SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549

                           FORM 10-KSB

       [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

           For the fiscal year ended FEBRUARY 28, 2005

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

                 Commission file number 0-28887

                          EPOLIN, INC.
         (Name of Small Business Issuer in Its Charter)

New Jersey                                             22-2547226
(State or other jurisdiction                     (I.R.S. Employer
of incorporation or                                Identification
organization)                                             Number)

358-364 Adams Street
Newark, New Jersey                                          07105
(Address of principal                                  (Zip Code)
executive offices)

 Issuer's telephone number, including area code:  (973) 465-9495

 Securities registered under Section 12(b) of the Exchange Act:
                              None

Securities registered under Section 12(g) of the Exchange Act:
                  Common Stock (no par value)

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 past 90 days.

                    Yes [ X ]      No  [    ]

Check  if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B  not contained in this form, and no
disclosure  will  be  contained,  to  the  best  of  Registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-KSB or  any
amendment to this Form 10-KSB. [  ]

State Issuer's revenues for its most    recent    fiscal    year:
                          $2,880,100

As  of  May  10, 2005, the aggregate market value of  the  Common
Stock held by non-affiliates of the Issuer (8,287,310 shares) was
approximately  $4,558,000.  The number of shares  outstanding  of
the Common Stock (no par value) of the Issuer as of the close  of
business on May 10, 2005 was 11,815,355.

           Documents Incorporated by Reference:  None

Transitional Small Business Disclosure Format: Yes [  ]  No [ X ]

<PAGE>

                          EPOLIN, INC.

                        TABLE OF CONTENTS



                             PART I
                                                         Page

Item 1.        Description of Business                      3

Item 2.        Description of Property                     10

Item 3.        Legal Proceedings                           10

Item 4.        Submission of Matters to a Vote of
               Security-Holders                            10


                             PART II

Item 5.        Market for Common Equity and
               Related Stockholder Matters                 10

Item 6.        Management's Discussion and Analysis or
               Plan of Operation                           12

Item 7.        Financial Statements                        17

Item 8.        Changes in and Disagreements with
               Accountants on Accounting
               and Financial Disclosure                    17

Item 8A.       Controls and Procedures                     17

Item 8B.       Other Information                           17


                            PART III

Item 9.        Directors, Executive Officers, Promoters
               and Control Persons; Compliance with
               Section 16(a) of the Exchange Act           17

Item 10.       Executive Compensation                      19

Item 11.       Security Ownership of Certain
               Beneficial Owners and Management
               and Related Stockholder Matters             22

Item 12.       Certain Relationships and Related
               Transactions                                23

Item 13.       Exhibits                                    23

Item 14.       Principal Accountant Fees and Services      24

               Signatures                                  25


<PAGE>



                   Forward-Looking Statements

      This report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs
and  assumptions  made  by the Company's management  as  well  as
information currently available to the management.  When used  in
this document, the words "anticipate", "believe", "estimate", and
"expect"  and  similar  expressions,  are  intended  to  identify
forward-looking statements.  Such statements reflect the  current
views  of  the  Company  with respect to future  events  and  are
subject to certain risks, uncertainties and assumptions.   Should
one  or  more  of  these risks or uncertainties  materialize,  or
should underlying assumptions prove incorrect, actual results may
vary  materially  from  those described  herein  as  anticipated,
believed,  estimated or expected.  Certain  of  these  risks  and
uncertainties  are  discussed in this report  under  the  caption
"Uncertainties  and Risk Factors" in Part I, Item 1  "Description
of  Business".   The  Company does not  intend  to  update  these
forward-looking statements.


                             PART I

Item 1.        Description of Business.

Introduction

       Epolin,  Inc.  ("Epolin"  or  the  "Company"),  which  was
incorporated  in  the  State of New Jersey  in  May  1984,  is  a
specialized   chemical   company   primarily   engaged   in   the
manufacturing, marketing, research and development  of  dyes  and
dye  formulations.   The Company's business is  heavily  weighted
towards  the  development, manufacture and sale of near  infrared
dyes.  Its principal offices are located at 358-364 Adams Street,
Newark,  New Jersey 07105 and its telephone number is (973)  465-
9495.  The Company's web-site can be accessed at www.epolin.com.

      The Company's wholly-owned subsidiary, Epolin Holding Corp.
("Epolin  Holding"), was incorporated in the State of New  Jersey
as a real estate holding company.  Epolin Holding became a wholly-
owned subsidiary in January 1998.

      Following  completion of the Company's public  offering  in
1989,  the  Company's  revenues  were  then  primarily  generated
through  the  synthesis  and sale of specialty  organic  chemical
products. Building upon this base, the Company singled  out  near
infrared  dye  technology as a most promising  product  line  and
since  1991 has emphasized the development, manufacture and  sale
of these dyes.

      Paralleling  the  growth of the dye business,  the  Company
maintains  a level of production and sales of specialty  products
made  on  a  custom basis. These include additives for  plastics,
thermochromic  materials  for use in  paints  as  well  as  other
specialty  chemicals made in low volume to sell  at  prices  that
reflect  the  value  of  the product.  However,  unlike  the  dye
business,  the  Company  does not expect its  specialty  chemical
business to grow.

     Unless the context otherwise requires, all references herein
to  the  "Company"  refer to Epolin, Inc.  and  its  consolidated
subsidiary, Epolin Holding Corp.

Infrared Dyes

      To management's knowledge, and based upon its review of the
web sites of the Company's known competition, management believes
that the Company has one of the most extensive assortment of near
infrared  ("NIR") dyes in the world by offering  the  customer  a
varied  assortment  of dyes absorbing in the NIR  region  of  the
spectrum (from 700 to 1600NM).  Nevertheless, the Company is  not
aware  of  any  statistical  evidence available  to  support  its
belief  regarding its position in the industry.    The  dyes  are
sold as pure, crystalline, powders or as formulations or mixtures
of dyes.  Applications for these dyes cover several markets which
are discussed in the following subsections.

<PAGE>

     Dyes for Laser Protection

      The  Company  has  sold near infrared dyes  since  1990  to
customers  who manufacture and sell eyewear to protect  personnel
from  the harmful effects of laser light. In the first stages  of
the Company's marketing efforts, the Company sold dyes that had a
special  capability to absorb the emissions of the  neodynium-YAG
laser.  This  laser  was and is used by the  military  for  range
finders  carried  by  tanks. Following the Company's  success  in
selling  dyes  for  military usage, new  markets  were  developed
selling  to  manufacturers of safety eyewear  for  personnel  who
worked  with  lasers or were exposed to very strong   sources  of
infrared  radiation.

     Dyes for Welding

      The Company sells dyes into a market that requires the  use
of  absorptive  dyes  for face shields, helmets  and  goggles  to
protect  personnel  from the harmful effects  of  radiation  from
welding.  Nationally  prescribed specifications  now  state  that
welding  shields  must  absorb specific levels  of  the  infrared
generated  by the welding arc in order to protect personnel  from
eye  damage. The specifications have come about because a  number
of  studies had shown that excessive infrared radiation can cause
the  development of premature cataracts and possibility of damage
to  the  retina.  Thus,  for different levels  of  protection,  a
specific reduction of ultraviolet, visible and infrared emissions
are  now required. As a result, the Company now offers a line  of
dyes  for  welding   that   absorb the entire  range  of  welding
radiation.   Management  believes  many  welding  customers   and
potential  customers are attracted to the Company's dyes  because
they  had been tied to dye suppliers who would only sell the dyes
if   the  customer  were  to  purchase  the  suppliers  resin  or
formulated resin. Freedom to formulate any resin and do in  plant
injection  molding  of  lenses or shields, has  significant  cost
implications  for  these  customers.  The  availability  of   the
Company's  dyes  has allowed the Company to gain  new  customers.
Management expects to see this welding market grow in the  future
not  only because of increased sensitivity to the health  effects
of   conventional  welding  methods  but  also  because  of   the
increasing  use  of  lasers for welding. These  instruments  will
require  closer  monitoring for exposure of  personnel  to  laser
light  but will also require personnel peripheral to the  welding
operation to be protected.

     Dyes for Security Inks

      The  Company has recently formulated NIR dyes into security
inks,  which  absorb  very little of the  visible  spectrum,  and
therefore  cannot be detected at low concentrations in  inks  and
paints.   However,  they can be viewed with a mechanical  reader,
and  can therefore be deployed to verify authenticity in food and
pharmaceutical  labels,  official documents,  and  credit  cards.
Commercialization of this segment has to date been in the area of
silk screen inks for credit card manufacturing.  Currency marking
may  be possible with the development of new formulations for jet
and  water  soluble  inks.  The Company  is  also  exploring  the
possibility  of  manufacturing and selling anti-Stokes  materials
for  similar applications.  These materials are not NIR dyes, but
have a high demand for security tagants.  Reliable supply sources
will  need  to be established to aggressively pursue this  market
opportunity.

     Dyes for Specialty Filters

      Management believes a market exists for filters that  block
certain  frequencies in the near infrared and  visible  spectrum.
Most  of the inquiries in this market come from instrument makers
who use glass filters containing rare earth oxides. These filters
are  expensive and are subject to chipping, shattering and  other
breakage.  Management believes the use of a clear plastic  filter
containing  the  Company's dyes would  lower  cost  and  increase
reliability. This market is under development.  No assurance  can
be  given  that the Company will be able to successfully  develop
this market.

<PAGE>

     Dyes for Sun Protection

      Premium-priced lenses that protect the human eye  from  NIR
from  the  sun  has  not  been an active market,  but  remains  a
potential market for the Company's dyes.  Studies of the  effects
of  NIR from the sun on the human eye may bring attention to this
market in the future.

     Dyes for Heat Shields

     A potentially large market is thought to exist for a NIR dye
that  could  block  the  heat from solar  radiation  while  still
allowing   for  high  visibility,  such  as  in  sun   roofs   on
automobiles.   The Company has set its sights on  this  potential
market by initiating research and development studies leading  to
dyes  or  dye  combinations that can meet the tight  requirements
demanded  by this market.  Management believes that a formulation
capable of withstanding deterioration from the sun over a  useful
life  of  at least seven years would be commercially viable,  but
has  proven elusive.  The Company is studying methods to  improve
performance  under direct sunlight.  No assurance can  be  given,
however,   that  the  foregoing  can  be  demonstrated,   or   if
demonstrated,  that  the  Company will be  able  to  successfully
develop this market.

     Dyes for Interlayer and Laminates

      Laminated glass structures, with an interlayer of NIR dyes,
may  perform  similar  functions  as  the  plastic  heat  shields
described   above,   with  the  additional  property   of   being
shatterproof  for potential automotive applications.   Management
believes that stability over a longer useful life is required  to
make these applications commercially viable.  No assurance can be
given that the Company will be able to successfully develop  this
market.

Specialty Chemical Products

      Although  the Company is heavily engaged in the manufacture
and  sale  of dyes, the Company continues to maintain a level  of
production  and  sales of specialty products  made  on  a  custom
basis. Such specialty chemical business, which does not represent
greater  than  10% of reported profits or losses of the  Company,
involves  the  preparation and sale of  a  variety  of  specialty
chemical  products  on behalf of companies  that  sell  into  the
adhesives,  plastics, aerospace, pharmaceutical and  flavors  and
fragrance industries.  The Company's products primarily serve  as
intermediates,  additives and process aids for  complex  chemical
formulations. The Company markets its products to other companies
who are in need of low level quantities of unique chemicals which
provide  specialized  functions and  are  necessary  elements  in
complex   chemical   mixtures  manufactured  by   the   Company's
respective customers.  The Company sustains this business because
its  customers  find it economically inefficient  to  manufacture
such  low  volume  specialty chemicals for  their  own  use.  Raw
materials   utilized  in  connection  with  the  preparation   of
specialty  chemical products are either available  from  chemical
suppliers or made by the Company in its own facilities.

      This  part of the Company's business is manufactured on  an
individual  basis  to  meet  each  customers  respective   needs.
Presently,  the Company provides products used as  components  in
plastics,  process  aids,  adhesives and  coatings,  flavors  and
odorant   mixtures,  pharmaceutical  and  medical  products   and
aerospace materials.

Effect of Compliance with Government Regulation

      Manufacturers of chemical products are subject to extensive
Federal and State environmental regulations. Although the Company
believes  that its manufacturing processes do not result  in  the
emission of volatile organic vapors into the atmosphere, and that
the  Company  is  not  in  violation  of  any  State  or  Federal
environmental regulations, the Company is required to comply with
such  regulations  with  respect to manufacture,  storage  and/or
disposal of toxic materials. To the Company's knowledge, it is in
compliance with present regulations.  However, no assurances  can
be  given that future regulations will not be adopted, compliance
with  which will result in substantial expense to, and  otherwise
adversely

<PAGE>

affect the Company's business. In addition, the Company
is  subject  to the State of New Jersey Industrial Site  Recovery
Act (ISRA), which, among other requirements, requires the Company
to  obtain  prior  approval before relocating its  facilities  or
consummating  a  transaction that would result  in  a  change  in
control  of the Company. The Company's facilities are subject  to
inspection  to  ascertain whether the Company has  complied  with
State  environmental regulations.  While the Company believes  it
has  complied  with such regulations, there can be  no  assurance
that the Company will not be required to incur expenses to remedy
any  future  environmental  violations  discovered.  The  Company
registers  all  new  and  proprietary  products  with  the  Toxic
Substances Control Agency (TSCA) which is required in  order  for
the  Company  to  offer  for sale any new chemical  product.   No
assurances can be given that such registrations will be  approved
for any new product.

      During  each  of  the  years ended February  28,  2005  and
February 29, 2004, the Company expended approximately $18,000 for
compliance with environmental laws.  Actual costs to be  incurred
in  future  periods  may  vary from the  foregoing  costs,  given
inherent  uncertainties  in evaluating  environmental  exposures.
Subject  to  the  imprecision in estimating future  environmental
costs,  the Company does not expect that any sum it may  have  to
pay  in  connection  with  environmental  matters  would  have  a
materially  adverse effect on its financial condition or  results
of operations in any one year.

