        | –    |   |                       |   | – |   |   |   | 2,869,440 |   |   |   | – |   |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                                                                                                                                          |   | $                           | 16,980     |   |                       | $      | (2,703,011 | ) |   | $ | 1,522,872 |   |   | $ | (3,013,096 | ) |
|                                                                                                                                                                       |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| BASIC EARNINGS (LOSS) PER SHARE                                                                                                                                            |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|     Continuing operations                                                                                                                              |   | $                           | 0.00       |   |                       | $      | (0.29 | ) |   | $ | (0.12 | ) |   | $ | (0.48 | ) |
|     Discontinued operations                                                                                                                            |   | $                           | 0.00       |   |                       | $      | 0.07 |   |   | $ | 0.24 |   |   | $ | 0.23 |   |
|     Net income (loss)                                                                                                                                  |   | $                           | 0.00       |   |                       | $      | (0.22 | ) |   | $ | 0.12 |   |   | $ | (0.25 | ) |
| DILUTED EARNINGS (LOSS) PER SHARE                                                                                                                                          |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|      Continuing operations                                                                                                                        |   | $                           | 0.00       |   |                       | $      | (0.29 | ) |   | $ | (0.12 | ) |   | $ | (0.48 | ) |
|      Discontinued operations                                                                                                                      |   | $                           | 0.00       |   |                       | $      | 0.07 |   |   | $ | 0.24 |   |   | $ | 0.23 |   |
|      Net income (loss)                                                                                                                            |   | $                           | 0.00       |   |                       | $      | (0.22 | ) |   | $ | 0.12 |   |   | $ | (0.25 | ) |
| WEIGHTED AVERAGE SHARES USED TO COMPUTE LOSS PER SHARE                                                                                                                     |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|     Basic                                                                                                                                              |   |                        | 13,354,088 |   |                       |   | 12,291,692 |   |   |   | 12,845,972 |   |   |   | 12,025,210 |   |
|    Diluted                                                                                                                                                  |   |                        | 13,426,525 |   |                       |   | 12,291,692 |   |   |   | 12,845,972 |   |   |   | 12,025,210 |   |

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Table of Contents

 

|                                                                 |   |         |       |   |       |   |    | 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                                         |   |         | –    |   |       |   | – |          |   |   | –       |   |   |                | – |   |   |   | 1,522,872 |   |   |   | 1,522,872 |   |
|    Cumulative translation adjustment                  |   |         | –    |   |       |   | – |          |   |   | –       |   |   |                | 22,452  |   |   |   | – |   |   |   | 22,452 |   |
|        Total comprehensive income |   |         | –    |   |       |   | – |          |   |   | –       |   |   |                | – |   |   |   | – |   |   |   | 1,545,324 |   |
|   Vested restricted stock units                            |   |         | 642,460    |   |       |   | 642     |          |   |   | (642          | )      |   |                | – |   |   |   | – |   |   |   | – |   |
|   Stock-based compensation expense                         |   |         | –    |   |       |   | – |          |   |   | 354,420       |   |   |                | – |   |   |   | – |   |   |   | 354,420 |   |
| BALANCES, MARCH 31, 2011                                             |   |         | 13,342,374 |   |       | $      | 13,342  |          |   | $      | 13,631,183    |   |   | $                   | 23,854  |   |   | $ | (4,433,367 | ) |   | $ | 9,235,012 |   |

