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, 2002

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

       Commission file number 0-17741

                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:
$2,553,487

As of February 28, 2002, the aggregate market value of the
Common Stock held by non-affiliates of the Issuer (6,088,655
shares) was approximately $4,627,000.  The number of shares
outstanding of the Common Stock (no par value) of the Issuer as
of the close of business on February 28, 2002 was 11,881,855
(excluding 647,145 treasury shares).

Documents Incorporated by Reference:  None

<PAGE>

PART I

Item 1.        Description of Business.

Introduction

     Epolin, Inc. ("Epolin" or the "Company") is a
manufacturing and research and development company which was
incorporated in the State of New Jersey on May 8, 1984.  The
Company is principally  engaged in the commercial development,
production and sale of near infrared dyes to the optical
industry for laser protection, for welding, for security inks
and other dye applications as well as specialty chemicals.  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.

     In April 1989, Epolin successfully completed an initial
public offering of its securities pursuant to a public offering
generating net proceeds of approximately $1,950,000.
Simultaneously, upon closing of the offering, Epolin acquired
100% of the stock of Accort Labs, Inc. ("Accort"), then an
affiliated entity.

     Commencing upon completion of the Company's public
offering through January 1990, the Company's efforts were
primarily devoted to the renovation and completion of its
manufacturing  and office facility. The principal product(s)
that the Company developed were expanding polymeric coatings.
The Company has since curtailed this effort due primarily to
the high cost of the product and the lower price commanded by
similar products now sold into this maturing market. The
Company has more recently established itself as a supplier of
near infrared dyes as well as other specialty chemical
products. It sells its dyes primarily to lens manufacturers who
serve as the suppliers to the laser protection eyewear market
and the welding market.

     Since completion of the Company's public offering, the
Company's revenues had been 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 has
emphasized the development, manufacture and sale of these dyes
to the optical industry.

     The Company's prior emphasis on the expanding monomer
technology has been curtailed. The expanding monomers failed to
reach any significant level of sales and sales growth because
the price of UV cured coatings, a major application for  the
technology, had fallen dramatically and the market could not
sustain the higher pricing for the Company's product. Research
and development on expanding monomer applications was therefore
no longer relevant and the Company became fully committed to
specialty chemical manufacture especially to near infrared dye
development, manufacture and sales. This part of the product
line has proven to be a successful one to pursue in that the
sale of  these dyes had a growth rate of approximately 15% to
20% per year for the last seven years. No assurance can be
given that such trend will continue. The Company believes that
its future lies with dye technology and is formulating long
range plans to exploit new applications for both the near
infrared dyes as well as other dyes. Paralleling the growth of
the dye business, the Company has maintained 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.  The Company does not, however, expect
its specialty chemical business to grow.   It has instead, as
mentioned above, made a strong research and development
commitment to the growth of the specialty dye business and
products which use the dyes such as security inks.

     In July 1997, the Board of Directors of Epolin approved
a plan of merger (the "Plan") wherein Epolin's wholly-owned
subsidiary, Accort, would merge into Epolin.  The effective
date of the Plan was deemed to have occurred as of the
beginning of fiscal 1998.  The merger was approved by the State
of New

<PAGE>


Jersey as of December 30, 1998.  As a result, Accort's
assets, liabilities and stockholders' equity as of March 1,
1997 were transferred to Epolin.

     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.

Infrared Dyes

     The Company's business is heavily weighted towards the
development, manufacture and sale of near infrared dyes.
Applications for these dyes cover several markets which are
discussed in the following subsections.

     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. 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. The Company 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

     Certain of the near infrared dyes absorb very little of
the visible spectrum. These can be used at low concentration in
inks and paints and cannot be easily detected. However, when
viewed by reflection of an infrared laser or lamp, the presence
of dye is easily seen as a black marking. Mechanical "readers"
can be used to detect the presence of dyes by responding with a
simple "go, no-go" signal.  Recently, the Company

<PAGE>

embarked upon
the development of security inks.  It has successfully
introduced silk screen inks to the marketplace that management
believes can be used for labels, official documents and credit
cards.  The first step towards vertical integration and
diversification of the product line has been taken with the
introduction of near infrared dyes in security inks.  The
initial sales have been for silk screen inks used in credit
cards.  Management anticipates that this  will be followed by
security jet inks and water based inks.  Management believes
that the industrial security and currency marking is
potentially a large volume application for these dyes.  No
assurance can be given that the Company will be able to
successfully develop this market.

     Dyes for Filters

     A smaller market exists for filters that block certain
frequencies in the near infrared and visible spectrum. Most of
the inquiries 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 high value added market is under development.
No assurance can be given that the Company will be able to
successfully develop this market.