Sources and Availability of Raw Materials

      The Company purchases chemicals from several large chemical
manufacturers and then further processes them into  its  saleable
products.   Although the Company limits itself  to  a  relatively
small  number  of  suppliers,  it  is  not  restricted  to   such
suppliers, and Management believes the availability to  such  raw
materials is widespread. During the year ended February 28, 2005,
no   significant  difficulties  were  encountered  in   obtaining
adequate supplies of  raw materials.

Research and Development

      The  Company has made a commitment of resources to research
and development for new dyes and for improvement of the Company's
capability  to  provide technical services to its dye  customers.
New  applications are pursued by a Director of Research under the
direction of Dr. Cohen.  Several programs for near infrared  dyes
are   in   various  stages  of  commercialization,  as  generally
described  above.  The Company's website is a constant source  of
new  development ideas, as the scientific community is  aware  of
the Company's expertise in the field of NIR dyes.

     New  applications  under development are  in  the  following
general  markets:  credit cards, heat blocking films;  laser  eye
protection,   military  (night  vision);  document  verification,
military applications; welding and laser eye protection;  medical
devices;  tagants;  and hot melt additives.   Such  research  and
development activities are primarily undertaken with  a  specific
customer  in  mind.   Management believes that  the  practice  of
developing  new  applications  directly  for  specific  customers
reduces   the   inherent  risk  of  the  development   portfolio.
Nevertheless,  there can be no assurance that such  research  and
development activities with specific customers in mind will  lead
to  any  significant sales of such new products.  Because of  the
uncertainty  of these efforts, revenue projections and  estimated
completion  dates  are difficult to measure.   During  the  years
ended  February 28, 2005 and February 29, 2004, the amounts spent
on   research   and  development  activities  were  approximately
$408,000   and   $374,000,  respectively.    All   research   and
development costs are borne by the Company.

Competition

      Although the Company generally experiences, in management's
opinion, limited competition in all areas of its business,  other
dye  companies  exist which sell infrared dyes.  In  most  cases,
however, management believes that such other dye companies do not
offer  the broad range of dyes as offered by the Company nor  can
such  other  companies provide the level of technical service  as
provided   by  the  Company.   We  believe  that  our   extensive
assortment  of dyes, product performance, quality, technical  and
customer  support,  and price are all important  factors  in  our
competitiveness.  In the future, other

<PAGE>

companies may change their
policy  and  widen  their  offerings and expand  their  technical
service.  This will present the Company with a challenge  to  its
pricing structure and competitive position.

Technological Obsolescence

     The chemical and plastics industry is characterized by rapid
technological changes. Although the near infrared dyes that  form
the major portion of the Company's product line have been used in
protective  eyewear since 1976, the field has  proven  to  be  an
active one for other applications and the Company must anticipate
competition  to develop.  To remain competitive, the Company  has
committed  itself  to make capital investments  to  maintain  its
position as a key dye supplier in this field.  For example, there
can be no assurance that the Company's dye technology will not be
rendered  less  competitive, or obsolete, by the  development  by
others of new methods to achieve laser safety and other forms  of
eye  protection.  Furthermore, to remain competitive, the Company
may  be  required to make large, ongoing capital  investments  to
develop  and  produce  dyes at competitive prices.  There  is  no
assurance  that can be given that the funds for such  investments
will be available to the Company.

Patents and Proprietary Protection

     The Company does not rely upon patents for protection of its
dye  business.   There can be no assurance that  others  may  not
independently   develop   the  same,   similar   or   alternative
technologies   or  otherwise  obtain  access  to  the   Company's
proprietary technologies.

Sales

     A material portion of the Company's business is dependent on
certain  domestic  customers, the loss  of  which  could  have  a
material  effect on operations.  During the year  ended  February
28,  2005,  approximately 50.4% of sales were to three customers.
Two  of  these  customers, located in the Eastern United  States,
accounted for 44.0% of sales.  During the year ended February 29,
2004,  approximately 65.3% of sales were to four customers.   Two
of  these  customers,  located  in  the  Eastern  United  States,
accounted for 42.0% of sales.

Employees

      The  Company presently employees ten persons on a full time
basis.   The  Company's  employees are not represented  by  labor
unions.

Uncertainties and Risk Factors

      In  addition  to other information and financial  data  set
forth elsewhere in this report, the following risk factors should
be considered carefully in evaluating the Company.

     OPERATING RESULTS MAY FLUCTUATE.   Our operating results may
fluctuate  because  of a number of factors,  many  of  which  are
beyond  our  control.   Some of these  factors  that  affect  our
results  but which are difficult to control or predict  are:  the
reduction,  rescheduling or cancellation of orders  by  customers
whether   as  a  result  of  slowing  demand  for  our  products,
stockpiling  of  our products or otherwise; fluctuations  in  the
timing  and  amount  of customer requests for product  shipments;
fluctuations  in  product life cycles;  changes  in  the  mix  of
products that our customers buy; competitive pressures on selling
prices;  the  ability  of our customers to obtain  products  from
their other suppliers; and general economic conditions.

       DEPENDENCE   ON   KEY  CUSTOMERS.    Our   customers   are
concentrated,  so  the loss of one or more  key  customers  could
significantly reduce our revenues.  In fiscal 2005, two customers
located in the Eastern United States accounted for more than  10%
of  revenues from continuing operations.  One customer  accounted
for  24.1% of sales of which 14.1% was near infrared dyes and 10%
was  security  inks.

<PAGE>

The other customer accounted for  19.9%  of
sales  of near infrared dyes.  The loss of any of these customers
could have a material adverse effect on the Company.

      TECHNOLOGICAL CHANGES.  The chemical and plastics  industry
is  characterized by rapid technological changes, so our  success
depends  heavily  on  our ability to develop  and  introduce  new
products.   In this regard, the Company must make ongoing capital
investments  to  develop and produce dyes at competitive  prices.
There  is no assurance that can be given that the funds for  such
investments will continue to be available to the Company.

     COMPETITION.  Although the Company generally experiences, in
management's  opinion, limited competition in all  areas  of  its
business,   other dye companies exist which sell  infrared  dyes.
In  most cases, however, management believes that such other  dye
companies do not offer the broad range of dyes as offered by  the
Company  nor  can  such  other companies  provide  the  level  of
technical service as provided by the Company. We believe that our
extensive  assortment  of  dyes,  product  performance,  quality,
technical  and  customer  support, and price  are  all  important
factors  in our competitiveness.  In the future, other  companies
may  change  their  policy and widen their offerings  and  expand
their  technical service.  This will present the Company  with  a
challenge to its pricing structure and competitive position.

       ENVIRONMENTAL  REGULATION.   Manufacturers   of   chemical
products are subject to extensive Federal and State environmental
regulations.   While the Company believes it  has  complied  with
such regulations, there can be no assurance that the Company will
not   be   required  to  incur  expenses  to  remedy  any  future
environmental violations discovered.  In addition, no  assurances
can  be  given  that  future regulations  will  not  be  adopted,
compliance with which will result in substantial expense to,  and
otherwise adversely affect the Company's business.

      PATENTS  AND PROPRIETARY PROTECTION.  The Company does  not
rely upon patents for protection of its dye business.   There can
be  no  assurance that others may not independently  develop  the
same,  similar  or  alternative technologies or otherwise  obtain
access to the Company's proprietary technologies.

      SOURCES  AND AVAILABILITY OF RAW MATERIALS.    The  Company
purchases chemicals from several large chemical manufacturers and
then further processes them into its saleable products.  Although
the  Company  limits  itself  to a  relatively  small  number  of
suppliers, it is not restricted to such suppliers, and Management
believes  the  availability to such raw materials is  widespread.
Nevertheless,  there can be no assurance that raw materials  will
continue  to  be easily obtainable.  Any difficulty in  obtaining
raw  materials  would  have  a material  adverse  effect  on  the
Company's business.

      WE  ARE DEPENDENT ON KEY PERSONNEL.  Due to the specialized
nature  of  our  business,  our  success  depends  in  part  upon
attracting and retaining the services of qualified managerial and
technical personnel.  Murray S. Cohen, the Company's Chairman  of
the  Board  and  Chief Executive Officer, recently announced  his
intention  to  step  down  as  Chief  Executive  Officer  at   an
undetermined future date, while continuing to remain as  Chairman
of  the  Board and Chief Scientist for the Company.  No assurance
can  be  given that the Company will be able to find  a  suitable
replacement for Dr. Cohen.

      DIVIDENDS.    While the Company paid two cash dividends  in
each  of the fiscal years ended 2002, 2003 and 2004, no dividends
were  paid  in fiscal 2005.  Any future dividends will depend  on
earnings, other financial requirements and other factors, many of
which  may  be beyond the control of the Company.  See  Part  II,
Item  6,  "Management's  Discussion  and  Analysis  or  Plan   of
Operation  -  Operations  Outlook"  for  an  explanation  of  the
Company's  suspension for the time being of  the  cash  dividends
program  which  had been in place during fiscal  2002,  2003  and
2004.

     OUR STOCK PRICE MAY EXPERIENCE VOLATILITY.  The market price
of  the  Common  Stock,  which currently is  listed  in  the  OTC
Bulletin Board, has, in the past, fluctuated over time and may in
the  future be volatile.   The Company believes that there are  a
small number of market makers that

<PAGE>

make a market in the Company's
Common  Stock.  The actions of any of these market  makers  could
substantially  impact  the volatility  of  the  Company's  Common
Stock.

      POTENTIAL FUTURE SALES PURSUANT TO RULE 144.  Many  of  the
shares  of  Common Stock presently held by management and  others
are  "restricted securities" as that term is defined in Rule 144,
promulgated under the Securities Act.  Under Rule 144,  a  person
(or persons whose shares are aggregated) who has satisfied a one-
year holding period, may, under certain circumstances sell within
any  three-month period a number of shares which does not  exceed
the greater of 1% of the then outstanding shares of Common Stock,
or  the  average weekly trading volume during the  four  calendar
weeks  prior to such sale.  Rule 144 also permits, under  certain
circumstances, the sale of shares without any quantity limitation
by  a  person who is not an affiliate of the Company and who  has
satisfied  a two-year holding period.  Such holding periods  have
already  been  satisfied  in many instances.   Therefore,  actual
sales  or the prospect of sales of such shares under Rule 144  in
the future may depress the prices of the Company's securities.

      OUR  COMMON  STOCK IS A PENNY STOCK. Our  Common  Stock  is
classified as a penny Stock, which is traded on the OTCBB.  As  a
result, an investor may find it more difficult to dispose  of  or
obtain  accurate quotations as to the price of the shares of  the
Common  Stock.  In addition, the "penny stock" rules  adopted  by
the  Securities and Exchange Commission subject the sale  of  the
shares  of  the Common Stock to certain regulations which  impose
sales  practice  requirements  on broker-dealers.   For  example,
broker-dealers selling such securities must, prior  to  effecting
the  transaction, provide their customers with  a  document  that
discloses the risks of investing in such securities. Furthermore,
if  the person purchasing the securities is someone other than an
accredited  investor or an established customer  of  the  broker-
dealer,   the  broker-dealer  must  also  approve  the  potential
customer's  account  by  obtaining  information  concerning   the
customer's   financial  situation,  investment   experience   and
investment  objectives.   The  broker-dealer  must  also  make  a
determination  whether  the  transaction  is  suitable  for   the
customer  and  whether the customer has sufficient knowledge  and
experience in financial matters to be reasonably expected  to  be
capable   of  evaluating  the  risk  of  transactions   in   such
securities. Accordingly, the Commission's rules may result in the
limitation of the number of potential purchasers of the shares of
the  Common  Stock.  In addition, the additional burdens  imposed
upon  broker-dealers by such requirements may discourage  broker-
dealers  from  effecting transactions in the Common Stock,  which
could severely limit the market of the Company's Common Stock.

     LIMITATIONS  OF THE OTCBB CAN HINDER COMPLETION  OF  TRADES.
Trades and quotations on the OTCBB involve a manual process  that
may delay order processing. Price fluctuations during a delay can
result  in  the  failure of a limit order  to  execute  or  cause
execution  of  a market order at a price significantly  different
from   the   price   prevailing  when  an  order   was   entered.
Consequently, one may be unable to trade in the Company's  Common
Stock at optimum prices.

     THE  OTCBB IS VULNERABLE TO MARKET FRAUD.   OTCBB securities
are  frequent  targets  of  fraud or  market  manipulation,  both
because of their generally low prices and because OTCBB reporting
requirements are less stringent than those of the stock exchanges
or NASDAQ.

     INCREASED  DEALER COMPENSATION COULD ADVERSELY AFFECT  STOCK
PRICE.   OTCBB dealers' spreads (the difference between  the  bid
and  ask prices) may be large, causing higher purchase prices and
less sale proceeds for investors.

      Except  as  required  by the Federal  Securities  Law,  the
Company does not undertake any obligation to release publicly any
revisions to any forward-looking statements to reflect events  or
circumstances after the date of this Form 10-KSB or for any other
reason.

<PAGE>

Item 2.        Description of Property.

      The  Company presently occupies approximately 19,500 square
feet  of  manufacturing,  warehouse and administrative  space  in
Newark, New Jersey which property the Company has occupied  since
June  1989.   The property is currently owned by  Epolin  Holding
Corp.  ("Epolin  Holding"),  a  wholly-owned  subsidiary  of  the
Company.  The Company presently occupies the property pursuant to
a  lease,  effective November 1, 1996, which was for  an  initial
term of five years with three five years options with annual rent
of  $97,740  subject to annual adjustments based on increases  in
the  Consumer Price Index.  The first five year option  has  been
exercised which has extended the lease to October 31, 2006.  Such
rent includes real estate taxes and insurance expenses.

      Effective  November 1, 2002, the Company began to  sublease
approximately  2,500 square feet of its space  to  a  non-related
party  to  operate an optics and security inks laboratory  at  an
annual rent of $36,000.  Such sublease is for an initial term  of
five years with one five year option.