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Table of Contents

|                                                                                                                                                   |   | Nine Months EndedMarch 31, |           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|----------------|
|                                                                                                                                                   |   | 2011                       |           |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                   |   |                       |           |   |   |   |
|     Net income (loss)                                                                                                              |   | $                          | 1,522,872      |   |   | $ | (3,013,096 | ) |
|     Adjustments to reconcile net loss to net cash  used in operating                                                     |   |                       |           |   |   |   |   |   |
|     activities:                                                                                                                    |   |                       |           |   |   |   |   |   |
|             Depreciation and amortization                                                  |   |                       | 332,239        |   |   |   | 545,321 |   |
|             Stock-based compensation expense                                               |   |                       | 353,013        |   |   |   | 470,679 |   |
|             Deferred income taxes                                                          |   |                       | (1,149,630     | ) |   |   | 1,934,579 |   |
|             Provision for (reduction of) inventory obsolescence reserves                   |   |                       | 37,707         |   |   |   | (20,053 | ) |
|             Provision for (recoveries of) returns and doubtful accounts allowance          |   |                       | (32,486        | ) |   |   | 109,239 |   |
|             Amortization of debt discount on convertible debt                              |   |                       | 141,853        |   |   |   | 105,708 |   |
|             Loss on change in fair value of warrant liabilities                            |   |                       | –        |   |   |   | 38 |   |
|             Gain on sale of toner business                                                 |   |                       | (2,869,440     | ) |   |   | – |   |
|             Changes in operating assets and liabilities:                                   |   |                       |           |   |   |   |   |   |
|               Accounts receivable                                                |   |                       | 1,309,936      |   |   |   | 207,602 |   |
|               Inventories                                                        |   |                       | 179,244        |   |   |   | (429,411 | ) |
|               Income taxes                                                       |   |                       | 55,980         |   |   |   | (29,086 | ) |
|               Prepaid expenses and other current assets                          |   |                       | 61,579         |   |   |   | 165,886 |   |
|               Accounts payable                                                   |   |                       | (893,734       | ) |   |   | 293,197 |   |
|               Accrued compensation and benefits                                  |   |                       | (478,336       | ) |   |   | (131,042 | ) |
|               Accrued severance                                                  |   |                       | 502,610        |   |   |   | – |   |
|               Other accrued expenses and current liabilities                     |   |                       | 144,729        |   |   |   | (562,170 | ) |
|               Accrued product warranty costs                                     |   |                       | (226,946       | ) |   |   | (611 | ) |
|               Deferred rent liability                                            |   |                       | (23,157        | ) |   |   | (56,448 | ) |
|               Deferred revenue                                                   |   |                       | (20,097        | ) |   |   | (205,835 | ) |
|                  Net cash used in operating activities            |   |                       | (1,052,064     | ) |   |   | (615,503 | ) |
|                                                                                                                                                   |   |                       |           |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                   |   |                       |           |   |   |   |   |   |
|     Increase in restricted cash                                                                                                    |   |                       | (1,100,136     | ) |   |   | – |   |
|     Purchases of property and equipment                                                                                            |   |                       | (237,498       | ) |   |   | (148,461 | ) |
|     Proceeds from sale of operating toner business                                                                                 |   |                       | 11,042,500     |   |   |   | – |   |
|                  Net cash provided (used) in investing activities |   |                       | 9,704,866      |   |   |   | (148,461 | ) |
|                                                                                                                                                   |   |                       |           |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                   |   |                       |           |   |   |   |   |   |
|      Decrease in restricted cash                                                                                              |   |                       | –        |   |   |   | 32,515 |   |
|      Bank credit line proceeds (repayments), net                                                                              |   |                       | (840,863       | ) |   |   | 439,057 |   |
|      Bank term loan repayments                                                                                                |   |                       | (1,500,000     | ) |   |   | – |   |
|      Capital lease obligation repayments                                                                                      |   |                       | –        |   |   |   | (69,815 | ) |
|                  Net cash used in financing activities            |   |                       | (2,340,863     | ) |   |   | 401,757 |   |
|     Effect of exchange rate changes on cash and cash equivalents                                                                   |   |                       | (1,204         | ) |   |   | (30,651 | ) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                                   |   |                       | 6,310,735      |   |   |   | (392,858 | ) |
|                                                                                                                                                   |   |                       |           |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                                                                         |   |                       | 317,611        |   |   |   | 550,602 |   |
|                                                                                                                                                   |   |                       |           |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                                                                                               |   | $                          | 6,628,346      |   |   | $ | 157,744 |   |
|                                                                                                                                                   |   |                       |           |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                                                                                                     |   |                       |           |   |   |   |   |   |
|     Interest paid                                                                                                                  |   | $                          | 83,680         |   |   | $ | 221,369 |   |
|     Income taxes paid (refunded)                                                                                                   |   | $                          |   (44,500 | ) |   | $ | 49,160 |   |
|                                                                                                                                                   |   |                       |           |   |   |   |   |   |

