---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

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

For the quarterly period ended March 31, 2003

| | [  ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934
| | ---- | ----------------------------------------------------------------------------------------------------

For the transition period from __________ to __________.

Commission file number: 0-21853

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MEDIA SCIENCES INTERNATIONAL, INC.(Exact name of registrant as specified in its charter)

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| | DELAWARE
(State or other jurisdiction of incorporation or organization) |  | 87-0475073
(I.R.S. Employer Identification No.) | 
| | ----------------------------------------------------------------------- |  | ----------------------------------------------- | 

40 Boroline Road, Allendale, New Jersey 07401
(Address of principal executive offices)

(201) 236-1100
(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the past 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the 90 past days.  YES [X] NO [  ]

As of May 1, 2003, the issuer had 3,577,210 shares of common stock outstanding.

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

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---

MEDIA
SCIENCES INTERNATIONAL, INC.AND
SUBSIDIARIES

# FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2003

TABLE OF CONTENTS

|               |  |                                                                                                          | Page
|-------------- |  | -------------------------------------------------------------------------------------------------------- | ----
|PART I.        |  | FINANCIAL INFORMATION                                                                                    |     
|Item 1.        |  | Financial Statements                                                                                     | 3   
|               |  | Consolidated Balance Sheets as of March 31, 2003 and June 30, 2002                                       | 3   
|               |  | Consolidated Statements of Operations For the Three Months and Nine Months Ended March 31, 2003 and 2002 | 4   
|               |  | Consolidated Statement of Changes in Shareholders' Equity For the Nine Months Ended March 31, 2003       | 5   
|               |  | Consolidated Statements of Cash Flows For the Nine Months Ended March 31, 2003 and 2002                  | 6   
|               |  | Notes to Consolidated Financial Statements                                                               | 7   
|Item 2.        |  | Management's Discussion and Analysis of Financial Condition and
             Results of Operations       | 10  
|Item 3.        |  | Controls and Procedures                                                                                  | 13  
|               |  |                                                                                                          |     
|PART II.       |  | OTHER INFORMATION                                                                                        |     
|Item 2.        |  | Changes in Securities                                                                                    | 14  
|Item 6.        |  | Exhibits and Reports on Form 8-K                                                                         | 14  
|               |  |                                                                                                          |     
|               |  |                                                                                                          |     
|               |  |                                                                                                          |     
|Signatures     |  |                                                                                                          | 15  
|Certifications |  |                                                                                                          | 16  

---

# PART I.  
FINANCIAL INFORMATION

## ITEM 1.  
FINANCIAL STATEMENTS

# MEDIA SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

`March 31,       June 30,
                                                                      2003           2002
                                 ASSETS                           (Unaudited)
                                 ------                           ------------    ------------

CURRENT ASSETS :
    Cash                                                          $     83,613    $     42,180
    Accounts receivable, less allowance for
       doubtful accounts of $35,000                                  2,108,844       1,257,270
    Inventories                                                      1,193,113       1,324,583
    Deferred tax asset                                               1,000,000       1,000,000
    Prepaid expenses and other current assets                           81,717          59,846
                                                                  ------------    ------------
        Total Current Assets                                         4,467,287       3,683,879

PROPERTY AND EQUIPMENT, NET                                          1,398,043       1,778,497

OTHER ASSETS:
    Goodwill and other intangible assets, net                        4,474,001       4,392,773
    Deferred income taxes                                              145,567         500,000
    Other assets                                                        60,102          57,733
                                                                  ------------    ------------
                                                                     4,679,670       4,950,506

TOTAL ASSETS                                                      $ 10,545,000    $ 10,412,882
                                                                  ============    ============

                   LIABILITIES AND SHAREHOLDERS' EQUITY
                   ------------------------------------

CURRENT LIABILITIES:
    Short-term debt                                               $  2,501,054    $  2,113,794
    Accounts payable                                                 1,679,963       2,311,790
    Accrued expenses and other current liabilities                     190,351         129,495
    Accrued product warranty                                           250,000         500,000
    Accrued expense - supplier                                         527,817         395,153
    Income taxes payable                                               102,900            --
    Dividends payable                                                  542,513         113,849
    Loan from investors                                                600,000         535,242
    Loan from officer                                                  475,000         355,000
    Deferred revenue                                                   162,985         230,297
                                                                  ------------    ------------
                                                                     7,032,583       6,684,620