Item 3.   Legal Proceedings.

     There are no material pending legal proceedings to which the
Company is a party or to which any of its property is subject.



Item 4.   Submission  of  Matters to  a  Vote  of  Security
          Holders.

      No  matter was submitted during the fourth quarter  of  the
fiscal year covered by this report to a vote of security holders.




                             PART II

Item 5.   Market  for Common Equity and Related Stockholder
          Matters.

Market Information

      The Company's Common Stock is presently being traded in the
over-the-counter market under the symbol "EPLN" and is listed  on
the OTC Bulletin Board.  The following chart sets forth the range
of the high and low bid quotations for the Company's Common Stock
for  each  period  indicated.   The quotations  represent  prices
between  dealers  and  do not include retail markups,  markdowns,
commissions  or  other adjustments and may not  represent  actual
transactions.

Period                                          Bid Prices

Fiscal year ended February 28, 2005:         High         Low

March 1, 2004 to May 31, 2004                $.65         $.45
June 1, 2004 to Aug. 31, 2004                $.60         $.48
Sept. 1, 2004 to Nov. 30, 2004               $.60         $.47
Dec. 1, 2004 to Feb. 28, 2005                $.60         $.50

Fiscal year ended February 29, 2004:         High         Low

March 1, 2003 to May 31, 2003                $.70         $.52
June 1, 2003 to Aug. 31, 2003                $.55         $.43
Sept. 1, 2003 to Nov. 30, 2003               $.58         $.49
Dec. 1, 2003 to Feb. 29, 2004                $.56         $.52

<PAGE>

Holders

     As   of   May   10,  2005,  there  were  approximately   282
stockholders of record of the Company's Common Stock.  This  does
not  reflect persons or entities that hold their stock in nominee
or "street name".

Dividends

     The  Company paid two cash dividends in each of  the  fiscal
years  ended  2002,  2003 and 2004.  No dividends  were  paid  in
fiscal 2005.  Any future dividends will depend on earnings, other
financial  requirements and other factors, many of which  may  be
beyond  the  control  of  the Company.   See  Part  II,  Item  6,
"Management's  Discussion and Analysis or  Plan  of  Operation  -
Operations   Outlook"  for  an  explanation  of   the   Company's
suspension for the time being of the cash dividends program which
had been in place during fiscal 2002, 2003 and 2004.

Recent Sales of Unregistered Securities

      In  fiscal 2003, the Company issued 37,500 shares of Common
Stock  upon  exercise of previously granted stock options  at  an
aggregate exercise price of $9,375.  In fiscal 2004, the  Company
issued 137,500 shares of Common Stock upon exercise of previously
granted  stock options at an aggregate exercise price of $29,375,
and  in  fiscal 2005, the Company issued 25,000 shares of  Common
Stock  upon  exercise of previously granted stock options  at  an
aggregate exercise price of $6,250.

     In   addition,  in  fiscal  2003,  the  Company  granted  an
aggregate of 25,000 stock options exercisable at $.30 per  share;
in fiscal 2004, the Company granted an aggregate of 162,000 stock
options  exercisable at $.35 per share; and, in fiscal 2005,  the
Company granted an aggregate of 100,000 stock options exercisable
at  $.51 per share.  All of such stock options expire five or ten
years  after the date granted and are subject to various  vesting
periods.

     All  of  such  securities were issued in reliance  upon  the
exemption  from  registration pursuant to  Section  4(2)  of  the
Securities  Act  of  1933, as amended, for "transactions  by  the
issuer not involving any public offering".

Equity Compensation Plan Information


                      Number of securities
                      to be issued upon       Weighted-average
                      exercise of             exercise price of
                      outstanding options,    outstanding options,
Plan category         warrants and rights (a) warrants and rights (b)

Equity compensation
plans approved by
security holders                -0-               -0-

Equity compensation
plans not approved
by security holders         422,000              $0.35

Total                       422,000              $0.35


                         Number of securities
                         remaining available for
                         future issuance under
                         equity compensation plans
                         (excluding securities reflected
Plan category            in column (a)) (c)

Equity compensation
plans approved by
security holders                  -0-

Equity compensation
plans not approved
by security holders             458,000

Total                           458,000


      The  foregoing equity compensation plan information relates
to the stock options granted under the 1998 Stock Option Plan, as
well  as  the  stock option granted outside of the plan  to  Greg
Amato.   See  Part  III,  Item 10, "Stock  Option  Plans"  for  a
description  of  the material features of the plan,  as  well  as
"Other  Stock Option Arrangements" for information of  the  stock
option granted to Mr. Amato.

<PAGE>

Item 6.   Management's Discussion and Analysis or  Plan  of
          Operation.

      The following discussion should be read in conjunction with
the  audited  consolidated  financial statements  and  the  notes
thereto  appearing elsewhere in this report and is  qualified  in
its entirety by the foregoing.

Executive Overview

     Epolin,  Inc.  (the  "Company") is  a  specialized  chemical
company   primarily  engaged  in  the  manufacturing,  marketing,
research  and  development  of dyes and  dye  formulations.   The
Company's  business is heavily weighted towards the  development,
manufacture  and  sale of near infrared dyes.   Applications  for
these  dyes  cover several markets that include laser protection,
welding,  sunglasses, optical filters, glazing  and  imaging  and
security   inks  and  tagants.   The  Company  also  manufactures
specialty   chemicals   for  certain   United   States   chemical
manufacturers.

      The  Company has succeeded in growing over the last  decade
based  on  the development, application and manufacture  of  near
infrared  dyes.  Although the Company does not rely upon  patents
for  protection  of  its  dye business, no  competitors,  to  the
Company's  knowledge, actively market near infrared dyes  without
bundling the dyes as part of another product.  The Company's dyes
can  be uniquely formulated to each customer's specifications and
manufactured  in  the Company's own facility.  In  addition,  the
Company  holds  a broad range of dyes in inventory for  immediate
sale.

       The  Company  sells  its  products  to  manufacturers   of
plastics/resins, credit cards, electronics, glass and other basic
materials.  The Company's customers are located in all regions of
the  world, although a material portion of the Company's business
is  dependent  on certain domestic customers, the loss  of  which
could  have  a  material effect on operations.   As  the  service
economy continues to dwarf the manufacturing sector in the United
States,  the  Company  anticipates  that  its  products  will  be
increasingly  used by manufacturers located abroad.   During  the
year  ended February 28, 2005, approximately 50.4% of sales  were
to  three  customers.   Two of these customers,  located  in  the
Eastern United States, accounted for 44.0% of sales.  During  the
year  ended February 29, 2004, approximately 65.3% of sales  were
to  four  customers.   Two  of these customers,  located  in  the
Eastern United States, accounted for 42.0% of sales.    The  loss
of one or more key customers could have a material adverse effect
on the Company.

Results of Operations

      The following table sets forth operations data expressed as
a percentage of sales.

                                            Years Ended

                                      February 28,   February 29,
                                        2005           2004

Sales                                   100%           100%

Cost of sales and expenses:
  Cost of sales                         40.1           34.2
  Selling, general and administrative   31.7           32.3
     Total                              71.8           66.5

Operating Income                        28.2           33.5

Income before taxes                     29.7           35.0

Net income (after taxes)                17.5           21.7

<PAGE>

Sales

      Sales increased from $2,734,000 for the year ended February
29,  2004 to $2,880,000 for the year ended February 28, 2005,  an
increase  of  $146,000  or  5.3%.   Such  increase  in  sales  is
primarily due to an increase in sales of dyes for security  inks.
During  fiscal 2005, the Company achieved an approximate $200,000
increase  in sales of dyes for security inks compared  to  fiscal
2004, while sales of dyes in the Company's traditional markets of
welding  and  eye  protection have remained relatively  unchanged
since  fiscal  2002 although such sales did in fact  decrease  in
fiscal 2005 compared to fiscal 2004.

     The sales level of $2,880,000 reached during fiscal 2005 was
an   all   time  high  for  the  Company.   Yet,  this  was   not
significantly  more than in 2004 ($2,734,000), 2003  ($2,690,000)
or  2002  ($2,550,000). The plateau of sales over the  last  four
years  was  in contrast to the greater sales growth  the  Company
experienced   prior  to  2002  and  beginning  in  1991.    While
Management believes the Company has remained strong in  the  sale
of dyes in its traditional markets of welding and eye protection,
sales  have remained relatively stagnant since fiscal 2002.   The
recent modest increases in total Company sales since 2002 is  the
result  of increases in sales of dyes for security inks which  is
the area the Company expects to achieve its strongest growth.

Cost of Sales and Expenses

     Cost of sales increased $218,000, to $1,155,000 for the year
ended February 28, 2005 from $937,000 for the year ended February
29,   2004,  an  increase  of  $218,000.   Selling,  general  and
administrative expenses increased to $914,000 for the year  ended
February  28, 2005 from $882,000 for the year ended February  29,
2004,  an increase of $32,000 notwithstanding that during  fiscal
2004  the  Company  recognized an additional  $86,000  which  was
included  in  fiscal  2004  selling, general  and  administrative
expenses  for  a  lawsuit settlement for which there  was  not  a
comparable item in fiscal 2005.  The total of cost of  sales  and
expenses  for the year ended February 28, 2005 was $2,069,000  as
compared  to $1,819,000 for the year ended February 29, 2004,  an
increase of $250,000.

     Such  increases  in  cost of sales  were  primarily  due  to
increases  in costs related to R&D salaries, inks and  dye  costs
and   applied   factory  overhead,  with  smaller  increases   in
laboratory  salaries, insurance expense and laboratory  supplies.
Such increase in selling, general and administrative expenses for
the  year ended February 28, 2005 compared to the prior year  was
primarily   due  to  increases  in  officers  and  administrative
salaries  and  benefits.$86,000   The recognition of  $86,000  in
fiscal  2004  resulted from a lump sum payment  of  approximately
$193,000  included  in  the selling, general  and  administrative
expenses   reduced  by  approximately  $108,000  for  a  deferred
compensation  liability eliminated as a  result  of  the  lawsuit
settlement.  Such lawsuit had been commenced in December 2000  by
two  individuals, each a former director and former  employee  of
the  Company.   In  the financial statements  included  with  the
Company's  Form  10-KSB for the fiscal year  ended  February  29,
2004,  the  Company had classified such lump sum  payment  as  an
extraordinary item but as a result of comments received from  the
Commission such lump sum payment is now included in the  selling,
general  and  administrative expenses for the fiscal  year  ended
February 28, 2004.

Operating Income

      Operating income for fiscal 2005 decreased to $811,000 from
$914,000  for fiscal 2004, a decrease of $103,000.   This  change
was  primarily due to the increases in cost of sales and selling,
general  and  administrative expenses as described  above,  which
increases were greater than the increase the Company achieved  in
sales for fiscal 2005 compared to fiscal 2004.

Other Income

      Total  other income for fiscal 2005 was $44,000 as compared
to  $43,000 for fiscal 2004.  During fiscal 2005 and fiscal 2004,
the  Company  realized  $36,000 in rental income  in  each  year.
Effective  November  1,  2002,  the  Company  began  to  sublease
approximately  2,500 square feet of its space  to  a  non-

<PAGE>

related
party  to  operate an optics and security inks laboratory  at  an
annual  rent of $36,000.  The Company's interest income increased
to $8,000 in fiscal 2005 from $7,000 in fiscal 2004.

Net Income

      During the fiscal year ended February 28, 2005, the Company
reported  income before taxes of $855,000 as compared  to  income
before  taxes of $957,000 for the year ended February  29,  2004.
Income  taxes were $351,000 for fiscal 2005 compared to  $365,000
for  fiscal  2004.  The decrease in income taxes  of  $14,000  is
primarily  the  result  of two separate items  impacting  on  the
Company's  operation and income.  Although sales increased,  cost
of  sales  and expenses increased at a greater rate  causing  net
income  to  be  lower  in fiscal 2005 compared  to  fiscal  2004,
resulting  in  lower income taxes.  Net income  after  taxes  was
$504,000 or $0.04 per share for the year ended February 28,  2005
as  compared to net income after taxes of $592,000 or  $0.05  per
share  for  the year ended February 29, 2004.   This  change  was
primarily  due  to  the increases in cost of sales  and  selling,
general  and  administrative expenses as described  above,  which
increases were greater than the increase the Company achieved  in
sales for fiscal 2005 compared to fiscal 2004.

      Net income in the future will be dependent upon our ability
to increase revenues faster than we increase our selling, general
and administrative expenses, research and development expense and
other  expenses.   Although sales did  increase  in  fiscal  2005
compared  to fiscal 2004, we did incur greater cost of sales  and
expenses  which  exceeded  the increase  we  achieved  in  sales.
Certain  of  these expenses are due to a greater  emphasis  being
placed on marketing our traditional and new product lines and the
hiring  of  additional  employees.  We  are  encouraged  that  we
recently began shipping development quantities of dyes to certain
new customers which we hope will lead to new ongoing business for
the  Company's products.  No assurance can be given however  that
that  such  will be the case or that our sales will  continue  to
grow.

Operations Outlook

      We  are currently going through a period of reassessing our
direction  in order to increase value for our shareholders.   Our
business,  though reasonably healthy, has not recently  grown  to
the  degree  management anticipated.   The plateau of sales  over
the  last four years, as described above, was in contrast to  the
sales  growth  we saw since 1991.  Based upon these observations,
we  tried  to  learn what could be done to stimulate  growth  and
recapture  the promise of a true growth company. Our  first  task
was  to draw up a business plan.  We believe this highlighted our
one  major  weakness  and that was in sales and  marketing.   For
years  we  felt  it  to be unnecessary to go out  and  reach  our
customers.   We  believed  that our  web  site  was  sufficiently
explicit  to  attract  anyone interested in near  infrared  light
management to come to us because we were the "only game in town".
We  now  realize that the customer has alternatives which do  not
include the use of Epolin dyes. We believe the business plan made
clear  the necessity of hiring a Sales/Marketing executive (which
has  been accomplished) along with back up technical service help
(which  is  in  process).  In order to cover the  cost  of  these
additional  personnel  and place a greater  emphasis  on  company
growth,  we have for the time being suspended the cash  dividends
program  which we had been in place during fiscal 2002, 2003  and
2004.    At  the present time, we believe it is in the long  term
best interest of the shareholders for us to reinvest profits  for
future growth.