     Dyes for Sun Protection

     There have been various reports that near infrared
radiation causes slow but long term damage to the eye leading
to premature cataracts.  Certain customers incorporate the
Company's dyes into premium sunglasses to sell at premium
pricing.  An additional value in sunglasses containing near
infrared dyes is that there is a noticeable heat reduction on
the eye which allows long term use in the sun.  Management
believes that this reduces problems associated with discomfort
due to perspiration around the eye.

     Dyes for Heat Shields

     It has been shown in experimental and theoretical
studies that a window containing near infrared dyes is capable
of reducing the internal heat load of a structure by 40 to 50
percent. This type of  application of infrared dyes is reported
in use for sun roofs of automobiles in Japan. The specific
advantage offered by near infrared dyes is heat reduction
coupled with good visible transparency. This allows high
visibility while, at the same time, effectively blocking the
frequencies responsible for transporting heat. Management
believes near infrared dyes can be effectively used in a wide
variety of applications  as heat shields.  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. Of
particular concern to the Company is the need for  long term
performance which, at a minimum, requires a working lifetime of
seven years exposure to  direct sunlight. By developing dyes of
greatly improved thermal and ultraviolet stability, the Company
believes it can meet the long term exposure requirements for
heat shields.  The Company further believes that of particular
importance is the ability of these new dyes to be used in the
manufacture of extruded engineering plastic products.  Known
near infrared dyes do not possess the thermal stability to
survive processing of large extruded structures.  The Company
believes that it can demonstrate that these new dyes offer a
greater degree of freedom in plastics processing and that this
can represent an important developing market.  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.

<PAGE>

     Dyes for Interlayer and Laminates

     One of the most abrasion resistant surfaces is that of
glass.  The Company has found that the interlayer used for
glass to glass laminates can incorporate dyes and bond to the
glass strongly.  These laminated glass structures can perform
like the plastic heat shields described above.  The Company
believes that such laminated glass structures have the added
advantage of abrasion resistance and in automotive
applications, are shatter-proof.  The Company is pursuing
markets for laminates as shatter-proof windshield and sun
roofs.  No assurance can be given that the Company will find a
successful developer in 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
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.

<PAGE>

     During the years ended February 28, 2002 and 2001, the
Company expended approximately $27,400 and $23,600,
respectively, 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, 2002, 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. In this regard, the Company has undertaken a dye
synthesis effort to develop and produce dyes with greatly
improved thermal stability.  These dyes are now a part of the
Company's product line and sales have started to grow.  There
is available to the Company the plastic processing equipment
similar to that used by the Company's customers to extrude and
injection mold plastic-dye formulations. Management expects
that this will allow the Company to better understand its
customer's problems and to design solutions.

     During the years ended February 28, 2002 and 2001, the
amounts  spent on research and development activities were
approximately $237,000 and $288,000, respectively.  All
research and development costs are borne by the Company.

Competition

     The Company generally experiences, in management's
opinion, limited competition in all areas of its business from
some companies many of which are larger and better financed.
At the present time, however, the Company believes that it has
a  unique position as a supplier of near infrared dyes.
Management believes that the only other suppliers of these dyes
use them as a vehicle to sell other products.  Management
believes that these companies will only sell the dye to
purchasers of their resins or to those who buy their formulated
resin or their finished lenses. Such companies do not sell the
pure dye which is done by the Company. Insofar as the major
profit incentive comes from the manufacture and sale of
finished product, Management believes those companies that have
the capability to formulate dyes in resin and injection mold
the formulated resin, have a strong incentive to purchase the
dye without any other requirements.  However, in the future,
other dye manufacturers may change their policy and sell dye
directly.  This will present the Company with a challenge to
its pricing structure. However, because of the Company's low
overhead, it is believed that such a challenge can be met
successfully.

     The Company has also invested resources in improved
processes for the manufacture of dyes so that the Company can
consider itself a low cost producer. The research and
development program has introduced a new family of near
infrared dyes that show a marked improvement in thermal and
light stability over

<PAGE>

existing dyes. The Company believes that
this new family of dyes will allow it to maintain a strong
position as a dye supplier for laser safety and welding
optical wear.