OTHER LIABILITIES :
    Long-term debt, less current maturities                             53,547         194,336
    Accrued expense - supplier                                            --           330,644
                                                                  ------------    ------------
                                                                        53,547         524,980

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY :
    Common stock, .001 par value,
       Authorized 20,000,000 shares; issued 3,577,210 in March
       and 3,531,363 in June                                             3,578           3,532
    Series A convertible preferred stock, $.001 par value,
       Authorized 1,000,000 shares; issued 547,500 shares                  547             547
    Additional paid-in capital                                       5,109,343       5,065,833
    Cost of 10,564 shares of common stock in treasury                  (20,832)        (20,832)
    Retained earnings (deficit)                                     (1,633,766)     (1,845,798)
                                                                  ------------    ------------
        Total shareholders' equity                                   3,458,870       3,203,282

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                        $ 10,545,000    $ 10,412,882
                                                                  ============    ============`

See accompanying notes to consolidated financial statements.

---

# MEDIA
SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

`Three Months Ended              Nine Months Ended
                                                            March 31,                       March 31,
                                                       2003            2002            2003            2002
                                                   ------------    ------------    ------------    ------------

NET SALES                                          $  3,665,763    $  3,302,840    $ 11,178,469    $ 10,926,716
                                                   ------------    ------------    ------------    ------------

COSTS AND EXPENSES :
    Cost of goods sold, excluding depreciation        1,681,447       1,682,746       5,208,096       5,472,097
    Depreciation                                        135,750         104,618         391,945         312,373
                                                   ------------    ------------    ------------    ------------
        Total cost of goods sold                      1,817,197       1,787,364       5,600,041       5,784,470


    Selling, general and administrative expenses      1,356,297       2,714,784       3,890,148       4,743,756
    Depreciation and amortization                        65,886          80,034         203,212         241,986
                                                   ------------    ------------    ------------    ------------
        Total costs and expenses                      3,239,380       4,582,182       9,693,401      10,770,212
                                                   ------------    ------------    ------------    ------------

INCOME (LOSS) FROM OPERATIONS                           426,383      (1,279,342)      1,485,068         156,504

INTEREST EXPENSE, NET                                   101,043          89,876         341,736         311,077
                                                   ------------    ------------    ------------    ------------

INCOME (LOSS) BEFORE INCOME TAXES                       325,340      (1,369,218)      1,143,332        (154,573)

INCOME TAXES :
    Current                                              30,781             275         104,648             275
    Deferred                                            100,855        (547,688)        354,433         (61,829)
                                                   ------------    ------------    ------------    ------------
                                                        131,636        (547,413)        459,081         (61,554)
                                                   ------------    ------------    ------------    ------------

NET INCOME (LOSS)                                  $    193,704    $   (821,805)   $    684,251    $    (93,019)
                                                   ============    ============    ============    ============

PREFERRED STOCK DIVIDENDS                          $    157,406    $    157,406    $    472,219    $    472,219
                                                   ------------    ------------    ------------    ------------

INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS    $     36,298    $   (979,211)   $    212,032    $   (565,238)
                                                   ============    ============    ============    ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING :
    BASIC                                             3,577,210       3,485,516       3,561,928       3,483,599
                                                   ============    ============    ============    ============
    DILUTED                                           3,577,210            --         3,562,672            --
                                                   ============    ============    ============    ============

NET INCOME (LOSS) PER COMMON SHARE :
    BASIC                                          $       0.01    $      (0.28)   $       0.06    $      (0.16)
                                                   ============    ============    ============    ============
    DILUTED                                        $       0.01    $       --      $       0.06    $       --
                                                   ============    ============    ============    ============`

See accompanying notes to consolidated financial statements.

---

# MEDIA
SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
NINE MONTHS ENDED MARCH 31, 2003

`Common Stock       Preferred Stock   Additional               Retained        Total
                                         ------------------   ----------------     Paid-in    Treasury    Earnings     Shareholders'
                                          Shares     Amount    Shares   Amount     Capital      Stock     (Deficit)       Equity
                                         ---------   ------   -------   ------   ----------   --------   -----------   -------------

BALANCES, JUNE 30, 2002                  3,531,363    $3,532  547,500   $  547   $5,065,833   $(20,832)   $(1,845,798) $   3,203,282


PERIOD ENDED MARCH 31, 2003

  Issuance of common stock for
    dividend payment                        45,847       46        --       --       43,510         --            --          43,556
  Preferred stock dividend, 11.5%               --       --        --       --           --         --      (472,219)       (472,219)
  Net Income                                    --       --        --       --           --         --       490,548         490,548
                                         ---------   ------   -------   ------   ----------   --------   -----------   -------------

BALANCES, MARCH 31, 2003 (UNAUDITED)     3,577,210   $3,578   547,500   $  547   $5,109,343   $(20,832)  $(1,633,766)  $   3,458,870
                                         =========   ======   =======   ======   ==========   ========   ===========   =============`

See accompanying notes to consolidated financial statements.