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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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|                                                                                |               |   | March 312011 |      |   |          |   |
|-------------------------------------------------------------------------------------|--------------------|--------|--------------|-----------|--------|---------------|--------|
|                                                                                |               |   | (Unaudited)  |      |   | June 30, 2010 |   |
| Accounts receivable, net                                                            |               |   |         |      |   |          |   |
|       Accounts receivable, gross                      |               |   | $            | 1,553,537 |   |          | $      | 2,863,598 |   |
|       Allowance for doubtful accounts                 |               |   |         | (40,000   | )      |          |   | (20,000 | ) |
|       Allowance for returns                           |               |   |         | (116,194  | )      |          |   | (168,680 | ) |
|                                                                                |               |   | $            | 1,397,343 |   |          | $      | 2,674,918 |   |
|                                                                                |               |   |         |      |   |          |   |   |   |
| Inventories, net of reserves                                                        |               |   |         |      |   |          |   |   |   |
|       Raw materials                                   |               |   | $            | 435,112   |   |          | $      | 555,252 |   |
|       Finished goods                                  |               |   |         | 477,458   |   |          |   | 981,081 |   |
|       Less:  reserves for obsolescence      |               |   |         | (153,234  | )      |          |   | (115,527 | ) |
|                                                                                |               |   | $            | 759,336   |   |          | $      | 1,420,806 |   |
|                                                                                |               |   |         |      |   |          |   |   |   |
| Property and Equipment, net                                                         | Useful Lives       |   |         |      |   |          |   |   |   |
|       Equipment                                       | 3 – 7 years  |   | $            | 2,806,006 |   |          | $      | 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 |   |
|                                                                                |               |   |         | 5,034,900 |   |          |   | 4,967,624 |   |
|       Less: Accumulated depreciation and amortization |               |   |         | 4,109,794 |   |          |   | 3,838,402 |   |
|                                                                                |               |   | $            | 925,106   |   |          | $      | 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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|   |                |   | March 31, 2011 |    |   |          |   |
|--------|---------------------|--------|----------------|---------|--------|---------------|--------|
|   |                |   | (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 EndedMarch 31, |       |   | Nine Months EndedMarch 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|----------------------------|--------|
|                                                                                                                                                                               |   | 2011                        |       |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| Numerator for basic and diluted:                                                                                                                                                   |   |                        |       |   |                       |   |   |   |   |   |   |   |
|     Income (loss) from continuing operations                                                                                                                   |   | $                           | 24,564     |   |                       | $      | (3,506,394 | ) |   | $ | (1,513,449 | ) |   | $ | (5,718,098 | ) |
|     Income (loss) from discontinued operations                                                                                                                 |   | $                           | (7,584     | )      |                       | $      | 803,383 |   |   | $ | 3,036,321 |   |   | $ | 2,705,002 |   |
|     Net income (loss)                                                                                                                                          |   | $                           | 16,980     |   |                       | $      | (2,703,011 | ) |   | $ | 1,522,872 |   |   | $ | (3,013,096 | ) |
|                                                                                                                                                                               |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Denominator :                                                                                                                                                                      |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|     For basic loss per common share –    weighted average shares outstanding                                                         |   |                        | 13,354,088 |   |                       |   | 12,291,692 |   |   |   | 12,845,972 |   |   |   | 12,025,210 |   |
|     Effect of dilutive securities -  stock options,    unvested restricted stock units and warrants                              |   |                        | 72,437     |   |                       |   | – |   |   |   | – |   |   |   | – |   |
|     For diluted loss per common share –    weighted average shares outstanding adjusted    for assumed exercises |   |                        | 13,426,525 |   |                       |   | 12,291,692 |   |   |   | 12,845,972 |   |   |   | 12,025,210 |   |
|                                                                                                                                                                               |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per share:                                                                                                                                                   |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|    Income (loss) from continuing operations                                                                                                                         |   | $                           | (0.00      | )      |                       | $      | (0.29 | ) |   | $ | ( 0.12 | ) |   | $ | (0.48 | ) |
|    Income from discontinued operations                                                                                                                              |   | $                           | 0.00       |   |                       | $      | 0.07 |   |   | $ | 0.24 |   |   | $ | 0.23 |   |
|    Net income (loss)                                                                                                                                                |   | $                           | 0.00       |   |                       | $      | (0.22 | ) |   | $ | 0.12 |   |   | $ | (0.25 | ) |
|                                                                                                                                                                               |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings (loss) per share:                                                                                                                                                 |   |                        |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|   Income (loss) from continuing operations                                                                                                                               |   | $                           | (0.00      | )      |                       | $      | ( 0.29 | ) |   | $ | (0.12 | ) |   | $ | (0.48 | ) |
|   Income from discontinued operations                                                                                                                                    |   | $                           | 0.00       |   |                       | $      | 0.07 |   |   | $ | 0.24 |   |   | $ | 0.23 |   |
|   Net income (loss)                                                                                                                                                      |   | $                           | 0.00       |   |                       | $      | (0.22 | ) |   | $ | 0.12 |   |   | $ | (0.25 | ) |