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. 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. It has, however, patented a class of dyes
that it developed.  In connection therewith, a patent was
granted by the U.S. Patent Office (U.S. Patent 5,686,639) for a
new class of quinone diimmonium salts in November 1997.  Other
patent disclosures may be submitted in the future.  No
assurance can be given that other patents with regard to the
foregoing will be issued. The Company has allowed its patent
position on two patents it owns on Expanding Monomers to lapse
by not paying the maintenance fees. This will have no material
impact on the Company's business since the Company decided
previously to curtail the development of this technology.  The
Company intends to continue to evaluate the need for a patent
program on new dyes, especially in those instances where
composition of matter claims can be obtained. There can be no
assurance that these patents will be of commercial benefit to
the Company, or otherwise offer the Company protection from
competing products. Although the issuance of a patent entitles
the owner to a statutory presumption of validity, the
presumption is not conclusive as to validity or the scope of
enforceability  of the claims therein. The enforceability and
validity of a patent can be challenged by litigation after its
issuance and, if the outcome of litigation is adverse to the
owner of the patent, other parties may be free to use the
subject  matter covered by the patent. Moreover, the cost of
defending these patents against infringement could require
substantial expenditures which the Company may decide it is
unable to afford. In addition, persons or entities may have
filed patent applications and may have been issued patents on
inventions or otherwise possess proprietary rights to
technologies potentially useful to the Company. 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, 2002, approximately 57.6% of sales were to
four customers.  Three of these customers, located in the
Eastern United States, comprised 40.1% of sales at February 28,
2002. During the year ended February 28, 2001, approximately
52.4% of sales were to four customers.  Three of these
customers, located in the Eastern United States, comprised
43.8% of sales at February 28, 2001.

<PAGE>

Employees

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

Forward-Looking Statements

     This Form 10-KSB contains certain forward-looking
statements and information that reflect the Company's
expectations about its future operating results, performance
and opportunities that involve substantial risks and
uncertainties.  When used in this Form 10-KSB, the words
"anticipate", "believe", "estimate", "plan", "intend" and
"expect" and similar expressions, as they relate to Epolin,
Inc. for its management are intended to identify such forward-
looking statements.  These forward-looking statements are based
on information currently available to the Company and are
subject to a number of risks, uncertainties, and other factors
that could cause the Company's actual results, performance,
prospects and opportunities to differ materially from those
expressed in, or implied by, these forward-looking statements.
Factors that could cause or contribute to such differences
include, but are not limited to, the following:

     -    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.

     -    Our customers are concentrated, so the loss of
one or more key customers could significantly reduce our
revenues.  In fiscal 2002, approximately 57.6% of our revenues
were from four customers.  The loss of any of these customers
could have a material adverse effect on the Company.

     -    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.

     -    Although the Company generally experiences, in
management's opinion, limited competition in all areas of its
business, there are other dye companies many of which are
larger and better financed. Such companies do not, however,
sell the pure dye which is done by the Company.  In the future,
other dye manufacturers may change their policy and sell dye
directly.  This will present the Company with a challenge to
its pricing structure.

     -    Manufacturers of chemical products are subject
to extensive Federal and State environmental regulations.

     -    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.

     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

<PAGE>

the date of this Form 10-KSB or
for any other reason.

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.  In October 1996, Epolin Holding
Corp. ("Epolin Holding"), a company formed by Dr. Cohen and Mr.
Ivchenko, purchased the property for the sum of $450,000.
Simultaneously with the closing, the Company entered into
substantially similar leasing arrangements with Epolin Holding
as then existed with the former owner of the property.  Such
new lease, effective November 1, 1996, was for a term of five
years with three five year options with annual rent of $97,740
subject to annual adjustments based on increases in the
Consumer Price Index.   Such  rent  includes  real estate taxes
and insurance expenses.  In January 1998, Epolin Holding became
a wholly-owned subsidiary of Epolin.

Item 3.        Legal Proceedings.

     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
include breach of contract, civil rights, age discrimination,
wrongful termination, infliction of emotional distress and a
shareholder derivative claim.  Such litigation is currently in
the discovery stage.  The Company believes such claims are
without merit and is defending  such matter vigorously.  While
the outcome of this action cannot be predicted at this time
taking into account the uncertainty and risks inherent in any
litigation, management believes, based on its understanding and
evaluation of the relevant facts and circumstances, that such
action will not likely have a material adverse effect on its
results of operations, financial position or cash flows.  Other
than the foregoing matter, there are no other 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.

     (a)  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.

<PAGE>


Period                                   Bid Prices

Fiscal year ended February 28, 2001:   High       Low

March 1, 2000 to May 31, 2000          $.8125     $.3125
June 1, 2000 to Aug. 31, 2000          $.40       $.25
Sept. 1, 2000 to Nov. 30, 2000         $.44       $.29
Dec. 1, 2000 to Feb. 28, 2001          $.30       $.15

Fiscal year ended February 28, 2002:   High       Low

March 1, 2001 to May 31, 2001          $.42       $.14
June 1, 2001 to Aug. 31, 2001          $.47       $.25
Sept. 1, 2001 to Nov. 30, 2001         $.51       $.30
Dec. 1, 2001 to Feb. 28, 2002          $.85       $.53

     (b)  Holders.