---

# MEDIA SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

`Nine Months Ended
                                                                    March 31,
                                                                2003         2002
                                                              ---------    ---------
CASH FLOWS FROM OPERATING ACTIVITIES :
    Net Income                                                $ 684,251    $ (93,019)
    Adjustments to reconcile net Income to net cash
      flows from operating activities :
         Depreciation and amortization                          595,156      554,360
         Deferred income taxes                                  354,433      (61,829)
         Changes in operating assets and liabilities :
             Accounts receivable                               (851,574)     199,994
             Inventories                                        131,470     (220,897)
             Prepaid expenses and other current assets          (21,870)     (18,244)
             Other assets                                        (2,369)     (90,778)
             Accounts payable                                  (631,827)     216,534
             Income taxes payable                               102,900         --
             Dividends payable                                     --        (81,003)
             Accrued expenses and other current liabilities      60,856       39,987
             Accrued product warranty                          (250,000)     488,936
             Accrued expense - supplier                        (197,980)    (101,221)
             Deferred revenues                                  (67,312)     (97,728)
                                                              ---------    ---------
                 Net cash flows from operating activities       (93,866)     735,092
                                                              ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES :
    Purchases of property and equipment                        (201,321)    (267,137)
    Purchase of intangible assets                               (94,609)     (55,152)
                                                              ---------    ---------
                 Net cash flows from investing activities      (295,930)    (322,289)
                                                              ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES :
    Advances on short-term debt                                 452,018      530,813
    Payments on long-term debt                                 (140,789)    (230,681)
    Advances / (payments) from officer                          120,000      (70,000)
    Payment of UltraHue note                                       --       (234,392)
    Preferred stock dividend                                       --       (472,219)
                                                              ---------    ---------
                 Net cash flows from financing activities       431,229     (476,479)
                                                              ---------    ---------

NET CHANGE IN CASH AND EQUIVALENTS                               41,433      (63,676)

CASH AND EQUIVALENTS, BEGINNING OF YEAR                          42,180      132,144
                                                              ---------    ---------

CASH AND EQUIVALENTS, END OF YEAR                             $  83,613    $  68,468
                                                              =========    =========

SUPPLEMENTAL CASH FLOW INFORMATION :
    Interest paid                                             $ 263,838    $ 322,315
                                                              =========    =========
    Income taxes paid                                         $     998    $   6,405
                                                              =========    =========
    Issuance of common stock as dividend payment              $  43,556    $   8,482
                                                              =========    =========
    Inventories transferred to equipment                      $    --      $ 120,417
                                                              =========    =========`

See accompanying notes to consolidated financial statements.

---

# MEDIA
SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES

# NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION :

| | Our
accounting and reporting policies conform to generally accepted accounting
principles. Except for the June 30, 2002 consolidated balance sheet, the
financial statements presented herein are unaudited but reflect all adjustments
which, in our opinion, are necessary for the fair presentation of the
consolidated financial position, results of operations and cash flows for the
interim periods presented. All adjustments reflected in the interim financial
statements are of a normal recurring nature. You should read these financial
statements in conjunction with the financial statements and notes thereto and
the report of independent accountants included in our Annual Report on Form
10-KSB for the year ended June 30, 2002. The year-end balance sheet data was
derived from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. The results of operations
for the three and nine months ended March 31, 2003 are not necessarily
indicative of the results to be expected for the full year.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 2 - NATURE OF BUSINESS :

| | We
are engaged in the business of manufacturing and distributing supplies for
workgroup, or business, color printers. Our products include solid ink sticks,
color toner cartridges and other consumable items. We distribute our products
through an international network of dealers and distributors. We also sell
directly to end-users through programs designed to foster our supplies business.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 3 - LOAN FROM OFFICERS :