      Management  has  recognized that the Company's  traditional
markets   -   serving   welding  and  eye   protection   plastics
manufacturers - have gone through certain changes over  the  last
few  years  in  that  certain customers have consolidated  and/or
moved manufacturing operations to low-cost countries, usually  in
the Far East.  In some of these countries, eye protection may not
be  as  highly valued by the citizenry.  Management expects  that
this  market  will  remain important as a  continuing  source  of
revenue,  but it is not expected to contribute meaningful  growth
on a short-term or long-term basis.  The Company now offers fully
formulated   dye  packages  which  can  be  used  by   the   lens
manufacturer  simply by adding the package to  polycarbonate  and
injection  molding  the  final product.   This  has  allowed  the
Company to maintain a strong position in this market, although it
is  not expected to be a market which will experience significant
growth.  To date, such changes have not had a detrimental  impact
on  net  sales,  inventories or

<PAGE>

cash  flows.   There  can  be  no
assurance that such a trend will continue.   As a result, greater
emphasis has recently been placed on sales and marketing in order
to  grow  the  Company's business in security inks and  coatings.
The  new products that are now the firm underpinnings for  future
growth  are  based  upon  such security  inks,  new  visible  and
infrared  dyes and the forward integration of the Company's  dyes
into formulated pellets.  For the fiscal year ended February  28,
2005  sales  in these new product areas represented approximately
19%  of  all Company sales compared to fiscal year ended February
29,  2004  for which sales in these new product areas represented
approximately 10% of all Company sales.

      Another factor that was considered in the business plan was
management  succession.  Murray S. Cohen, the Company's  Chairman
of  the  Board  and  Chief Executive Officer, has  announced  his
intention  to  step  down  as  Chief  Executive  Officer  at   an
undetermined future date, while continuing to remain as  Chairman
of  the  Board  and  Chief Scientist for the Company.   With  the
hiring of a Sales/Marketing executive, such will add to our  pool
of  personnel  who  can be considered at a  later  date  for  the
position of CEO.

Liquidity and Capital Resources

      The  Company's  primary source of funds is cash  flow  from
operations  in  the  normal  course  of  selling  products.    On
February 28, 2005, the Company had working capital of $2,340,000,
a  debt to equity ratio of 0.17 to 1, and stockholders' equity of
$3,098,000 compared to working capital of $1,896,000, a  debt  to
equity  to  ratio  of  0.17  to 1, and  stockholders'  equity  of
$2,618,000  on  February  29, 2004.  On February  28,  2005,  the
Company had $1,233,000 in cash and cash equivalents, total assets
of  $3,635,000  and  total liabilities of $537,000,  compared  to
$548,000 in cash and cash equivalents, total assets of $3,067,000
and   total  liabilities  of  $449,000  on  February  29,   2004.
Increases in cash and cash equivalents were primarily due  to  an
increase  in  net  cash provided by operating  activities  and  a
change in financing activities for the fiscal year ended February
28,  2005  compared to the fiscal year ended February  29,  2004.
Net  cash  provided by operating activities increased to $836,000
for  fiscal 2005 from $219,000 for fiscal 2004 primarily  due  to
decreases in accounts receivable, inventories and prepaid  taxes,
as  well an adjustment made due to an obligation under a deferred
compensation  agreement.  Net cash used by  investing  activities
was  $128,000 for fiscal 2005 compared to $92,000 for fiscal 2004
which  change  was  primarily due to  an  increase  in  equipment
purchases.  Net cash used by financing activities was $24,000 for
fiscal 2005 compared to net cash used by financing activities  of
$549,000  for  fiscal  2004 resulting primarily  from  the  stock
dividends  paid  in  fiscal  2004  for  which  there  was  not  a
comparable item in fiscal 2005, and a decrease in treasury  stock
purchased in fiscal 2005 compared to fiscal 2004.

      The  Company anticipates, based on currently proposed plans
and assumptions relating to its operations, that its current cash
and  cash  equivalents together with projected  cash  flows  from
operations  and projected revenues will be sufficient to  satisfy
its  contemplated  cash requirements for more than  the  next  12
months.  The Company's contemplated cash requirements for  fiscal
2006 and beyond will depend primarily upon level of sales of  its
products,  inventory  levels,  product  development,  sales   and
marketing   expenditures   and   capital   expenditures.    While
Management believes the Company has remained strong in  the  sale
of dyes in its traditional markets of welding and eye protection,
such  sales  have not increased in volume in the past few  years.
Recently, greater emphasis has been placed on sales and marketing
in  order  to  grow the Company's business in security  inks  and
coatings which Management expects to contribute meaningful growth
to the Company.

      Inflation  has  not  significantly impacted  the  Company's
operations.

Significant Accounting Policies

      Our  discussion  and  analysis of the  Company's  financial
condition   and  results  of  operations  are  based   upon   our
consolidated  financial statements which have  been  prepared  in
conformity  with  U.S. generally accepted accounting  principles.
Our  significant accounting policies are described in Note  B  to
the  consolidated financial statements included elsewhere herein.
The   application   of  our  critical  accounting   policies   is
particularly important to the portrayal of our financial position
and  results  of

<PAGE>

operations.  These critical accounting  policies
require  us  to  make  estimates and judgments  that  affect  the
reported  amounts of assets, liabilities, revenues and  expenses,
and related disclosure of contingent assets and liabilities.   We
believe  the  following critical accounting policies reflect  the
more  significant judgments and estimates used in the preparation
of the consolidated financial statements.

      Inventories  -  Our inventories consist of raw  materials,
work  in process, finished goods and supplies which we value  at
the  lower  of  cost  or  market under the  first-in,  first-out
method.

      Plant,  Property and Equipment - Our plant,  property  and
equipment  are  stated  at  cost.  We  compute  provisions   for
depreciation  on  the  straight-line  methods,  based  upon  the
estimated  useful  lives  of  the  various  assets.    We   also
capitalize the costs of major renewals and betterments.  Repairs
and  maintenance  are charged to operations  as  incurred.  Upon
disposition,  the cost and related accumulated depreciation  are
removed and any related gain or loss is reflected in earnings.

      Income taxes - We account for income taxes under Statement
of  Financial  Accounting  Standards No.  109,  "Accounting  for
Income  Taxes", in which the asset and liability method is  used
in accounting for income taxes.  We recognize deferred taxes for
temporary   differences  between  the  basis   of   assets   and
liabilities for financial statement and for income tax purposes.
Temporary  differences relate primarily to different  accounting
methods  used for depreciation and amortization of property  and
equipment and deferred compensation.

      Revenue Recognition - We recognize revenue consistent  with
the provisions of SEC Staff Accounting Bulletin No. 104, "Revenue
Recognition",  which  sets  forth guidelines  in  the  timing  of
revenue recognition based upon factors such as passage of  title,
payments  and customer acceptance. Any amounts received prior  to
satisfying  our revenue recognition criteria will be recorded  as
deferred  revenue in the accompanying balance sheet. We recognize
revenue from product sales when there is persuasive evidence that
an  arrangement exists, when title has passed, the price is fixed
or  determinable, and we are reasonably assured of collecting the
resulting  receivable. Our policy is to replace certain  products
that   do   not  conform  to  customer  specifications,   however
replacements  are  made at our discretion  subject  to  in  house
product lab analysis. There are no terms or conditions set  forth
within our sales contracts that provide for product replacements.
We expense replacement costs as incurred.

      Stock-based  Compensation - As permitted by  SFAS  No.  123
"Accounting for Stock-Based Compensation," we continue  to  apply
intrinsic   value   accounting  for  our  stock   option   plans.
Compensation cost for stock options, if any, is measured  as  the
excess  of  the quoted market price of the stock at the  date  of
grant  over the amount an employee must pay to acquire the stock.
We  have  adopted disclosure-only provisions of SFAS No. 123  and
SFAS   No.  148,  "Accounting  for  Stock-Based  Compensation   -
Transition  and Disclosure - an Amendment of FASB  Statement  No.
123."

Other Information

     In  August  2001,  the  Board of Directors  of  the  Company
authorized a 500,000 share stock repurchase program.  Pursuant to
the  repurchase program, the Company may purchase up  to  500,000
shares  of  its common stock in the open market or  in  privately
negotiated  transactions  from time  to  time,  based  on  market
prices.  The Company indicated that the timing of the buyback  of
the  Company's  shares will be dictated by overall financial  and
market  conditions  and  other  corporate  considerations.    The
repurchase  program  may  be suspended  without  further  notice.
During the fiscal year ended February 28, 2005, a total of 50,000
were  repurchased  at a cumulative cost of $29,750.   During  the
fiscal  year  ended February 29, 2004, a total of 184,000  shares
were  repurchased at a cumulative cost of $103,405.   During  the
fiscal  year  ended February 28, 2003, a total of  32,500  shares
were repurchased at a cumulative cost of $18,624 while during the
fiscal  year  ended February 28, 2002, a total of  30,000  shares
were repurchased at a cumulative cost of $14,837.

     The Company did not pay any cash dividends during the fiscal
year  ended  February 28, 2005.  During fiscal 2004, the  Company
paid two cash dividends, the first being $.02 per share in August
2003

<PAGE>

and  the  second being $.02 per shares  in  February  2004.
During the fiscal year ended February 28, 2003, the Company  also
paid  two cash dividends, the first being $.04 per share in  July
2002  and the second being $.03 per share in January 2003.  Prior
thereto, and during the fiscal year ended February 28, 2002,  the
Company  also paid two cash dividends, the first being  $.03  per
share in June 2001 (which represented the first time that a  cash
dividend  was paid by the Company) and the second being $.04  per
share in February 2002.

Off-Balance Sheet Arrangements

     The Company has no off-balance sheet arrangements as defined
in Item 303(c) of Regulation S-B.


Item 7.   Financial Statements.

     See the Financial Statements annexed to this report.


Item 8.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure.

     Not applicable.


Item 8A.  Controls and Procedures.

       The   Company's  Chief  Executive  Officer  and  Principal
Financial Officer have reviewed the Company's disclosure controls
and  procedures  as  of  the end of the period  covered  by  this
report.   Based upon this review, such officers believe that  the
Company's  disclosure controls and procedures  are  effective  in
timely  alerting  them  to material information  required  to  be
included  in this report.  The corrective action which  has  been
taken in the financial statements included with this report  (see
Part II, Item 6, "Management's Discussion and Analysis or Plan of
Operation  -  Cost of Sales and Expenses") has not impacted  upon
management's conclusions.  Such corrective action which  resulted
from   comments  received  from  the  Securities   and   Exchange
Commission  pertains to the reclassification  of  the  litigation
settlement in 2003 previously classified as an extraordinary item
to  its  current  treatment which is to  include  the  settlement
payment  in selling, general and administrative expenses.   There
have  been  no  significant  changes  in  internal  control  over
financial reporting that occurred during the fiscal year  covered
by  this  report that have materially affected, or are reasonably
likely to materially affect, the Company's internal control  over
financial  reporting, including the corrective  action  described
above.


Item 8B.  Other Information.

     Not applicable.



                            PART III

Item 9.   Directors,  Executive  Officers,  Promoters  and
          Control Persons;
          Compliance with Section 16(a) of the Exchange Act.

      Set  forth  below are the present directors  and  executive
officers  of  the Company.  Note that there are no other  persons
who  have  been nominated or chosen to become directors  nor  are
there  any other persons who have been chosen to become executive
officers.   There  are no arrangements or

<PAGE>

understandings  between
any  of  the  directors, officers and other persons  pursuant  to
which  such  person  was selected as a director  or  an  officer.
Directors  are elected to serve until the next annual meeting  of
stockholders  and  until their successors have been  elected  and
have qualified.  Officers serve at the discretion of the Board of
Directors.


                              Present Position    Has Served as
Name                 Age      and Offices         Director Since

Murray S. Cohen       79      Chairman  of  the        1984
                              Board, Chief Executive
                              Officer, Secretary
                              and Director

James   Ivchenko      65      President  and Director  1993

Morris Dunkel         76      Director                 1984

James R. Torpey, Jr.  55      Director                 2001


      None  of the directors and officers is related to any other
director or officer of the Company.

       Set  forth  below  are  brief  accounts  of  the  business
experience  during  the  past five years  of  each  director  and
executive officer of the Company and each significant employee of
the Company.

      MURRAY  S.  COHEN has served as Director,  Chief  Executive
Officer and Chairman of the Board of the Company since June  1984
and  Secretary since March 2001.  From June 1984 to August  1994,
Dr.  Cohen  was  also President.  From January 1978  through  May
1983, Dr. Cohen was the Director of Research and Development  for
Apollo Technologies Inc., a company engaged in the development of
pollution control procedures and devices.  Dr. Cohen was employed
as  a  Vice  President  and  Technical  Director  of  Borg-Warner
Chemicals   from   1973   through   January   1978,   where   his
responsibilities included the organization, project selection and
project  director of a 76 person technical staff which  developed
materials  for  a  variety of plastic products.   He  received  a
Bachelor  of  Science Degree from the University of  Missouri  in
1949  and  a Ph.D. in Organic Chemistry from the same institution
in 1953.

      JAMES IVCHENKO has served as Director of the Company  since
September  1993, President since August 1994, and  from  February
1992 to August 1994, he was Technical Director and Vice President
of  Operations.   Prior  thereto, Mr. Ivchenko  was  employed  by
Ungerer  &  Co. as Plant Manager for the Totowa, New  Jersey  and
Bethlehem,  Pennsylvania facilities from May 1988  to  May  1991.
Mr.  Ivchenko  has  over 30 years of experience  in  the  flavor,
fragrance and pharmaceutical intermediate industry.   He received
his  Bachelor of Arts Degree, Masters of Science and  Masters  of
Business  Administrations from Fairleigh Dickinson University  in
New Jersey.