     As of February 28, 2002, there were approximately 310
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".

     (c)  Dividends.

     During the fiscal quarter ended August 31, 2001, the
Company declared a $0.03 per share dividend which was paid on
June 29, 2001.  This represented the first time that a cash
dividend was paid by the Company.  In addition, the Company
subsequently declared a $0.04 per share dividend which was paid
on February 28, 2002.

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

     The following discussion of the Company's financial
condition and results of operations is based on the Company's
Consolidated Financial Statements and the related notes
thereto.

Overview

     Epolin, Inc. is a manufacturing and research and
development company which was incorporated  in the State of New
Jersey in May 1984.   The Company is principally  engaged in
the commercial development, production and sale of near
infrared dyes to the optical industry for laser protection, for
welding, for security inks and other dye applications as well
as specialty chemicals.

Results of Operations

     Fiscal 2002 Compared to Fiscal 2001

     During the year ended February 28, 2002, the Company
reported sales of approximately $2,553,000 as compared to sales
of approximately $2,330,000, an increase of approximately
$223,000 or 9.6%.  This increase in sales was primarily
attributable to an increase in sales of the Company's near
infrared absorbing

<PAGE>

dyes, and increases in sales of new dyes for
new applications.

     Operating income for fiscal 2002 increased to
approximately $1,410,000 as compared to operating income of
approximately $916,000 for fiscal 2001, an increase of
approximately $494,000.  This change resulted primarily from an
increase in sales and a relatively minor decrease in cost of
sales, offset by a minor increase in selling, general and
administrative expenses.  Cost of sales in fiscal 2002 was
approximately $684,000 compared to cost of sales in fiscal 2001
of approximately $699,000.  In fiscal 2002, the Company's
selling, general and administrative expenses were approximately
$726,000 as compared to selling, general and administrative
expenses of approximately $714,000 for the fiscal year ended
February 29, 2001.

     During the fiscal year ended February 28, 2002, the
Company realized approximately $50,000 in interest income as
compared to approximately $74,000 in interest income for the
prior year.  This decrease resulted primarily from a decrease
in available cash resulting primarily from the payment of the
cash dividend in August 2001.

     During the fiscal year ended February 28, 2002, the
Company reported income before taxes of approximately
$1,193,000 as compared to income before taxes of approximately
$990,000 for the fiscal year ended February 29, 2001.  Net
income after taxes was approximately $771,000 or $.07 per share
for fiscal 2002 as compared to net income after taxes of
approximately $835,000 or $.07 per share for fiscal 2001.  For
fiscal 2002, the Company's income taxes were approximately
$422,000 as compared to approximately $155,000 for fiscal 2001.
Such amounts reflect federal and state taxes for fiscal 2002 of
approximately $472,000 reduced by deferred taxes of
approximately $50,000 for fiscal 2002 compared to federal and
state taxes for fiscal 2001 of approximately $248,0000 reduced
by deferred taxes of approximately $93,000 for fiscal 2001.

     Management believes that future business look promising.
The Company  is confident that it can continue to take
advantage of its market position in terms of availability of
dyes and their performance.  Management believes that the
Company's newest products, such as security inks, came along
just as the market recognized the need for stronger security
measures.  Credit cards, proprietary packaging, official
documents and personnel badges can use the near infrared inks
the Company makes because they provide a convenient and rapid
addition to the security features already in place.  No
assurance can be given, however, that this trend  will continue
or that the Company will be able to successfully penetrate this
market.

     Fiscal 2001 Compared to Fiscal 2000

     During the year ended February 28, 2001, the Company
reported sales of approximately $2,330,000 as compared to sales
of approximately $1,927,000, an increase of approximately
$403,000 or 20.9%.  This increase in sales was primarily
attributable to an increase in sales of the Company's near
infrared absorbing dyes, and increases in sales of new dyes for
new applications.

     Operating income for fiscal 2001 increased to
approximately $916,000 as compared to operating income of
approximately $680,000 for fiscal 2000, an increase of
approximately $236,000.  This change resulted primarily from an
increase in sales as well as decreases in selling, general and
administrative expenses.  Cost of sales in fiscal 2001 was
approximately $699,000 compared to cost of sales in fiscal 2000
of approximately $501,000.  In fiscal 2001, the Company's
selling, general and administrative expenses were approximately
$714,000 as compared to selling, general and administrative
expenses of approximately $746,000 for the fiscal year ended
February 29, 2000.