| | Between
August 17, 2000 and September 14, 2000, we borrowed an aggregate of $325,000
from our President, Michael W. Levin. We used the funds as bridge financing for
printers acquired for Cadapults No-Cap Color printer program. From
September 2001 through March 2002, we repaid $70,000 of these loans. In April
2002, we borrowed an additional $100,000 from Mr. Levin. These loans are
unsecured, payable on demand and bear an interest rate of 10%. These short-term
loans mature in May of 2003. In addition, in September 2002, we borrowed $95,000
from Mr. Levin. This loan matures in September of 2003 and carries a 23%
interest rate, with interest due monthly. There is no representation or
assurance made that Mr. Levin will make any further loans to us. At March 31,
2003 we accrued interest of $13,238 and at March 31, 2002 we had accrued
interest of $2,137.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2002 we borrowed $25,000 from Duncan Yates, an officer. This loan
matures in December of 2003 and carries a 23% interest rate, with interest due
monthly.  There is no
representation or assurance made that Mr. Yates will make any further loans to
us.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 4 - NOTE PAYABLE TO INVESTORS :

| | We
have a $400,000 note payable to an investor group which bears interest at 12%
per annum and is payable in quarterly installments of interest only through June
2003. Two members of this investor group are persons who bear the following
relationships with Media Sciences or with our officers and directors: Paul Baker
is a director of Media Sciences and Mitchell Baker is the son of Paul Baker.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
June 2002, we also borrowed an aggregate of $175,000 from several individuals.
The notes matured in December 2002 and bore simple interest at the rate of 12%
per year. In connection with these borrowings, we issued 87,500 detachable
warrants that were valued at $43,372, which resulted in the recording of a
discount on debt. The discount was amortized through December 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# MEDIA
SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES

# NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

| | In
December 2002, we repaid the $175,000 borrowed in June through cash principal
payments of $75,000 and through the issuance of new, one-year notes aggregating
$100,000 and bearing simple interest of 20%, payable quarterly.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Three
of the four new note holders are persons who bear the following relationships
with Media Sciences or with our officers and directors: Paul Levin is the father
of Michael W. Levin, President and Chairman of Media Sciences; Frank and Edna
Blanco are the parents of Frances Blanco, Vice President and a director of Media
Sciences; and Mitchell Baker is the son of Paul Baker, a director of Media
Sciences. Each of Michael W. Levin, Frances Blanco, and Paul Baker disclaims
beneficial ownership of these notes.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
October 2002, we borrowed $100,000 from Paul Baker, a director of Media
Sciences. This loan matures in October of 2003 and carries a 23% interest rate,
with interest due monthly.   There is no representation or assurance made that Mr. Baker will make any further loans to us.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5 - NOTE PAYABLE TO BANK :

| | We
have an agreement with a lender under which we can borrow up to $4,000,000 under
a revolving line of credit, subject to availability of collateral. Borrowings
bear interest at 1.25% over the lenders base rate, are payable on demand
and are collateralized by all assets of the company. We are also required to pay
an unused facility fee of 0.25% per annum, payable monthly. As of March 31,
2003, $2,018,837 was outstanding under this line. Our agreement with the lender
for this revolving line of credit terminates on April 30, 2003. We are in
discussions with our current lender and several other potential lenders about a
new credit facility. While we believe that we will be able to secure a new
credit facility, there can be no assurance of that at this time, nor can there
be assurances that any new facility would be on essentially the same terms and
conditions as our existing facility.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 6 - DIVIDENDS :

| | In
June 2002, our Board of Directors voted to offer preferred shareholders the
option to receive payment in kind for the dividend periods ending June 30, 2002
and September 30, 2002 in order to conserve cash flow, through a common stock
issuance at $0.95 per share, the fair market value of our common stock on that
date. Fourteen shareholders elected to receive their dividend payments through
the payment-in-kind, totaling $87,112 and consisting of 91,694 shares of common
stock for the two periods ending June 30, 2002 and September 30, 2002, of which
45,847 shares were issued as of June 30, 2002 and 45,847 shares were issued as of September 30, 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2002, our Board of Directors voted to defer payment of the preferred
stock dividends through the periods ending September 30, 2003. Our Board voted
to accrue 6% simple interest on the deferred dividends, to be paid upon payment
of the deferred dividends.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# MEDIA
SCIENCES INTERNATIONAL, INC. AND SUBSIDIARIES

# NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - EARNINGS (LOSS) PER SHARE :

| | Basic
earnings per share is computed using the weighted average number of shares
outstanding. Diluted earnings per common share is computed using the weighted
average number of shares outstanding adjusted for the incremental shares
attributed to outstanding options and warrants to purchase common stock, and
other potentially dilutive securities.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The following table sets forth the computation of basic and diluted earnings per share :
| | ----------------------------------------------------------------------------------------

`Three Months               Nine Months
                                                                        Ended                     Ended
                                                                      March 31,                 March 31,
                                                                  2003         2002         2003         2002
                                                               ----------   ---------   -----------   -----------

Numerator :
    Income (loss) applicable to common  shareholders - basic   $   36,298   $(979,211)  $   212,032   $  (565,238)
                                                               ==========   =========   ===========   ===========
    Income (loss) applicable to common shareholders - diluted  $   36,298        --     $   212,032          --
                                                               ==========   =========   ===========   ===========

Denominator :
    Denominator for basic earnings per share :
        Weighted average shares                                 3,577,210   3,485,516     3,561,928     3,483,599
                                                               ----------   ---------   -----------   -----------

    Effect of dilutive securities
        Conversion of preferred stock to  common                     --          --            --            --
        Stock options and warrants                                   --          --             744          --
                                                               ----------   ---------   -----------   -----------
    Denominator for diluted earnings per share                  3,577,210   3,485,516     3,562,672     3,483,599
                                                               ==========   =========   ===========   ===========

    Earnings (loss) per share :
        Basic                                                  $     0.01   $   (0.28)  $      0.06   $     (0.16)
                                                               ==========   =========   ===========   ===========
        Diluted                                                $     0.01        --     $      0.06          --
                                                               ==========   =========   ===========   ===========`

| | The
conversion of the class A convertible preferred stock has been excluded from the
computation of diluted earnings per share for the three months and nine months
ended March 31, 2003. Such conversion, when taking into account the additional
net income generated by the elimination of the dividend, would have been
anti-dilutive.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following warrants to purchase common stock were excluded from the computation
of diluted earnings per share for the three months and nine months ended March
31, 2003 because the warrants exercise price was greater than the average
market price of the common stock for those periods:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Three Months               Nine Months
                                                                  Ended                     Ended
                                                                March 31,                 March 31,
                                                            2003         2002         2003         2002
                                                         ----------   ---------   -----------   -----------

          Anti-dilutive warrants and options              3,388,979        --       3,388,235         --
                                                         ==========   =========   ===========   ===========`

NOTE 8 - RECLASSIFICATION :

| | Certain amounts previously
reported have been reclassified to conform to current year presentation.
| | ---------------------------------------------------------------------------------------------------

---

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

You should read the
following discussion and analysis in conjunction with the information set forth
in the unaudited financial statements and notes thereto, included elsewhere
herein, and the audited financial statements and the notes thereto, included in
our Form 10-KSB filed October 15, 2002.

## Results of
Operations

## For the Three and Nine Months Ended March 31, 2003 and 2002

Sales. Our consolidated sales for the three months ended March 31, 2003 compared to the same period in 2002,
increased approximately 11% to $3,665,763 from $3,302,840.  Our consolidated sales for the nine months ended
March 31, 2003 compared to the same period in 2002, increased approximately 2% to $11,178,469 from $10,926,716.
The increase in our sales for the three months can be attributed to a 14% increase in our Media Sciences color
printer supply business from the same period one year ago.  The slight increase in our sales for the nine months
can be attributed to an 8% increase in our Media Sciences color printer supply business from the same period one
year ago, offset by a reduction in our Cadapult Graphic Systems legacy reseller business.

Cost of Sales. Our cost of
sales for the three months ended March 31, 2003 were $1,681,447, or
approximately 46% of sales, as compared to $1,682,746, or approximately 51% of
sales for the comparable period in 2002. Our cost of sales for the nine months
ended March 31, 2003 was $5,208,096, or approximately 47% of sales, as compared
to $5,472,097, or approximately 50% of sales for the comparable period in 2002.
The decrease in our cost of sales can be attributed to the continued growth of
the higher margin business generated by our Media Sciences subsidiary. Further,
during the three months ended December 31, 2002, we incurred approximately
$100,000 in incremental inbound shipping expenses, due to the west coast dock
strike and slowdown. We have not incurred those
additional shipping expenses in the three months ended March 31, 2003, and we do
not anticipate incurring those additional shipping expenses in the foreseeable
future. Certain direct and indirect manufacturing costs previously reported as
selling, general and administrative costs for the three and nine months ended
March 31, 2002 have been reclassified to conform to the current year's
presentation where these costs are now classified as cost of sales.
Approximately $177,000 for the three months ended March 31, 2002 and $477,000
for the nine months ended March 31, 2002 were reclassified as cost of sales.