      MORRIS  DUNKEL has served as Director of the Company  since
June  1984.  Since 1992, he has been Vice President and Technical
Director of Elan Chemical Inc., a chemical company in the  flavor
and  fragrances industry.  From 1976 through 1983, Dr. Dunkel was
employed  by Tenneco Chemicals, Inc., a firm engaged in  chemical
production activities, in the capacities of manager and  director
of Tenneco's organic chemicals research and development division.
Dr.  Dunkel has been issued several United States patents and has
published  numerous articles relating to chemical processes.   He
received  a  Bachelor of Science Degree in 1950 from Long  Island
University.  Dr. Dunkel received a Master of Science Degree  from
Brooklyn College in 1954 and Ph.D. in Organic Chemistry from  the
University of Arkansas in 1956.

      JAMES  R. TORPEY, JR. has served as Director of the Company
since  July  2001.   Mr. Torpey is President  of  Madison  Energy
Consultants.   From 1995 to 2002, he was Director  of  Technology
Initiatives  at First Energy/GPU, Chairman of the Solar  Electric
Power  Association,  and President and member  of  the  Board  of
Directors  of  GPU Solar, Inc.  He is currently a member  of  the
U.S.  Department  of  Energy Solar

<PAGE>

Industry Advisory  Board.  Mr.
Torpey  received  his  Masters  of Business  Administration  from
Rutgers University in 1991.

      GREG  AMATO, age 48, has been employed by the Company since
November  2004 and has been Vice President of Sales and Marketing
since January 2005.  From 1993 to 2004, Mr. Amato was employed by
Elementis,  PLC  and certain of its subsidiaries  and  divisions,
which   company   is  a  specialty  chemical  manufacturer.    In
connection  therewith,  Mr. Amato was Vice  President,  Specialty
Markets  of  Elementis Specialties, Inc., located in  Hightstown,
New  Jersey  from  2000  to 2004 and was President  of  Elementis
Performance Polymers of Belleville, New Jersey from 1998 to 2000.
Mr.  Amato  received  a  Bachelor of  Chemical  Engineering  from
Georgia Institute of Technology in 1978.

Audit Committee Financial Expert

     The  Company  does  not  have an audit  committee  financial
expert, as such term is defined in Item 401(e) of Regulation S-B,
serving  on its audit committee because it has no audit committee
and  is not required to have an audit committee because it is not
a listed security.

Code of Ethics

     The  Board  of  Directors  has  adopted  a  Code  of  Ethics
applicable   to   its  principal  executive  officer,   principal
financial officer, principal accounting officer or controller, or
persons  performing  similar  functions,  which  is  designed  to
promote honest and ethical conduct; full, fair, accurate,  timely
and  understandable  disclosure; and compliance  with  applicable
laws, rules and regulations.   A copy of the Code of Ethics  will
be  provided to any person without charge upon written request to
the  Secretary  of the Company at its executive offices,  358-364
Adams Street, Newark, New Jersey 07105.


Item 10.  Executive Compensation.

       The   following  summary  compensation  tables  set  forth
information concerning the annual and long-term compensation  for
services  in  all capacities to the Company for the fiscal  years
ended February 28, 2005, February 29, 2004 and February 28, 2003,
of  those  persons who were, at February 28, 2005 (i)  the  chief
executive  officer  and  (ii) the other most  highly  compensated
executive  officers of the Company, whose annual base salary  and
bonus compensation was in excess of $100,000 (the named executive
officers):

                   Summary Compensation Table

                         Annual
                         Compensation


Name   and  Principal   Fiscal
Position                Year           Salary       Bonus

Murray S. Cohen         2005       $266,462(1)(3)  $40,000
Chairman of the         2004       $249,197(1)(3)  $29,500
Board and Chief         2003       $227,146(1)(3)  $32,000
Executive Officer

James Ivchenko          2005       $245,699(2)(3)  $35,000
President               2004       $229,002(2)(3)  $25,000
                        2003       $208,097(2)(3)  $27,000



                                Long-Term
                                Compensation

                                      Restricted    Shares
Name   and  Principal                 Stock         Underlying
Position                              Awards        Options

Murray S. Cohen         2005            0                 0
Chairman of the         2004            0            20,000
Board and Chief         2003            0                 0
Executive Officer

James Ivchenko          2005            0                 0
President               2004            0            20,000
                        2003            0                 0


_______________________
(1)  Includes  compensation of $82,017, $74,016 and  $63,837  for
     2005,  2004 and 2003, respectively,

<PAGE>

     due to Murray  S.  Cohen
     based  upon  the Company's sales for fiscal 2004,  2003  and
     2002  paid  in fiscal 2005, 2004 and 2003, respectively,  as
     determined under his employment contract.  Does not include,
     however,  compensation  due to  Dr.  Cohen  based  upon  the
     Company's  sales  for  fiscal 2005 as determined  under  his
     employment contract which will be paid in fiscal 2006  which
     will be in the amount of $93,603.

(2)  Includes compensation of $68,347, $60,559 and  $51,070
     for 2005, 2004 and 2003, respectively, due to James Ivchenko
     based upon the Company's sales for fiscal 2004, 2003 and 2002
     paid in fiscal 2005, 2004 and 2003, respectively, as determined
     under  his employment contract.  Does not include,  however,
     compensation due to Mr. Ivchenko based upon the Company's sales
     for fiscal 2005 as determined under his employment contract which
     will  be paid in fiscal 2006 which will be in the amount  of
     $79,203.

(3)  Does   not   include   other  deferred   compensation
     arrangements  for  each of Dr. Cohen and Mr.  Ivchenko.  See
     "Deferred Compensation/Employment Contracts and Change in Control
     Arrangements" below.

Stock Option Plans

      The  Company  previously adopted the 1986 Employees'  Stock
Option Plan (the "1986 Plan").  As of April 1996, options may  no
longer  be granted under the 1986 Plan.  Under the terms  of  the
1986  Plan,  options granted thereunder could  be  designated  as
options which qualify for incentive stock option treatment  under
Section  422A  of the Internal Revenue Code of 1986,  as  amended
(the  "Code"), or options which do not so qualify.   In  December
1995,  options  to acquire up to 490,000 shares of the  Company's
Common Stock were granted under the 1986 Plan.  Such options  had
an  expiration date of December 1, 2005.  In fiscal 2002, options
to  acquire  185,000 shares of the Company's  Common  Stock  were
exercised  under  the  1986 Plan.  In  prior  years,  options  to
acquire  270,000  shares  of  the  Company's  Common  Stock  were
exercised  under the 1986 Plan.  In addition, options to  acquire
35,000  shares under the 1986 Plan have lapsed.  As a result,  as
of  February 29, 2004, there are no outstanding options under the
1986 Plan.

      In December 1998, the Company adopted the 1998 Stock Option
Plan  (the  "1998 Plan") for employees, officers, consultants  or
directors  of  the  Company to purchase up to 750,000  shares  of
Common  Stock of the Company (the "1998 Plan Option  Pool").   In
September 2001, the Board of Directors increased the size of  the
1998 Plan Option Pool to 1,500,000 shares.  Options granted under
the  1998 Plan shall be non-statutory stock options which do  not
meet  the  requirements of Section 422 of the  Code.   Under  the
terms  of  the  1998  Plan, participants may receive  options  to
purchase Common Stock in such amounts and for such prices as  may
be established by the Board of Directors or a committee appointed
by  the  Board  to administer the 1998 Plan.  As of February  28,
2005, options to acquire 1,042,000 shares of the Company's Common
Stock  have been granted under the 1998 Plan and 458,000  options
were  available  for future grant.  To date, options  to  acquire
600,000  shares of the Company's Common Stock have been exercised
and  options to acquire 120,000 shares have been cancelled  under
the 1998 Plan.

      No  stock  options or other stock appreciation rights  were
granted  to  any of the persons named in the Summary Compensation
Table during the fiscal year ended February 28, 2005.

     The following table set forth certain information as to each
exercise  of  stock  options during the year ended  February  28,
2005, by the persons named in the Summary Compensation Table  and
the fiscal year-end value of unexercised options:

<PAGE>

Aggregated Option Exercises in Fiscal 2005 and Year-End Option
Value


                                         Number of Securities
                   Shares                Underlying Unexercised
                   Acquired              Options at February 28, 2005
                   On        Value
                   Exercise  Realized    Exercisable   Unexercisable

Murray S. Cohen    -0-       -0-         25,000         20,000

James Ivchenko     -0-       -0-         25,000         20,000


                     Value of Unexercised
                     In-the-Money Options
                     at February 28, 2005(1)

                   Exercisable      Unexercisable

Murray S. Cohen       $7,000         $3,600
James Ivchenko        $7,000         $3,600

(1)  Based on the average of the closing bid and asked prices  of
     the  Company's Common Stock as of February 28,  2005,  minus
     the  exercise  price,  multiplied by the  number  of  shares
     underlying the options.  The amounts reflected in this table
     may never be obtained.

Other Stock Option Arrangements

      Pursuant  to an employment agreement entered in  with  Greg
Amato  as of November 1, 2004, the Company has granted Mr.  Amato
an  option  to  purchase 100,000 shares of Common  Stock  of  the
Company  at an exercise price equal to the fair market  value  of
the Company's Common Stock on November 1, 2004 which option shall
be  exercisable  only after the completion of Mr. Amato's  second
year of employment under the employment agreement.   In addition,
pursuant to the employment agreement, Mr. Amato will receive, one
year  from  the date of his employment agreement provided  he  is
then employed by the Company, 100,000 shares of restricted Common
Stock of the Company.

Compensation of Directors

      In fiscal 2002, the Company began to pay all directors $750
for each board meeting attended.  Previous thereto, and since the
Company's  inception, no director received any cash  compensation
for  his services as such.   Directors have always been and  will
continue  to  be reimbursed for reasonable expenses  incurred  on
behalf of the Company.

Deferred Compensation/Employment Contracts and Change in  Control
Arrangements

      Pursuant to a deferred compensation agreement, as  amended,
entered  into with James Ivchenko, President of the Company,  the
Company  has agreed to pay Mr. Ivchenko $32,000 per year for  ten
consecutive years commencing the first day of the month following
Mr.  Ivchenko reaching the age of 65.  Effective as of  March  1,
1999,  the  Company entered into a ten year employment  agreement
with  Mr. Ivchenko.  Pursuant thereto, Mr. Ivchenko shall be paid
an  annual salary of not less than the greater of his annual base
salary  in effect immediately prior to the effective date of  the
agreement or any subsequently established annual base salary.  In
addition  thereto,  Mr.  Ivchenko  shall  receive  as  additional
compensation  a certain percentage (as set forth  below)  of  the
Company's annual gross sales up to but not exceeding annual gross
sales  of  $3 million.  Such percentage starts at 1.50%  for  the
fiscal  year ended February 29, 2000 and increases by  0.25%  per
year during the term of the agreement.  In the event of death  or
disability,  the  agreement provides that  Mr.  Ivchenko  or  his
estate  will  receive  100% of his annual salary  and  additional
compensation as described above for the fiscal year during  which
he  died  or  became disabled, and 50% of his annual  salary  and
annual  additional compensation which he would had  received  (if
not  for  his death or disability) for the remainder of  the  ten
year term.

     The   obligations  to  Mr.  Ivchenko  under   his   deferred
compensation agreement are partially funded with a life insurance
policy  owned  by  the  Company.  Such funds,  however,  are  not
legally  restricted  and are considered  part  of  the  Company's
general  assets  subject  to claims of  creditors.  In  addition,
amounts  due  to Mr. Ivchenko under his employment agreement  are
unfunded.  Accordingly, there can be no assurance that  any  such
amounts due to Mr. Ivchenko will be paid.

<PAGE>

     Effective as of March 1, 1999, the Company also entered into
a ten year employment agreement with Murray S. Cohen, Chairman of
the  Board and Chief Executive Officer of the Company.   Pursuant
thereto,  Dr. Cohen shall be paid an annual salary  of  not  less
than  the greater of his annual base salary in effect immediately
prior  to the effective date of the agreement or any subsequently
established  annual base salary. In addition thereto,  Dr.  Cohen
shall receive as additional compensation a certain percentage (as
set  forth below) of the Company's annual gross sales up  to  but
not  exceeding annual gross sales of $3 million.  Such percentage
starts  at 2.00% for the fiscal year ended February 29, 2000  and
increases by 0.25% per year during the term of the agreement.  In
the event of death or disability, the agreement provides that Dr.
Cohen  or  his estate will receive 100% of his annual salary  and
additional  compensation as described above for the  fiscal  year
during  which he died or became disabled, and 50% of  his  annual
salary  and  annual additional compensation which  he  would  had
received  (if not for his death or disability) for the  remainder
of  the ten year term. The Company had previously entered into  a
deferred compensation agreement in June 1998 with Dr. Cohen which
provided  for  the payment of certain funds to Dr.  Cohen  for  a
period  of  ten years beginning two weeks after the date  of  his
retirement.  Such agreement was terminated in connection with the
execution  of  the  employment  agreement  with  Dr.  Cohen.   In
addition to the foregoing, Dr. Cohen will be entitled to  receive
$79,041  upon  his  retirement  in  connection  with  a  deferred
compensation  agreement entered into in January  1996  which  was
terminated in June 1998.  Such amount will be paid to  Dr.  Cohen
upon retirement either in equal consecutive monthly payments  for
a  period not exceeding 60 months or a single payment which  will
be at the discretion of the Company.

     The  obligation to pay Dr. Cohen $79,041 under his  deferred
compensation agreement is unfunded.  In addition, amounts due  to
Dr.  Cohen  under  his employment agreement  are  also  unfunded.
Accordingly, there can be no assurance that any such amounts  due
to Dr. Cohen will be paid.