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|                 |   | Three Months EndedMarch 31, |      |   | Nine Months EndedMarch 31, |   |
|----------------------|--------|-----------------------------|-----------|--------|----------------------------|--------|
|                 |   | 2011                        |      |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| Options and warrants |   |                        | 1,097,796 |   |                       |   | 752,043 |   |   |   | 1,097,796 |   |   |   | 752,043 |   |

|                                                                                                                                                                            |   | Three Months EndedMarch 31, |    |   | Nine Months EndedMarch 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|--------|----------------------------|--------|
|                                                                                                                                                                            |   | 2011                        |    |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| Stock-based compensation expense by type of award:                                                                                                                              |   |                        |    |   |                       |   |   |   |   |   |   |   |
|            Employee stock options                                                                                        |   | $                           | 3,369   |   |                       | $      | 69,034 |   |   | $ | 138,139 |   |   | $ | 209,589 |   |
|            Employee restricted stock units                                                                               |   |                        | 6,926   |   |                       |   | 44,243 |   |   |   | 129,031 |   |   |   | 185,596 |   |
|            Non-employee director restricted stock           units |   |                        | – |   |                       |   | 15,708 |   |   |   | 87,250 |   |   |   | 83,862 |   |
| Amounts capitalized as inventory                                                                                                                                                |   |                        | – |   |                       |   | (3,237 | ) |   |   | (1,407 | ) |   |   | (8,368 | ) |
| Total stock-based compensation expense                                                                                                                                          |   | $                           | 10,295  |   |                       | $      | 125,748 |   |   |   | 353,013 |   |   |   | 470,679 |   |
| Tax effect of stock-based compensation recognized                                                                                                                               |   |                        | 2,517   |   |                       |   | – |   |   |   | (114,603 | ) |   |   | – |   |
| Net effect on net income/ loss                                                                                                                                                  |   | $                           | 7,778   |   |                       | $      | 125,748 |   |   | $ | 238,410 |   |   | $ | 470,679 |   |

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|                             |   | Three Months EndedMarch 31, |    |   | Nine Months EndedMarch 31, |   |
|----------------------------------|--------|-----------------------------|---------|--------|----------------------------|--------|
|                             |   | 2011 (b)                    |    |   | 2010 (a)                   |   |   | 2011 |   |   | 2010(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 |   |
|   | Nine months ended March 31, 2011:     |   |            |      |   |                          |   |   |   |
|   | Options granted                       |   |            | 100,002   |   |                          |   | 0.34 |   |
|   | Options exercised                     |   |            | –   |   |                          |   | – |   |
|   | Options cancelled/expired/forfeited   |   |            | (79,334   | )      |                          |   | 2.98 |   |
|   | Balance outstanding at March 31, 2011 |   |            | 1,097,796 |   |                          | $      | 3.01 |   |