Selling, General and
Administrative. For the nine months ended March 31, 2003, as compared to the
same period in 2002, our selling, general and administrative expenses decreased
to $1,356,297 from $2,714,784, which represents a decrease to 37% of sales from
82% of sales. For the nine months ended March 31, 2003, as compared to the same
period in 2002, our selling, general and administrative expenses decreased to
$3,890,148 from $4,743,756, which represents a decrease to 35% of sales from 43%
of sales. We continue to incur certain warranty expenses associated with the
recall of our solid inks in January of 2002. However, the claim rates have
dropped substantially over the last several months and we expect them to
continue to subside. We evaluate and adjust our warranty accrual quarterly,
based on managements experience and expectation of future claims. During
the nine months ended March 31, 2002, we settled a legal malpractice suit and
recorded a one-time benefit of approximately $600,000, and incurred
approximately $2.6 million in recall and warranty expenses.

Depreciation and
Amortization. For the three months ended March 31, 2003, as compared to the same
period in 2002, our depreciation expense increased to $201,636 from $184,652 as
a result of the depreciation of capital leases and equipment purchases during
the last year. Amortization of intangibles was $3,153 for the three months ended
March 31, 2003 and $2,267 for the same period in 2002. For the nine months ended
March 31, 2003, as compared to the same period in 2002, our depreciation expense
increased to $595,157 from $554,359 as a result of the depreciation of capital
leases and equipment purchases during the last year. Amortization of intangibles
was $12,985 for the nine months ended March 31, 2003 and $6,901 for the same
period in 2002.

Interest Expense. For the
three months ended March 31, 2003, as compared to the same period in 2002, our
interest expense increased to $101,043 from $89,876. For the nine months ended
March 31, 2003, as compared to the same period in 2002, our interest expense
increased to $341,736 from $311,077. The increases in interest expense are a
result of the interest component of the accrued supplier agreement, capital
leases and other increased borrowings.

---

Income Taxes. For the three
months ended March 31, 2003, we recorded a current income tax expense of $30,781
and a deferred income tax expense of $100,855 as compared to a current income
tax expense of $275 and a deferred income tax benefit of $547,688 in 2002. For
the nine months ended March 31, 2003, we recorded a current income tax expense
of $104,648 and a deferred income tax expense of $354,433 as compared to a
current income tax expense of $275 and a deferred income tax benefit of $61,829
in 2002. For the three and nine months ended March 31, 2003, we recorded the
current income tax expense because of New Jerseys two-year suspension of the
use of net operating loss carry forwards.

Dividends.  For the three months ending March 31, 2003, we accrued $157,407 of stock dividends to our preferred
shareholders.  For the nine months ended March 31, 2003, we accrued $428,663 of stock dividends to our preferred
shareholders and paid $43,556 in stock dividends through a common stock issuance at $0.95 per share as discussed
in Note 6 above.

Net Income. For the three
month period ended March 31, 2003, we earned $36,298, or $0.01 per share basic
and diluted, as compared to a loss of $979,211, or $(0.28) per share, for the
corresponding three month period ended March 31, 2002. For the nine month period
ended March 31, 2003, we earned $212,032, or $0.06 per share basic and diluted,
as compared to a loss of $565,238, or $(0.16) per share, for the corresponding
nine month period ended March 31, 2002.

## Liquidity and
Capital Resources

We experienced positive
cash flow of $41,434 for the nine months ended March 31, 2003. Cash generated by
operations resulted in negative cash flows of $93,866 primarily due to net
income of $684,251, a non-cash charge of $595,156 for depreciation and
amortization and $354,433 for deferred income taxes, a reduction in inventory of
$131,470, and an increase in income taxes payable of $102,900, offset by an
increase in accounts receivable of $851,574, a decrease in accounts payable of
$631,827, and a decrease of $478,675 in accrued expenses and other liabilities.