      The  Company  does not have any termination  or  change  in
control arrangements with any of its named executive officers.


Item  11.   Security Ownership of Certain Beneficial  Owners  and
Management
          and Related Stockholder Matters.

      The following table sets forth, as of May 10, 2005, certain
information with regard to the record and beneficial ownership of
the  Company's  Common  Stock by (i) each stockholder  owning  of
record  or beneficially 5% or more of the Company's Common Stock,
(ii)  each  director  of the Company, (iii) the  Company's  Chief
Executive  Officer and other executive officers, if any,  of  the
Company  whose annual base salary and bonus compensation  was  in
excess of $100,000 (the "named executive officers"), and (iv) all
executive officers and directors of the Company as a group:

                            Amount and Nature        Percent
Name of Beneficial Owner    of Beneficial Ownership  of Class

Murray S. Cohen(1)*           1,895,958                16.0%
James Ivchenko(2)*            1,469,587                12.4%
Morris Dunkel(3)*               250,000                 2.1%
James R. Torpey, Jr.(3)*         37,500                  **
Claire Bluestein(4)*            995,155                 8.4%
Santa Monica Partners, L.P.(5)  825,900                 7.0%
Sandra Lifschitz(6)             605,000                 5.1%

All Executive Officers and
Directors as a Group
(4 persons)                   3,653,045                30.7%
_________________________
*    The  address  for each is 358-364 Adams Street, Newark,  New
     Jersey 07105.

**   Less than 1%.

<PAGE>

(1)  Includes  1,845,958  shares held by  Dr.  Cohen  and  25,000
     shares held by the wife of Dr. Cohen.  Also, includes 25,000
     shares  which Dr. Cohen has the right to acquire  within  60
     days  pursuant to the exercise of options granted under  the
     1998 Plan.  In addition, Dr. Cohen has options granted under
     the  1998 Plan to acquire an additional 20,000 shares  which
     are not exercisable within 60 days.

(2)  Includes  1,005,000 shares held by Mr. Ivchenko and  439,587
     held  by Mr. Ivchenko and his wife, as joint tenants.  Also,
     includes  25,000 shares which Mr. Ivchenko has the right  to
     acquire  within 60 days pursuant to the exercise of  options
     granted under the 1998 Plan.  In addition, Mr. Ivchenko  has
     options granted under the 1998 Plan to acquire an additional
     20,000 shares which are not exercisable within 60 days.

(3)  Includes  25,000 shares which each has the right to  acquire
     within  60 days pursuant to the exercise of options  granted
     under  the 1998 Plan.  In addition, each has options granted
     under  the 1998 Plan to acquire an additional 10,000  shares
     which are not exercisable within 60 days.

(4)  Includes  25,000 shares which she has the right  to  acquire
     within  60 days pursuant to the exercise of options  granted
     under the 1998 Plan.  Ms. Bluestein is a former director  of
     the Company.

(5)  This  information is based solely upon information  reported
     in  filings  made  to  the  SEC on behalf  of  Santa  Monica
     Partners, L.P.  The address for Santa Monica Partners,  L.P.
     is 1865 Palmer Avenue, Larchmont, New York.

(6)  This  information is based solely upon information  reported
     in  filings  made to the SEC on behalf of Sandra  Lifschitz.
     Her address is 7 Tulane Drive, Livingston, New Jersey.


The Stockholders Agreement

           Pursuant  to  a  Stockholders  Agreement  executed  in
October  2002, each of the then members of the Board of Directors
(which  includes  the four current members,  as  well  as  Claire
Bluestein and Peter Kenny) has provided the Company with  certain
rights of refusal in the event any of such individuals desire  to
sell any of the shares of the Company's Common Stock which any of
them   hold  of  record  or  beneficially.   Excluded  from  such
restrictions are gifts in which the proposed donee agrees  to  be
bound to the Stockholders Agreement and transfers by will or  the
laws  of  descent,  provided the shares remain  subject  to  said
restrictions.   In  addition, shares may be transferred  by  such
individuals with the prior approval of the Board of Directors  of
the  Company  (or any committee authorized by the Board  to  give
such approval).


Item 12.  Certain Relationships and Related Transactions.

      See  Part  III,  Item 10, "Deferred Compensation/Employment
Contracts   and  Change  in  Control  Arrangements"   above   for
information on the transactions described therein.


Item 13.  Exhibits.

          3.1  Epolin Inc.'s certificate of incorporation as
               amended (1)
          3.2  Epolin Inc.'s by-laws(1)
          4.1  Specimen certificate for common stock(1)
          31.1 Certification of Chief Executive Officer  pursuant
               to  Section 302 of the Sarbanes-Oxley Act of  2002
               (Rules 13a-14 and 15d-14 of the Exchange Act)

<PAGE>

          31.2 Certification   of  Principal  Financial   Officer
               pursuant to Section 302 of the Sarbanes-Oxley  Act
               of  2002  (Rules 13a-14 and 15d-14 of the Exchange
               Act)
          32.1 Certification  pursuant  to  Section  906  of  the
               Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
          ___________________
     (1)   Filed with the Company's Form S-18 Registration
           Statement SEC File 33-25405-NY.


Item 14.  Principal Accountant Fees and Services.

      The following is a summary of the fees billed to us by  the
principal  accountants  to the Company for professional  services
rendered  for  the  fiscal  years ended  February  28,  2005  and
February 29, 2004:

                                   Fiscal 2005    Fiscal 2004
     Fee Category                  Fees           Fees

     Audit Fees                    $45,200        $45,165
     Audit Related Fees            $0             $0
     Tax Fees                      $2,835         $3,000
     All Other Fees                $0             $0

     Total Fees                    $48,035        $48,165

      Audit  Fees.   Consists  of fees  billed  for  professional
services rendered for the audit  of  our   financial   statements
and   review   of   interim consolidated   financial   statements
included  in quarterly  reports and services that  are   normally
provided   by  the  principal accountants  in   connection   with
statutory  and regulatory filings or engagements.

      Audit  Related Fees. Consists of fees billed for  assurance
and   related  services  that  are  reasonably  related  to   the
performance of the audit or review of our consolidated  financial
statements and are not reported under "Audit Fees".

     Tax Fees.  Consists of fees billed for professional services
for  tax compliance, tax advice and tax planning.  These services
include preparation of federal and state income tax returns.

      All Other  Fees.  Consists of fees for product and services
other than the services reported above.

     Pre-Approval Policies and Procedures

      Prior  to  engaging its accountants to perform a particular
service, the Company's Board of Directors obtains an estimate for
the  service to be performed. All of the services described above
were  approved by the Board of Directors in accordance  with  its
procedures.

<PAGE>
                           SIGNATURES

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

                                   EPOLIN, INC.
                                   (Registrant)



                                 By: /s/ Murray S. Cohen
                                     Murray S. Cohen,
                                     Chief Executive Officer


                                 Dated:    May 25, 2005


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

Signature                  Title                       Date



/s/ Murray S. Cohen        Chief Executive Officer,    5/25/2005
Murray S. Cohen            Chairman of the Board,
                           Secretary and Director
                           (Principal Executive Officer)

/s/ James Ivchenko         President and  Director     5/25/2005
James Ivchenko             (Principal Financial Officer)


/s/ Morris Dunkel          Director                    5/25/2005
Morris Dunkel


/s/ James R. Torpey, Jr.   Director                    5/25/2005
James R. Torpey, Jr.

<PAGE>


                           EPOLIN, INC. AND SUBSIDIARY

                              FINANCIAL STATEMENTS

               YEARS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


<PAGE>

                                    CONTENTS


                                                                        Page
                                                                        ----

Independent Auditor's Report                                              1

Consolidated Financial Statements:

    Consolidated Balance Sheets                                         2 - 3

    Consolidated Statements of Income                                     4

    Consolidated Statements of Stockholders' Equity                       5

    Consolidated Statements of Cash Flows                               6 - 7

Notes to Consolidated Financial Statements                              8 - 22
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT
             Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders
EPOLIN, INC. AND SUBSIDIARY
Newark, New Jersey


We have audited the accompanying Consolidated Balance Sheets of Epolin, Inc. and
it's wholly owned Subsidiary as of February 28, 2005 and February 29, 2004 and
the related Consolidated Statements of Income, Stockholders' Equity and Cash
Flows for each of the two years in the period ended February 28, 2005. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.

     An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Epolin Inc. and Subsidiary
as of February 28, 2005 and February 29, 2004, and the results of its operations
and its cash flows for each of the two years in the period ended February 28,
2005, in conformity with U.S. generally accepted accounting principles.



Weismann Associates LLC
Livingston, NJ 07039


March 28, 2005

                                       1
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                            February 28,
                                                      -----------------------
Current assets:                                          2005         2004
                                                      ----------   ----------
  Cash and cash equivalents                           $1,232,666      547,930
  Accounts receivable                                    553,011      643,581
  Inventories                                            750,416      757,767
  Prepaid expenses                                        49,874       57,385
  Prepaid taxes                                              600       70,650
  Deferred tax assets-current portion                      2,322        3,710
                                                      ----------   ----------

    Total current assets                               2,588,889    2,081,023
                                                      ----------   ----------

Plant, property and equipment - at cost:
  Land                                                    81,000       81,000
  Building                                               369,000      369,000
  Laboratory equipment                                   196,135      182,419
  Office equipment                                        83,647       72,915
  Leasehold improvements                                 664,665      600,679
                                                      ----------   ----------

    Total                                              1,394,447    1,306,013

  Less: Accumulated depreciation and amortization        750,104      716,081
                                                      ----------   ----------

    Net plant, property and equipment                    644,343      589,932
                                                      ----------   ----------

Other assets:
  Deferred tax assets-non current portion                196,051      229,417
  Cash value - life insurance policy                     206,170      166,772
                                                      ----------   ----------

    Total other assets                                   402,221      396,189
                                                      ----------   ----------

    Total                                             $3,635,453    3,067,144
                                                      ==========   ==========


        The accompanying notes are an integral part of these statements.

                                       2
<PAGE>

                                EPOLIN, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS (CONTINUED)

                            LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                              February 28,
                                                                       -------------------------
                                                                           2005          2004
                                                                       -----------   -----------
<S>                                                                    <C>             <C>
Current liabilities:
  Accounts payable                                                     $         -         1,259
  Accrued expenses                                                         243,414       178,090
  Taxes payable:
    Payroll                                                                  2,322         1,719
    Income                                                                   3,270         3,708
                                                                       -----------   -----------
    Total current liabilities                                              249,006       184,776
                                                                       -----------   -----------

Other liabilities - Deferred compensation                                  288,090       264,011
                                                                       -----------   -----------

        Total liabilities                                                  537,096       448,787
                                                                       -----------   -----------

Commitments and Contingencies

Stockholders' equity:
  Preferred stock, $15.513 par value; 940,000 shares authorized;
    none issued
  Preferred stock, series A convertible non-cumulative,
    $2.50 par value; redemption price and liquidation preference;
    60,000 shares authorized; 5,478 shares issued and redeemed
  Common stock, no par value; 20,000,000 shares authorized;
    12,729,000 and 12,704,000 shares issued, 11,815,355 and
    11,840,355 shares outstanding at 2005 and 2004, respectively         2,340,183     2,333,933
    Paid-in capital                                                          6,486         6,486
    Retained earnings                                                    1,073,620       570,120
                                                                       -----------   -----------
        Total                                                            3,420,289     2,910,539
    Less: Treasury stock-at cost                                           321,932       292,182
                                                                       -----------   -----------
      Total stockholders' equity                                         3,098,357     2,618,357
                                                                       -----------   -----------
      Total                                                            $ 3,635,453     3,067,144
                                                                       ===========   ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
               YEARS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004

<TABLE>
<CAPTION>
                                                                 2005          2004
                                                             -----------   -----------
<S>                                                          <C>             <C>
Sales                                                        $ 2,880,100     2,733,892
                                                             -----------   -----------

Cost of sales and expenses:
  Cost of sales                                                1,155,055       937,130
  Selling, general and administrative                            914,130       882,274
                                                             -----------   -----------

    Total                                                      2,069,185     1,819,404
                                                             -----------   -----------

Operating income                                                 810,915       914,488
                                                             -----------   -----------

Other income:
  Rental income                                                   36,000        36,000
  Interest                                                         7,709         7,003
                                                             -----------   -----------

    Total other income                                            43,709        43,003
                                                             -----------   -----------

Income before taxes                                              854,624       957,491

Income taxes                                                     351,124       365,357
                                                             -----------   -----------

Net income                                                   $   503,500       592,134
                                                             ===========   ===========

Per share data:
  Basic earnings per common share                            $      0.04          0.05
                                                             ===========   ===========

  Fully diluted earnings per common share                    $      0.04          0.05
                                                             ===========   ===========

  Weighted average number of common shares outstanding        11,835,910    11,845,960
                                                             ===========   ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       4
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

               YEARS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004

<TABLE>
<CAPTION>
                               Number of                    Additional
                              Outstanding      Common        Paid-in-       Retained       Treasury       Treasury     Stockholders'
                                Shares         Stock         Capital        Earnings        Shares          Costs         Equity
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------
<S>                            <C>          <C>                   <C>        <C>              <C>           <C>           <C>
Balance - March 1, 2003        12,566,500   $  2,304,558          6,486        452,700        679,645       (188,777)     2,574,967

Common stock issued for
 stock option                     137,500         29,375              -              -              -              -         29,375

Dividends paid                          -              -              -       (474,714)             -              -       (474,714)

Treasury stock purchased                -              -              -              -        184,000       (103,405)      (103,405)

Net income                              -              -              -        592,134              -              -        592,134
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------

Balance - February 29, 2004    12,704,000   $  2,333,933          6,486        570,120        863,645       (292,182)     2,618,357
                             ============   ============   ============   ============   ============   ============   ============


Balance - March 1, 2004        12,704,000   $  2,333,933          6,486        570,120        863,645       (292,182)     2,618,357

Common stock issued for
 stock option                      25,000          6,250              -              -              -              -          6,250