|   |                   |          |   | Options Outstanding |   |      | Options Exercisable                           |   |
|--------|------------------------|---------------|--------|---------------------|--------|-----------|-----------------------------------------------|--------|
|   | Range ofExercisePrices |          |   | NumberOutstanding   |   |      | WeightedAverageRemainingContractualLife-Years |   |   | WeightedAverageExercisePrice |   |   | NumberVested andExercisable |   |   | WeightedAverageExercisePrice |   |
|   |                   |          |   |                |   |      |                                          |   |   |   |   |   |   |   |   |   |   |
|   | $                      | 0.34 to $0.85 |   |                |   | 166,002   |                                          |   |   | 5.7 |   |   | $ | 0.39 |   |   |   | 166,002 |   |   | $ | 0.39 |   |
|   | $                      | 1.00 to $2.00 |   |                |   | 395,115   |                                          |   |   | 2.3 |   |   |   | 1.97 |   |   |   | 395,115 |   |   |   | 1.97 |   |
|   | $                      | 2.01 to $6.33 |   |                |   | 536,679   |                                          |   |   | 3.7 |   |   |   | 4.58 |   |   |   | 536,679 |   |   |   | 4.58 |   |
|   |                   |          |   |                |   | 1,097,796 |                                          |   |   | 3.5 |   |   | $ | 3.01 |   |   |   | 1,097,796 |   |   | $ | 3.01 |   |

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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 |   |
|                                       |   |            |     |   |                 |   |     |                                          |   |   |   |   |
| Nine months ended March 31, 2011:          |   |            |     |   |                 |   |     |                                          |   |   |   |   |
| 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 March 31, 2011         |   |            | 150,000  |   |                 | $      | 33,000   |                                          |   | $ | 0.22 |   |

|                                                                           |   | Three Months EndedMarch 31, |     |   | Nine Months EndedMarch 31 |   |
|--------------------------------------------------------------------------------|--------|-----------------------------|----------|--------|---------------------------|--------|
|                                                                           |   | 2011                        |     |   | 2010                      |   |   | 2011 |   |   | 2010 |   |
| Accrued product warranty costsat the beginning of the period                   |   | $                           | 285,548  |   |                      | $      | 447,967 |   |   | $ | 432,548 |   |   | $ | 436,578 |   |
|                                                                           |   |                        |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|        Warranties accrued during the period |   |                        | 37,578   |   |                      |   | 468,261 |   |   |   | 447,529 |   |   |   | 1,456,124 |   |
|        Warranties settled during the period |   |                        | (117,524 | )      |                      |   | (480,261 | ) |   |   | (674,475 | ) |   |   | (1,456,735 | ) |
| Net change in accrued warranty costs                                           |   |                        | (79,946  | )      |                      |   | (12,000 | ) |   |   | (226,946 | ) |   |   | (611 | ) |
|                                                                           |   |                        |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Accrued product warranty costsat the end of the period                         |   | $                           | 205,602  |   |                      | $      | 435,967 |   |   | $ | 205,602 |   |   | $ | 435,967 |   |

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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 endedMarch 31, |    |   | Nine months endedMarch 31, |   |
|----------------------------------------------------------|--------|-----------------------------|---------|--------|----------------------------|--------|
|                                                     |   | 2011                        |    |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| Net sales                                                |   | $                           | (254    | )      |                       | $      | 3,033,593 |   |   | $ | 3,927,382 |   |   | $ | 9,599,124 |   |
| Pre-tax income (loss) from discontinued operations       |   | $                           | (7,584  | )      |                       | $      | 803,383 |   |   | $ | 328,526 |   |   | $ | 2,705,002 |   |
| Income tax expense (benefit)                             |   |                        | – |   |                       |   | – |   |   |   | 161,645 |   |   |   | – |   |
| Gain on sale                                             |   |                        | – |   |                       |   | – |   |   | $ | 3,114,133 |   |   |   | – |   |
| Income tax expense                                       |   |                        | – |   |                       |   | – |   |   |   | 244,693 |   |   |   | – |   |
| Income from discontinued operations, net of income taxes |   | $                           | (7,584  | )      |                       | $      | 803,383 |   |   | $ | 3,036,321 |   |   | $ | 2,705,002 |   |

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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

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ITEM 3.

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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SIGNATURE

|                | MEDIA SCIENCES INTERNATIONAL, INC. |
|---------------------|------------------------------------|
|                |                               |   |
| Dated: May 13, 2011 | By:                                | /s/ Marc D. Durand |   |
|                |                               | Marc D, Durand |   |
|                |                               | Chief Executive Officer |   |
|                |                               |   |   |
| Dated: May 13, 2011 | By:                                | /s/ Denise Hawkins |   |
|                |                               | Denise Hawkins |   |
|                |                               | Chief Financial Officer |   |
|                |                               |   |   |

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