<PAGE>

     During the fiscal year ended February 28, 2001, the
Company realized approximately $74,000 in interest income as
compared to approximately $50,000 in interest income for the
prior year.  This increase resulted primarily from increases in
available cash in fiscal 2001.

     During the fiscal year ended February 28, 2001, the
Company reported income before taxes of approximately $990,000
as compared to income before taxes of approximately $730,000
for the fiscal year ended February 29, 2000.  Net income after
taxes was approximately $835,000 or $.07 per share for fiscal
2001 as compared to net income after taxes of approximately
$380,000 or $.03 per share for fiscal 2000.

Liquidity and Capital Resources

     On February 28, 2002, the Company had working capital of
approximately $2,334,000, an equity to debt ratio of
approximately 4.69 to 1, and stockholders' equity of
approximately $2,833,000.  On February 28, 2002, the Company
had approximately $1,518,000 in cash and cash equivalents,
total assets of approximately $3,437,000 and total liabilities
of approximately $604,000.

     Net cash used by financing activities was approximately
$773,000 for year ended February 28, 2002 which was primarily
the result of dividends paid of approximately $823,000,
partially offset by proceeds received totaling approximately
$66,000 from the issuance of Common Stock in connection with
the exercise of certain stock options.

     The Company believes that its available cash, cash flow
from operations and projected revenues will be sufficient to
fund the Company's operations for more than the next 12 months.


     The Company anticipates that it will incur in fiscal
2003 approximately $50,000 in renovation costs to its facility
in Newark, New Jersey in order to expand research and
development activities.  Other than the foregoing, the Company
does not anticipate making any other significant additional
capital expenditures in the immediate future as it believes its
present machinery and equipment, in conjunction with the above
mentioned renovations, will be sufficient to meet its near term
needs.

     Inflation has not significantly impacted the Company's
operations.

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, 2002, a total of 30,000 shares were repurchased at a
cumulative cost of $14,837.  Under a previous stock repurchase
program authorized in March 1998, which permitted the Company
to repurchase up to $150,000 of the Company's outstanding
shares of common stock, the Company had repurchased from April
1998 through December 2000 a total of 574,700 shares at a
cumulative cost of $148,641.

     During the fiscal quarter ended August 31, 2001, the
Company declared a $0.03 per share dividend which was paid on
June 29, 2001.  This represented the first time that a cash
dividend was paid by the

<PAGE>

Company.  In addition, the Company
subsequently declared a $0.04 per share dividend which was paid
on February 28, 2002.

Item 7.        Financial Statements.

     See the Consolidated Financial Statements annexed to
this report.

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

     None.

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
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      76   Chairman of the          1984
                          Board, Chief Executive
                          Officer, Secretary
                          and Director

James Ivchenko       62   President and Director   1993

Claire Bluestein     75   Director                 1984

Morris Dunkel        73   Director                 1984

James R. Torpey, Jr. 51   Director                 2001

Peter Kenny          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.

<PAGE>

     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.

     CLAIRE BLUESTEIN has served as Director of the Company
since June 1984.  Since 1999, Dr. Bluestein has been retired.
Prior thereto, she was president and sole shareholder of Captan
Associates, Inc., a company engaged in the development of
materials for commercial applications of radiation curing
technology.  Dr. Bluestein has been issued several patents by
the United States Department of Commerce, Trademark and Patent
Offices and has published a variety of chemistry related
articles.  Dr. Bluestein received her Bachelor of Arts Degree
from the University of Pennsylvania in 1947.  In 1948 she
received a Master of Science Degree and in 1950 a Ph.D. in
Organic Chemistry from the University of Illinois.

     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 has been  Director of
Distributed Technologies at GPU Energy, located in New Jersey,
since January 2001.  From June 1995 through December 2000, Mr.
Torpey was Director of Strategic Initiatives at GPU Service
Corp. and Director of Technology Ventures at GPU International.
 He is currently Chairman of the Board of the Solar Electric
Power Association and President and member of the Board of
Directors of GPU Solar Inc., a joint venture company of GPU and
AstroPower, Inc.  He is also a member of the Board of Directors
of the Morris County Business and Education Together
Foundation.

     PETER KENNY has served as  Director of the Company since
July 2001.  Mr. Kenny has been Senior Vice President-Business
Banking Division of Independence Community Bank since July
1999.  Prior thereto, and from September 1991 to July 1999, he
was Senior Vice President and Senior Loan Officer of Broad
National Bank which was acquired by Independence Community Bank
in July 1999.