Treasury stock purchased                -              -              -              -         50,000        (29,750)       (29,750)

Net income                              -              -              -        503,500              -              -        503,500
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------

Balance - February 28, 2005    12,729,000   $  2,340,183          6,486      1,073,620        913,645       (321,932)     3,098,357
                             ============   ============   ============   ============   ============   ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

               YEARS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


<TABLE>
<CAPTION>
                                                                       2005          2004
                                                                    ----------    ----------
<S>                                                                 <C>              <C>
Cash flows from operating activities:
  Net income                                                        $  503,500       592,134
  Adjustments to reconcile net income to net cash provided by
   operating activities:
    Depreciation and amortization                                       34,023        28,661
    Deferred tax expense                                                34,754        52,249
    Obligation under deferred compensation agreement                    24,079       (83,547)
  (Increase) decrease in:
    Accounts receivable                                                 90,570      (272,120)
    Inventories                                                          7,351      (128,455)
    Prepaid expenses                                                     7,511        (9,941)
    Prepaid taxes                                                       70,050        22,888
  Increase (decrease) in:
    Accounts payable                                                    (1,259)       (5,151)
    Accrued expenses                                                    65,324        19,168
    Taxes payable                                                          165         3,287
                                                                    ----------    ----------

       Net cash provided by operating activities                       836,068       219,173
                                                                    ----------    ----------

Cash flows from investing activities:
  Increase in cash value - life insurance policy                       (39,398)      (38,186)
  Notes receivable                                                           -        14,139
  Payments for equipment                                               (88,434)      (67,929)
                                                                    ----------    ----------

       Net cash used by investing activities                          (127,832)      (91,976)
                                                                    ----------    ----------
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       6
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

               YEARS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004



                                                   2005           2004
                                               -----------    -----------
Cash flows from financing activities:
 Issuance of common stock                            6,250         29,375
 Dividends paid                                          -       (474,714)
 Treasury stock purchased                          (29,750)      (103,405)
                                               -----------    -----------

   Net cash used by financing activities           (23,500)      (548,744)
                                               -----------    -----------

Increase (decrease) in cash                        684,736       (421,547)

Cash and cash equivalents:
  Beginning                                        547,930        969,477
                                               -----------    -----------

  Ending                                       $ 1,232,666        547,930
                                               ===========    ===========

Supplemental information:
  Income taxes paid                            $   302,400        281,400
                                               ===========    ===========


        The accompanying notes are an integral part of these statements.

                                       7
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note A - Organization:

     The Company is engaged in the development, production and sale of near
infrared dyes to the optical industry for laser protection and welding
applications and other dyes and specialty chemical products that serve as
intermediates and additives used in the adhesive, plastic, aerospace, credit
card security and protective documents industries to customers located in the
United States and throughout the world.

The Company's wholly owned Subsidiary, Epolin Holding, Corp., was incorporated
in New Jersey as a real estate holding company whose assets consist of land and
a building. Prior to being acquired on January 29, 1998, two
officers/stockholders of the Company controlled it.

Note B - Summary of Significant Accounting Policies:

Cash and Cash Equivalents - Includes cash in bank and money market accounts for
purposes of preparing the Statement of Cash Flows.

Concentrations of Credit Risks - The Company and its Subsidiary had cash
deposits in a financial institution and brokerage house in excess of the amount
insured by agencies of the federal government in amounts of $1,133,000 and
$448,000 at February 28, 2005 and February 29, 2004, respectively. In evaluating
this credit risk, the Company periodically evaluates the stability of the
financial institution and brokerage house.

Inventories - Consists of raw materials, work in process, finished goods and
supplies valued at the lower of cost or market under the first-in, first-out
method.

Fair Value of Financial Instruments - The carrying amount of all reported assets
and liabilities, which represent financial instruments, approximate the fair
values of such amounts due to the nature of their relatively short maturity.

Source of Raw Materials - The Company purchases chemicals from several large
chemical manufacturers, further processing them into its saleable products.
Although the Company limits itself to a relatively small number of suppliers, it
is not restricted to such suppliers, and availability of such raw materials is
widespread.

                                       8
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 2005

Note B - Summary of Significant Accounting Policies (continued):

Principles of Consolidation - The accompanying Consolidated Financial Statements
include the accounts of the Company and Subsidiary. Intercompany transactions
and balances have been eliminated in consolidation. Condensed consolidating
financial statements for the years ended February 28, 2005 are:

<TABLE>
<CAPTION>
                                    CONDENSED CONSOLIDATING BALANCE SHEET

                                                                    Epolin
                                                     Epolin         Holding      Eliminations    Consolidated
                                                  ------------    ------------   ------------    ------------
<S>                                               <C>                  <C>           <C>            <C>
Current assets                                    $  2,327,213         261,676              -       2,588,889
Non-current assets                                   1,308,240         572,247       (833,923)      1,046,564
                                                  ------------    ------------   ------------    ------------
      Total                                       $  3,635,453         833,923       (833,923)      3,635,453
                                                  ============    ============   ============    ============

    Total liabilities                                  537,096         200,533       (200,533)        537,096
                                                  ------------    ------------   ------------    ------------

Stockholders' equity:
  Common stock                                       2,340,183               -              -       2,340,183
  Additional paid-in capital                             6,486               -              -           6,486
  Retained earnings                                  1,073,620         633,390       (633,390)      1,073,620
  Treasury stock                                      (321,932)              -              -        (321,932)
                                                  ------------    ------------   ------------    ------------

    Total stockholders' equity                       3,098,357         633,390       (633,390)      3,098,357
                                                  ------------    ------------   ------------    ------------

      Total                                       $  3,635,453         833,923       (833,923)      3,635,453
                                                  ============    ============   ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                 CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                                                    Epolin
                                                     Epolin         Holding      Eliminations    Consolidated
                                                  ------------    ------------   ------------    ------------
<S>                                               <C>                  <C>           <C>            <C>
Sales                                             $  2,880,100               -              -       2,880,100
Other revenue                                                -         133,740        (97,740)         36,000
                                                  ------------    ------------   ------------    ------------
    Total                                            2,880,100         133,740        (97,740)      2,916,100
                                                  ------------    ------------   ------------    ------------

Cost of sales                                        1,155,055               -              -       1,155,055
Selling, general and administrative                    996,156          15,714        (97,740)        914,130
                                                  ------------    ------------   ------------    ------------

    Total                                            2,151,211          15,714        (97,740)      2,069,185

Operating income                                       728,889         118,026              -         846,915

Other income - interest                                  5,704           2,005              -           7,709
                                                  ------------    ------------   ------------    ------------

Income before taxes                                    734,593         120,031              -         854,624

Income taxes                                           340,474          10,650              -         351,124
                                                  ------------    ------------   ------------    ------------

Net income                                        $    394,119         109,381              -         503,500
                                                  ============    ============   ============    ============
</TABLE>

                                        9
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note B - Summary of Significant Accounting Policies (continued):

Plant, Property and Equipment - Stated at cost. Provisions for depreciation are
computed on the straight-line methods, based upon the estimated useful lives of
the various assets.

A summary of the major categories of the Company's plant property and equipment
are as follows:

Building                            Straight Line 39 Years
Machinery and equipment             Straight Line 5 - 7 Years
Furniture and Fixtures              Straight Line 7 Years
Leasehold Improvements              Straight Line 10 - 39 Years

     The costs of major renewals and betterments are capitalized. Repairs and
maintenance are charged to operations as incurred. Upon disposition, the cost
and related accumulated depreciation are removed and any related gain or loss is
reflected in earnings.

     Depreciation and amortization expense totaled $34,023 and $28,661 for the
years ended February 28, 2005 and February 29, 2004, respectively.


Income taxes - The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes", wherein
the asset and liability method is used in accounting for income taxes. Deferred
taxes are recognized for temporary differences between the basis of assets and
liabilities for financial statement and for income tax purposes. Temporary
differences relate primarily to different accounting methods used for
depreciation and amortization of property and equipment and deferred
compensation.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the amounts of sales and expenses during the reporting period.
Actual results could differ from those estimates.

                                       10
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note B - Summary of Significant Accounting Policies (continued):

Revenue Recognition - The Company recognizes revenue consistent with the
provisions of SEC Staff Accounting Bulletin No. 104, "Revenue Recognition",
which sets forth guidelines in the timing of revenue recognition based upon
factors such as passage of title, payments and customer acceptance. Any amounts
received prior to satisfying our revenue recognition criteria will be recorded
as deferred revenue in the accompanying balance sheet. The Company recognizes
revenue from product sales when there is persuasive evidence that an arrangement
exists, when title has passed, the price is fixed or determinable, and the
Company is reasonably assured of collecting the resulting receivable. The
Company's policy is to replace certain products that do not conform to customer
specifications; however, replacements are made at the discretion of the Company
subject to in house product lab analysis. There are no terms or conditions set
forth within the Company's sales contracts that provide for product
replacements. Replacement costs are expensed as incurred.

Reclassifications - Certain amounts in the consolidated financial statements for
prior periods have been reclassified to conform with the current year
presentation.

Regulations - The Company expended approximately $17,974 to maintain compliance
with certain Federal and State and City government regulations relative to the
production of near infrared dyes and specialty chemicals.

Net Income Per Share - Basic net income per share is calculated on the basis of
the weighted average number of shares outstanding during the period, excluding
dilution. Diluted net income per share is computed on the basis of the weighted
average number of shares plus potentially dilutive common shares arising from
the assumed exercise of stock options.

Advertising Costs - Advertising costs, included in operating expenses, are
expensed as incurred. Advertising expenses amounted to $19,861 and $15,591 for
the years ended February 28, 2005 and February 29, 2004, respectively.

                                       11
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note B - Summary of Significant Accounting Policies (continued):

Stock-based Compensation - As permitted by SFAS No. 123 "Accounting for
Stock-Based Compensation," The Company continues to apply intrinsic value
accounting for its stock option plans. Compensation cost for stock options, if
any, is measured as the excess of the quoted market price of the stock at the
date of grant over the amount an employee must pay to acquire the stock. The
Company has adopted disclosure-only provisions of SFAS No. 123 and SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
Amendment of FASB Statement No. 123."

     Deferred charges for options granted to non-employees are determined in
accordance with FAS No. 123 and EITF 96-18 as the fair value of the
consideration or the fair value of the equity instruments issued, whichever is
more reliably measured.

     The weighted average Black-Scholes value of options granted under the stock
plans during the years ended February 28, 2005 and February 29, 2004 was $.10
and $.11, respectively. The fair value of each option grant is estimated on the
date of grant using the Black-Scholes option-pricing model with the following
weighted average assumptions used for grants:

Years Ended February 28 and February 29,         2005        2004
                                                 ----        ----

  Weighted average expected life in years           5           5
  Dividends per share                            0.04        0.03
  Volatility                                     6.0%        6.0%
  Risk-free interest rate                        3.9%        4.1%


                                       12
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note B - Summary of Significant Accounting Policies (continued)

Stock-based Compensation - The Company's pro forma net earnings and pro forma
earnings per share based upon the fair value at the grant dates for awards under
Epolin's plans are disclosed below.

                                                      2005          2004
                                                  -----------   -----------

Net earnings as reported                          $   503,500       592,134

Deduct total additional stock-based employee
compensation cost, net of tax that would
have been included in net earnings under
fair value method                                      32,300        34,050
                                                  ===========   ===========

Proforma net earnings                             $   471,200       558,084
                                                  ===========   ===========

Basic earnings per share:
  As reported                                     $      0.04          0.05
                                                  ===========   ===========
  Proforma                                        $      0.04          0.05
                                                  ===========   ===========

Average common shares outstanding                  11,835,910    11,845,960

Diluted earnings per share:
  As reported                                     $      0.04          0.05
                                                  -----------   -----------
  Proforma                                        $      0.04          0.05
                                                  -----------   -----------

Total diluted common shares outstanding            11,983,455    12,028,051
                                                  ===========   ===========


Note C - Inventories:

                                         2005        2004
                                      ---------   ---------

   Raw materials and supplies         $  48,194      45,960
   Work in process                      245,704     219,337
   Finished goods                       456,518     492,470
                                      ---------   ---------

     Total                            $ 750,416     757,767
                                      =========   =========


                                       13
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note D - Income Taxes:

1.   Federal and State deferred tax assets include:

                                                  2005        2004
                                               ---------   ---------
Temporary differences:
     Accelerated amortization                  $  74,112      87,353
     Deferred compensation                       124,261     145,774
                                               ---------   ---------
               Total                             198,373     233,127

         Current portion                           2,322       3,710
                                               ---------   ---------

Non-current portion                            $ 196,051     229,417
                                               =========   =========


2.   Income tax expense:

                                                  2005        2004
                                               ---------   ---------
     Current:
         Federal                               $ 252,840     250,747
         State                                    63,530      62,361
                                               ---------   ---------

              Total current                      316,370     313,108
                                               ---------   ---------

     Deferred:
         Federal                                  27,480      41,600
         State                                     7,274      10,649
                                               ---------   ---------

              Total deferred                      34,754      52,249
                                               ---------   ---------

                  Total                        $ 351,124     365,357
                                               =========   =========


3.   Reconciliation of income tax at the statutory rate to the Company's
     effective rate:

                                                         2005         2004
                                                      ---------    ---------
     Computed at the statutory rate                   $ 290,572      284,349
     State income taxes (net)                            63,530       62,361
     (Increase) Decrease in deferred tax asset           34,754       52,249
     General business credits                           (26,750)     (24,535)
     Non-deductible items                               (10,982)      (9,067)
                                                      ---------    ---------

               Effective tax                          $ 351,124      365,357
                                                      =========    =========

                                       14
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note E - Economic Dependency:

         A material portion of the Company's business is dependent on certain
domestic customers, the loss of which could have a material effect on
operations. During the year ended February 28, 2005, approximately 50.4% of
sales were to three customers. Two of these customers, located in the Eastern
United States, accounted for 44.0% of sales. During the year ended February 29,
2004, approximately 65.3% of sales were to four customers, two of these
customers, located in the Eastern United States, accounted for 42.0% of sales.