The cash we used in
investing activities included the purchase of equipment in the amount of
$201,321 and the purchase of intangible assets generated by the ultraHue
earn-out in the amount of $94,609. The ultraHue earn-out has been concluded as
of December 13, 2002 and there will be no further purchase of intangibles
associated with this acquisition.

Cash generated by financing
activities included proceeds from short-term debt of $452,018, advances from
officers of $120,000 offset by the repayment of $140,789 of long-term debt. We
have an agreement with a lender under which we can borrow up to $4,000,000 under
a revolving line of credit, subject to availability of collateral. Borrowings
bear interest at 1.25% over the lenders base rate, are payable on demand
and are collateralized by all assets of the company. We are also required to pay
an unused facility fee of 0.25% per annum, payable monthly. As of March 31,
2003, $2,018,837 was outstanding under this line. Our agreement with the lender
for this revolving line of credit terminates on April 30, 2003. We are in
discussions with our current lender and several other potential lenders about a
new credit facility. While we believe that we will be able to secure a new
credit facility, there can be no assurance of that at this time, nor can there
be assurances that any new facility would be on essentially the same terms and
conditions as our existing facility.

In June 2002, we borrowed
an aggregate of $175,000 from several individuals. The notes matured in December
2002 and bore simple interest at the rate of 12% per year. In December 2002, we
repaid the $175,000 borrowed in June through cash principal payments of $75,000
and through the issuance of new, one-year notes aggregating $100,000 and bearing
simple interest of 20%, payable quarterly. Three of the four new note holders
are persons who bear the following relationships with Media Sciences or with our
officers and directors: Paul Levin is the father of Michael W. Levin, President
and Chairman of Media Sciences; Frank and Edna Blanco are the parents of Frances
Blanco, Vice President and a director of Media Sciences; and Mitchell Baker is
the son of Paul Baker, a director of Media Sciences.

---

Between August 17, 2000 and
September 14, 2000, we borrowed an aggregate of $325,000 from our President,
Michael W. Levin. We used the funds as bridge financing for printers acquired
for Cadapults No-Cap Color printer program. From September 2001 through
March 2002, we repaid $70,000 of these loans. In April 2002, we borrowed an
additional $100,000 from the President. These loans are unsecured, payable on
demand and bear an interest rate of 10%. These short-term loans mature in May of
2004. In addition, in September 2002, we borrowed $95,000 from Mr. Levin. This
loan matures in September of 2003 and carries a 23% interest rate, with interest
due monthly.

In October 2002, we
borrowed $100,000 from Paul Baker, a director of Media Sciences. This loan
matures in October of 2003 and carries a 23% interest rate, with interest due
monthly.

In December 2000, the note
payable to ultraHue came due and was satisfied with a cash payment of $760,000
and a six-month term note in the amount of $400,000, and bearing an interest
rate of 13% per annum. Under this note, $250,000 is currently outstanding.

In December 2002, we
borrowed $25,000 from Duncan Yates, an officer. This loan matures in December of
2003 and carries a 23% interest rate, with interest due monthly.

The terms of these loans
borrowed from the Companys officers, directors, and others having
relationships with our officers and directors were determined by the Board of
Directors in light of the Companys financial condition, the terms of
previous borrowings from such persons, and the terms on which short-term loans
were available from public resources. The terms of these loans were deemed fair
to the Company and viewed as arms length transactions. There are no
ongoing contractual or other commitments with any of these persons resulting
from these transactions, and there is no representation or assurances made that
any of these persons will make any further loans to us.

## Inflation

We have historically offset
any inflation in operating costs by a combination of increased productivity and
price increases, where appropriate. We do not expect inflation to have a
significant impact on its business in the future.

## Seasonality

We anticipate that our cash
flow from operations will be slightly better in the fall and winter months than
in the spring and summer months due to the sales cycles associated with our
legacy business. In the event that we are unable to generate sufficient cash
flows from operations, we may be required to utilize other cash reserves, if
any, or seek additional equity or debt financing to meet operating expenses, and
there can be no assurance that there will be any other cash reserves or that
additional financing will be available or, if available, on reasonable terms.