<PAGE>

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, 2002, February 28, 2001 and February
29, 2000, of those persons who were, at February 28, 2002 (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        2002      $204,356(1)(3)  $31,000
Chairman of the        2001      $177,290(1)(3)  $29,000
Board and Chief        2000      $127,874(3)     $20,000
Executive Officer


James Ivchenko         2002      $186,864(2)(3)  $25,900
President              2001      $162,318(2)(3)  $24,000
                       2000      $123,502(3)     $15,000


                          Long-Term
                          Compensation

                                   Restricted     Shares
Name and Principal      Fiscal     Stock          Underlying
Position                Year       Awards         Options

Murray S. Cohen         2002       0              50,000
Chairman of the         2001       0               0
Board and Chief         2000       0               0
Executive Officer

James Ivchenko          2002       0              50,000
President               2001       0               0
                        2000       0               0


(1)  Includes additional compensation of $52,416 and $38,400
     for 2002 and 2001, respectively, due to Murray S. Cohen
     based upon the Company's sales for fiscal 2001 and 2000
     paid in fiscal 2002 and 2001, respectively, as
     determined under his employment contract.  Does not
     include, however, additional compensation due to Dr.
     Cohen based upon the Company's sales for fiscal 2002 as
     determined under his employment contract which will be
     paid in fiscal 2003 which will be in the amount of
     $63,837.  Also, does not include $49,948 paid to Dr.
     Cohen in fiscal 2001 for previously accrued salary.

(2)  Includes additional compensation of $40,768 and $28,905
     for 2002 and 2001, respectively, due to James Ivchenko
     based upon the Company's sales for fiscal 2001 and 2000
     paid in fiscal 2002 and 2001, respectively, as
     determined under his employment contract.  Does not
     include, however, additional compensation due to Mr.
     Ivchenko based upon the Company's sales for fiscal 2002
     as determined under his employment contract which will
     be paid in fiscal 2003 which will be in the amount of
     $51,070.

(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.

<PAGE>

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 expire on December 1, 2005.  In fiscal 2002, options to
acquire 185,000 shares of the Company's Common Stock were
exercised unde 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 connection therewith, the
Company repurchased 120,000 of such shares which were acquired
upon exercise. In addition, options to acquire 35,000 shares
under the 1986 Plan have lapsed.  As of February 28, 2002,
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, 2002, options to
acquire 855,000 shares of the Company's Common Stock have been
granted under the 1998 Plan and 645,000 options were available
for future grant.  To date, options to acquire 400,000 shares
of the Company's Common Stock have been exercised under the
1998 Plan.  The Company has repurchased 12,500 shares which
were acquired upon exercise.

     The following tables set forth certain information with
respect to stock options granted to the persons named in the
Summary Compensation Table during the fiscal year ended
February 28, 2002.

        Option Grants in Fiscal 2002

             Individual Grants

                   Number of      Percent of Total
                   Securities     Options Granted
                   Underlying     to             Exercise or
                   Options        Employees in   Base Price
Name               Granted        Fiscal Year    ($/Sh)

Murray S. Cohen     50,000         13.2%          $.25
James Ivchenko      50,000         13.2%          $.25


                    Market
                    Price
                    on
                    Date of        Expiration
Name                Grant(1)       Date

Murray S. Cohen     $19,750        9/15/2006
James Ivchenko      $19,750        9/15/2006
_______________________

(1)  Based on the average of the closing bid and asked prices
     of the Company's Common Stock on the date of grant.  The
     actual value, if any, an optionee will realize upon
     exercise of an option will depend on the excess of the
     market value of the Common Stock over the exercise price
     on the date the option is exercised.

<PAGE>


     The following table set forth certain information as to
each exercise of stock options during the year ended February
28, 2002, by the persons named in the Summary Compensation
Table and the fiscal year-end value of unexercised options:

Aggregated Option Exercises in Fiscal 2002
and Year-End Option Value

                                      Number of Securities
                Shares                Underlying Unexercised
                Acquired              Options at February 28, 2002
                On         Value
                Exercise   Realized(1) Exercisable Unexercisable

Murray S. Cohen 150,000      $49,875     0        50,000
James Ivchenko   150,000     $49,875     0        50,000

                   Value of Unexercised
                   In-the-Money Options
                   at February 28, 2002(2)

                 Exercisable Unexercisable

Murray S. Cohen       $0      $25,500
James Ivchenko        $0      $25,500
_______________________

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

(2)  Based on the average of the closing bid and asked prices
     of the Company's Common Stock as of February 28, 2002,
     minus the exercise price, multiplied by the number of
     shares underlying the options.  The amounts reflected in
     this table may never be obtained.

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. The
obligation is being funded with a life insurance policy owned
by the Company.