Note F - Rental Income Under Sublease:

     The Company entered into a sublease agreement with a non-related party
effective November 1, 2002 for a five-year term ending October 31, 2007. Under
the terms of the lease, the tenant is to pay a base rent of $36,000 per year. In
addition, the tenant is to reimburse the Company for all costs and expenses
incurred by the Company for improvements to such leased property in excess of
$75,000. The excess amount was recorded on the balance sheet as a note
receivable. Payments on the note were $2,500 a month including interest of 6% a
year. The note was paid in full as of August 31, 2003.


Note G - Treasury Stock:

     Consists of 913,645 shares as of February 28, 2005 at a net cost of
$321,932 and 863,645 shares at a net cost of $292,182 as of February 29, 2004.

The Company purchased 50,000 shares during the year ended February 28, 2005 and
174,000 shares during the year ended February 29, 2004, respectively.


Note H - Acquisitions:

On January 29, 1998, the Company acquired 100% of stock in Epolin Holding Corp.


Note I - Employee Benefits:

Simplified Employee Pension Plan - Effective June 1, 1994, the Company provides
a SAR/SEP plan to its employees as a retirement and income tax reduction
facility. Full time employees are eligible to participate immediately. Employees
may make pre-tax and after-tax contributions subject to Internal Revenue Service
limitations. Company contributions range from three to 5 percent after
completion of one year of service. Employer contributions totaled $40,119 and
$37,568 for the years ended February 28, 2005 and February 29, 2004,
respectively.

                                       15
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004

Note I - Employee Benefits (continued):

Incentive Compensation Plan - On December 1989, the Company approved the 1989
Incentive Compensation Plan for the purpose of attracting and retaining key
personnel. All employees of the Company are eligible to participate in the plan
whereby incentive bonuses are determined by the Board of Directors and payable
in shares of common stock. Shares issued are determined at fifty percent of the
closing bid price, vested, and delivered over a three-year period. During the
year ended February 28, 1999, the Company issued 20,000 shares of common stock
covering a previously awarded bonus to an employee on May 18, 1998.

Stock Option Plan - The Company previously adopted The 1986 Stock Option Plan.
As of April 1996, under the terms of the Plan, options may no longer be granted.
On December 1, 1995, options to acquire up to 490,000 shares of the Company's
common stock were granted. Options exercised for all prior years totaled
455,000. Options totaling 35,000 were cancelled in prior years. There were no
outstanding options as of February 28, 2005.

     The Company adopted the 1998 Stock Option Plan on December 1, 1998. Under
the terms of the plan, the Company reserved 750,000 shares of common stock for
issuance pursuant to the exercise of options to be granted under the Plan, which
do not meet the requirements of Section 422 of the Code. On September 15, 2001,
the Board of Directors increased the reserve to 1,500,000. Options granted
expire five or ten years after the date granted and are subject to a vesting
period as follows: (1) none exercisable prior to the first anniversary of the
date of grant, and (2) each of the options will become exercisable as to 50% of
the shares underlying the option on each of the first and second anniversaries
of the date granted. Options exercised through February 28, 2005 totaled
600,000. Options cancelled for all years totaled 120,000.

     A summary of the status of the Company's 1998 stock option plan as of
February 28, 2005, and the changes during the year ended February 28, 2005 is
presented below:

                                                     Weighted-Average
Fixed Options:                           Shares       Exercise Price
--------------                           ------       --------------

Balance - March 1, 2003                  367,500           $.24
     Granted                             162,000            .30
     Exercised                          (137,500)           .25
                                        --------

Balance - February 28, 2004              392,000            .29
     Granted                                   -              -
     Cancelled                            45,000
     Exercised                           (25,000)           .25
                                        --------

Balance - February 28, 2005              322,000           $.30
                                        ========

Exercisable at February 28, 2005         180,000


                                       16
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FEBRUARY 28, 2005 FEBRUARY 29, 2004


Note I - Employee Benefits (continued):

Stock Option Plan - The following table summarizes information about fixed stock
options outstanding at February 28, 2005:


             Outstanding Options                        Exercisable Options
-----------------------------------------------    ----------------------------
                   Number      Weighted-average      Number
Range of         Outstanding      Remaining        Exercisable  Weighted-average
Exercise Price   at 2/28/05    Contractual Life    at 2/28/05    Exercise Price
--------------   -----------   ----------------    -----------   --------------
        $.25       155,000         1.5 years         155,000          $ .25
         .30        25,000         2.8                25,000            .30
         .35       142,000         9.0                     -            .35


There are 458,000 options attributable to future grants.


Stock Option and Stock-Based Employee Compensation - On November 1, 2004, the
Company entered into an "Option Agreement and Investment Agreement" with an
employee, the terms of which are as follows:

     1. Stock Option - An option to purchase 100,000 shares of common stock at
     an exercise price equal to the fair market value of the Company's common
     stock at the date of grant. The option is exercisable only after the
     completion of the second year of employment.

     2. Stock-based Employee Compensation - A grant of 100,000 shares of
     restricted common stock one year from the date of the agreement, provided
     the employee is then employed by the Company.


Note J - Segment Reporting:

The Company currently operates in a single operating segment. In addition,
financial results are prepared and reviewed by management as a single operating
segment. The Company continually evaluates its operating activities and the
method utilized by management to evaluate such activities and will report on a
segment basis if and when appropriate to do so.

                                       17
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FEBRUARY 28, 2005 FEBRUARY 29, 2004


Note J - Segment Reporting (continued):

Sales by geographic area are as follows:

                                           Years Ended
                                    February 28,   February 29,
                                         2005         2004
                                     -----------   -----------
     United States                   $ 2,422,079     2,461,461
     Asia                                307,244       167,462
     Europe                              148,942       102,104
     Other nations                         1,835         2,865
                                     -----------   -----------

       Total                         $ 2,880,100     2,733,892
                                     ===========   ===========

Two customers, located in the Eastern United States, accounted for more than 10%
of revenues from continuing operations. One customer accounted for 24.1% of
sales of which 14.1% was near infrared dyes and 10% was security inks. The other
customer accounted for 19.9% of sales of near infrared dyes.

Long-lived assets include net property and equipment. The Company had long-lived
assets of $644,343 and $589,932 located in the United States at February 28,
2005 and February 29, 2004, respectively.


Note K - Accrued Expenses:

Accrued expenses consisted of the following as of February 28, 2005 February 29,
2004, respectively:

                                         2005         2004
                                     -----------   -----------
     Salaries and wages              $    21,690        13,769
     Employment agreement                172,806       150,364
     Professional fees                    15,000        10,000
     Improvements                         29,847             -
     Property taxes                        4,071         3,957
                                     ===========   ===========

       Total accrued expenses        $   243,414       178,090
                                     ===========   ===========

                                       18
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FEBRUARY 28, 2005 FEBRUARY 29, 2004


Note L - Earnings per Share:

Basic earnings per share are computed on the basis of the weighted average
number of shares of common stock outstanding during the period. Diluted earnings
per share is computed on the basis of the weighted average number of shares of
common stock plus the effect of dilutive potential common shares outstanding
during the period using the treasury stock method. Dilutive potential common
shares include outstanding stock options. The components of basic and diluted
earnings per share are as follows:

                                                        Years Ended
                                                 February 28,  February 29,
                                                 ------------  ------------
                                                     2005          2004
                                                 ------------  ------------
  Basic Earnings Per Common Share:

  Net income                                     $   503,500       592,134

  Average common shares
    outstanding                                   11,835,910    11,845,960
                                                 ===========   ===========

  Basic earnings per
    common share                                 $      0.04          0.05
                                                 ===========   ===========

  Diluted Earnings Per Common Share:

  Net income                                     $   503,500       592,134
                                                 ===========   ===========

  Average common shares
    outstanding                                   11,835,910    11,845,960

  Common shares issuable with respect
  to options issued to employees
  with a dilutive effect                             147,545       182,091
                                                 -----------   -----------

  Total diluted common shares
    outstanding                                   11,983,455    12,028,051
                                                 ===========   ===========

  Diluted earnings per
    common share                                 $      0.04          0.05
                                                 ===========   ===========

                                       19
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FEBRUARY 28, 2005 FEBRUARY 29, 2004


Note M - Commitments and Contingencies:

     Losses for contingencies such as litigation and environmental matters are
recognized in income when they are probable and can be reasonably estimated.
Gain contingencies are not recognized in income.

Lease Obligations:

     The company leases its real estate under an operating lease with a related
party. The lease effective November 1, 1996 was for a term of five (5) years
with three (3) five (5) year options at annual rentals of $97,740. The Cost of
Living Index adjustment effective with the second year has been waived by the
subsidiary. Rent includes reimbursed insurance costs. Generally, management
expects that the lease will be renewed in the normal course of business.

     Rental expense charged to operations, eliminated in consolidation, amounted
to $97,740 for the years ended February 28, 2005 and February 29, 2004,
respectively.

Future minimum payments for the current option period:

       Fiscal years ending February:
       -----------------------------
                    2006                        $97,740
                    2007                         97,740
                    2008                         97,740
                    2009                         65,160


Deferred Compensation - On December 29, 1995, the Company entered into a
deferred compensation agreement with an officer whose additional annual
compensation of $19,645 plus interest is deferred until he reaches age 65 or is
terminated. The obligation is funded by a life insurance policy. Annual payments
to the officer of $32,000 for ten consecutive years shall commence the first day
of the month following his 65th birthday or termination.

     In connection with this agreement, deferred compensation of $24,080 was
charged to selling, general and administrative expenses for the years ended
February 28, 2005 and February 29, 2004, respectively.

     On January 1, 1996, the Company entered into a deferred compensation
agreement with another officer wherein $25,000 per year was accrued. This
agreement, with unfunded accruals of $79,041 terminated on June 25, 1998, and
will be paid upon retirement in either equal consecutive monthly payments for a
period not exceeding sixty (60) months or a single payment equal to the then
present value of the account, said selection to be at the discretion of the
Company.

                                       20
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note M - Commitments and Contingencies (continued):

Deferred Compensation - Effective March 1, 1999, the Company adopted deferred
compensation agreements for two of its former employees. Under the term of the
agreement, each employee would receive one twenty sixth (1/26) of fifty percent
(50%) of their annual salary (excluding bonuses) as of the date of retirement.
Each has a death-vesting schedule. These agreements are no longer operative as a
result of the settlement of the lawsuit, which had been instituted by such two
former employees, the terms of which are detailed under Note Q.

Employment Agreements - Effective March 1, 1999, the Company entered into
ten-year employment agreements with officers/directors:

     Murray S. Cohen, PhD, Chairman of the Board and Chief Executive Officer -
To be paid an annual salary of not less than the greater of his annual base
salary in effect immediately prior to the effective date of the agreement or any
subsequently established annual base salary. He is to receive 2.00% on gross
annual sales of no more than $3,000,000, effective with the year ended February
28, 2001, increasing by 0.25% a year during the term of the agreement.

     James Ivchenko, President - To be paid an annual salary of not less than
the greater of his annual base salary in effect immediately prior to the
effective date of the agreement or any subsequently established annual base
salary. He is to receive 1.5% on gross annual sales of no more than $3,000,000,
effective with the year ended February 28, 2001, increasing by 0.25% a year
during the term of the agreement.

     Accrued compensation included in selling, general and administrative as of
February 28, 2005 and February 29, 2004 was $172,806 and $150,364, respectively.

Note N - Research and Development:

     The Company has developed substantial research and development capability.
The Company's efforts are devoted to (i) developing new products to satisfy
defined market needs, (ii) providing quality technical services to assure the
continued success of its products for its customers' applications, (iii)
providing technology for improvements to its products, processes and
applications, and (iv) providing support to its manufacturing plant for cost
reduction, productivity and quality improvement programs. Expenditures for
Company sponsored product research and product development of $407,705 and
$374,348 were included in cost of sales for the years ended February 28, 2005
and February 29, 2004, respectively. Expenditures in 2006 are projected to
remain at approximately the same level as in 2005.

                                       21
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2005 AND FEBRUARY 29, 2004


Note O - Environmental Matters

     The Company's past and present daily operations include activities, which
are subject to extensive federal, and state environmental and safety
regulations. Compliance with these regulations has not had, nor does the Company
expect such compliance to have, any material effect upon expected capital
expenditures, net income, financial condition or competitive position of the
Company. The Company believes that its current practices and procedures comply
with applicable regulations. The Company's policy is to accrue environmental and
related costs of a non-capital nature when it is both probable that a liability
has been incurred and that the amount can be reasonably estimated. No such
amounts have been accrued in these statements.


Note P - Stock Dividends:

     In July 2003, the Company's Board of Directors declared a cash dividend of
two cents per share on all common shares outstanding. The dividend was paid on
August 29, 2003 to shareholders of record August 15, 2003. In February 2004, the
Company's Board of Directors declared a cash dividend of two cents per share on
all common shares outstanding. The dividend was paid on February 27, 2004 to
shareholders of record February 23, 2004.


Note Q - Litigation:

     In December 2000, two individuals (each a former director and former
employee of the Company) instituted suit in the Superior Court of New Jersey,
Bergen County-Law Division, against the Company and the other directors of the
Company alleging claims pursuant to their past employment as well as a
derivative claim, as minority stockholders. Such claims included breach of
contract, civil rights, age discrimination, wrongful termination, infliction of
emotional distress and a shareholder derivative claim. In June 2003, the Company
executed an agreement, which settled the lawsuit, and the action has been
dismissed. The settlement included a lump sum payment to the plaintiffs in the
amount of $312,000. In addition, the Company agreed to buy back 126,500 shares
owned by one of the plaintiffs for the aggregate amount of $69,575 ($0.55 per
share) as treasury stock. The Company has been reimbursed a portion of the
settlement payments from its insurance company in the amount of $118,560.

Included in the selling, general and administrative expenses for the year ended
February 28, 2004 is the lump sum payment of $193,440.

                                       22