## Forward-Looking Statements

The foregoing management
discussion and analysis contains forward-looking statements and information that
are based on our managements beliefs, as well as assumptions made by, and
information currently available to our management. These forward-looking
statements are based on many assumptions and factors, and are subject to many
conditions, including the our continuing ability to obtain additional financing,
dependence on contracts with suppliers, competitive pricing for our products,
demand for our products which depends upon the condition of the computer
industry, and the effects of increased indebtedness as a result of our business
acquisitions. Except for the historical information contained in this new
release, all forward-looking information are estimates by our management and are
subject to various risks, uncertainties and other factors that may be beyond the
our control and may cause results to differ from our managements current
expectations, which may cause our actual results, performance or achievements to
be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements.

---

## ITEM 3.  
CONTROLS AND PROCEDURES

(a)  Evaluation of Controls and Procedures

Within 90 days prior to the
filing of this report, under the supervision and with the participation of the
companys management, including the companys Chief Executive Officer,
Vice President of Operations, and Controller, an evaluation of the effectiveness
of our disclosure controls and procedures was performed. Based on this
evaluation, the Chief Executive Officer, Vice President of Operations, and
Controller have concluded that our disclosure controls and procedures are
effective to ensure that material information is recorded, processed, summarized
and reported by management of the company on a timely basis in order to comply
with the companys disclosure obligations under the Securities Exchange Act
of 1934 and the SEC rules thereunder.

(b)  Changes in Internal Controls

There were no significant
changes in the companys internal controls or in other factors that could
significantly affect these controls subsequent to the date of the evaluation.

---

# PART II.  
OTHER INFORMATION

## ITEM 2.  
CHANGES IN SECURITIES

In March 2000, we completed
a private placement of 550,000 units of our securities and raised gross proceeds
of approximately $5,500,000 in transactions deemed to be exempt under Section
4(2) of the Securities Act and under Rule 506 of Regulation D promulgated under
the Securities Act. Each purchaser represented to us that the purchaser was an
accredited person who had financial, tax and business sophistication to evaluate
the merits and risks of the investment and agreed that the purchaser has no
right to demand that the units be registered. We made a determination that each
purchaser was an accredited investor and that each purchaser was a sophisticated
investor with enough knowledge and experience in business to evaluate the risks
and merits of the investment. Each unit consisted of one share of convertible
preferred stock and warrants to purchase two shares of common stock. The
preferred stock has rights to quarterly dividends of 11.5%. In December 2002,
our Board of Directors voted to defer payment of the preferred stock dividends
through the periods ending September 30, 2003. Our Board voted to accrue 6%
simple interest on the deferred dividends, to be paid upon payment of the
deferred dividends.

## ITEM 6.  
EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits.

The following exhibits are filed with this report:

|Exhibit 11 | Statement Concerning Computation of Per Share Earnings is hereby incorporated
by reference to Financial Statements of Part I - Financial
Information, Item 1  Financial Statements, contained in this Form 10-QSB.
|---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Exhibit 99 | Certifications
|---------- | --------------

(b)        Reports on Form 8-K.

Not applicable.

---

# SIGNATURES

In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | MEDIA SCIENCES INTERNATIONAL, INC.
| | ----------------------------------

|Dated:  May 7, 2003 | By:/s/ Michael W. Levin
      Michael W. Levin
      Chief Executive Officer and President
|------------------- | ------------------------------------------------------------------------------------------

|Dated:  May 7, 2003 | By:/s/ Duncan Huyler
      Duncan Huyler
      Vice President of Operations
|------------------- | ---------------------------------------------------------------------------

|Dated:  May 7, 2003 | By:/s/ Denise Hawkins
      Denise Hawkins
      Vice President and Controller
|------------------- | ------------------------------------------------------------------------------

---

# CERTIFICATIONS

I, Michael W. Levin, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of Media Sciences International, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a)       designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

b)       evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)       presented in this quarterly report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a)       all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this quarterly report whether there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date:  May 7, 2003

| | /s/ Michael W. Levin
Michael W. Levin
Chief Executive Officer
| | -------------------------------------------------------------

---

I, Duncan Huyler, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of Media Sciences International, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a)       designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

b)       evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)       presented in this quarterly report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a)       all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this quarterly report whether there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date:  May 7, 2003

| | /s/ Duncan Huyler
Duncan Huyler
Vice President of Operations
| | ------------------------------------------------------------

---

I, Denise Hawkins, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of Media Sciences International, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a)       designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

b)       evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)       presented in this quarterly report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a)       all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this quarterly report whether there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date:  May 7, 2003

| | /s/ Denise Hawkins
Denise Hawkins
Vice President and Controller
| | ---------------------------------------------------------------

---