     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.

<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 Company has also entered into deferred compensation
agreements with Chester C. Swasey and Abdelhamid A.H. Ramadan,
former employees and directors of the Company.  These
agreements provide for annual payments of 50% of each
employee's salary before bonuses at his respective retirement
dates, to be paid in biweekly installments for 10 years.
Management  has elected not to provide any additional funding
for either employee subsequent to the date at which each of the
two employees were no longer employed with the Company.

     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.

     The following table sets forth, as February 28, 2002,
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 individually, (iii) all
officers and directors of the Company as a group:

                            Amount and Nature of   Percent
Name                        Beneficial Ownership   of Class

Murray S. Cohen(1)*                2,845,958      24.0%
James Ivchenko(2)*                 1,739,587      14.6%
Claire Bluestein(3)*                 970,155       8.2%
Morris Dunkel(3)*                    225,000       1.9%
James R. Torpey, Jr.(3)*              12,500        **
Peter Kenny(3)*                           -          -
Santa Monica Partners, L.P.(4)       670,930       5.6%

<PAGE>


All Officers and Directors
as a Group (6 persons)             5,793,200      48.8%


*    The address for each is 358-364 Adams Street, Newark,
     New Jersey 07105.

**   Less than 1%.

(1)  Includes 1,845,958 shares held by Dr. Cohen and
     1,000,000 shares owned by three grandchildren of Dr.
     Cohen, which shares are held by Dr. Cohen's daughters as
     custodian.  Dr. Cohen holds a proxy with respect to such
     shares which proxy may be revoked at any time and unless
     revoked shall terminate on January 31, 2004.  As a
     result, Dr. Cohen may be deemed to be the beneficial
     owner of such shares.  Does not include 50,000 shares
     which may be acquired upon exercise of options granted
     under the 1998 Plan which options are not exercisable
     within 60 days.

(2)  Includes 980,000 shares held by Mr. Ivchenko and 439,587
     held by Mr. Ivchenko and his wife, as joint tenants.
     Also, includes 320,000 shares held by Mr. Ivchenko's
     children.  Mr. Ivchenko holds a proxy with respect to
     such shares which proxy may be revoked at any time and
     unless revoked shall terminate on January 31, 2004.  As
     a result, Mr. Ivchenko may be deemed to be the
     beneficial owner of such shares.  Does not include
     50,000 shares which may be acquired upon exercise of
     options granted under the 1998 Plan which options are
     not exercisable within 60 days.

(3)  Does not include 25,000 shares which may be acquired
     upon exercise of options granted under the 1998 Plan
     which options are not exercisable within 60 days.

(4)  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.

The Stockholders Agreement

     In February 2002, the Company and Murray S. Cohen, James
Ivchenko, Claire Bluestein, Morris Dunkel, James R. Torpey, Jr.
and Peter Kenny (each a current member of the Board of
Directors) executed a Stockholders Agreement that provides 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.

<PAGE>

Item 13.  Exhibits and Reports on Form 8-K.

     (a)  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)
          ___________________

(1)   Filed with the Company's Form S-18
Registration Statement SEC File 33-25405-NY.

     (b)  Reports on Form 8-K.

     Listed below are reports on Form 8-K filed during the
last quarter of the period covered by this report:

     None.


<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 29, 2002

     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,        5/29/02
Murray S. Cohen        Chairman of the Board,
                       Secretary and Director
                       (Principal Executive Officer and
                       Principal Financial Officer)


/s/ James Ivchenko     President and Director          5/29/02
James Ivchenko


/s/ Claire Bluestein   Director                        5/29/02
Claire Bluestein


/s/ Morris Dunkel      Director                        5/29/02
Morris Dunkel


                       Director
James R. Torpey, Jr.


                       Director
Peter Kenny



<PAGE>




EPOLIN, INC. AND SUBSIDIARY

FINANCIAL STATEMENTS

YEARS ENDED FEBRUARY 28, 2002
AND FEBRUARY 28, 2001

<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 - 16


<PAGE>



INDEPENDENT AUDITOR'S REPORT

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 its wholly owned Subsidiary as of
February 28, 2002 and February 28, 2001 and the related
Consolidated Statements of Income, Stockholders' Equity and
Cash Flows for the years ended February 28, 2002 and February
28, 2001. 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 audit.

     We conducted our audits in accordance with generally
accepted auditing standards in the United States of America.
Those standards require that we plan and perform the audit to
obtain reasonable assurance as to 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 audit provides a reasonable basis for our opinion.

     In our opinion, the Consolidated Financial Statements
referred to above present fairly, in all material respects, the
financial position of Epolin Inc. and Subsidiary as of February
28, 2002 and February 28, 2001 and the results of its
operations and cash flows for the years ended February 28,
2002, and February 28, 2001 in conformity with generally
accepted accounting principles.





                      IWA FINANCIAL CONSULTING LLC
                      Livingston, NJ 07039

May 28, 2002


<PAGE>


                           EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                            February 28,
                                                      -------------------------
                                                         2002           2001
Current assets:                                       ----------     ----------

 Cash and cash equivalents                            $1,517,875      1,690,455
 Accounts receivable                                     365,835        306,283
 Inventories                                             642,637        501,592
 Prepaid expenses                                         41,129         29,123
 Deferred tax assets-current portion                      47,073          8,328
                                                      ----------     ----------

   Total current assets                                2,614,549      2,535,781
                                                      ----------     ----------
Plant, property and equipment - at cost:
 Land                                                     81,000         81,000
 Building                                                369,000        369,000
 Machinery and equipment                                 248,174        228,837
 Furniture and fixtures                                   12,223         11,407
 Leasehold improvements                                  453,492        432,037
                                                      ----------     ----------

   Total                                               1,163,889      1,122,281

Less: Accumulated depreciation and amortization          695,808        673,014
                                                      ----------     ----------

   Net plant, property and equipment                     468,081        449,267
                                                      ----------     ----------
Other assets:
 Deferred tax assets-non current portion                 243,723        232,450
 Cash value - life insurance policy                      110,930        106,051
                                                      ----------     ----------

   Total other assets                                    354,653        338,501
                                                      ----------     ----------

   Total                                              $3,437,283      3,323,549
                                                      ==========     ==========

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                           February 28,
                                                                     ------------------------
                                                                         2002          2001
                                                                     ----------    ----------
<S>                                                                  <C>               <C>
Current liabilities:
 Accounts payable                                                    $   20,574        10,193
 Accrued expenses                                                       149,406       134,158
 Taxes payable:
  Payroll                                                                 1,643         3,725
  Income                                                                108,702        30,700
                                                                     ----------    ----------

  Total current liabilities                                             280,325       178,776
                                                                     ----------    ----------
Other liabilities:
 Deferred compensation                                                  323,479       299,401
 Loans payable-officers                                                       -        10,319
                                                                     ----------    ----------

  Total other liabilities                                               323,479       309,720
                                                                     ----------    ----------
    Total liabilities                                                   603,804       488,496
                                                                     ----------    ----------

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;
  12,529,000 and 11,956,500 shares issued and outstanding
  at 2002 and 2001, respectively                                      2,295,183     2,229,658
  Paid-in capital                                                         6,486         6,486
  Retained earnings                                                     701,963       754,225
                                                                     ----------    ----------

    Total                                                             3,003,632     2,990,369
Less: Treasury stock-at cost                                            170,153       155,316
                                                                     ----------    ----------

  Total stockholders' equity                                          2,833,479     2,835,053
                                                                     ----------    ----------

  Total                                                              $3,437,283     3,323,549
                                                                     ==========    ==========
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>
                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                     YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                                               2002          2001
                                                           -----------   -----------
<S>                                                        <C>             <C>
Sales                                                      $ 2,553,487     2,329,610
                                                           -----------   -----------
Cost of sales and expenses:
 Cost of sales                                                 684,430       699,386
 Selling, general and administrative                           725,828       714,335
                                                           -----------   -----------

    Total                                                    1,410,258     1,413,721
                                                           -----------   -----------

Operating income                                             1,143,229       915,889
                                                           -----------   -----------

Other income - interest                                         49,775        73,968
                                                           -----------   -----------

Income before taxes                                          1,193,004       989,857

Income taxes                                                   422,011       154,810
                                                           -----------   -----------

Net income                                                 $   770,993       835,047
                                                           ===========   ===========
Per share data:
 Basic earnings per common share                                  0.07          0.07
                                                           ===========   ===========

 Fully diluted earnings per common share                          0.07          0.07
                                                           ===========   ===========

 Weighted average number of common shares outstanding       11,715,872    11,341,466
                                                           ===========   ===========
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>
                           EPOLIN, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                               Additional    Retained
                                    Common      Paid-in-     Earnings      Treasury     Stockholders'
                                     Stock      Capital       Deficit        Costs         Equity
                                  ----------   ----------   ----------    ----------    ------------
<S>                               <C>               <C>        <C>          <C>            <C>
Balance - March 1, 2000           $2,220,384        6,486      (80,822)     (118,906)      2,027,142

Common stock issued                    9,274            -            -             -           9,274

Treasury stock purchased                   -            -            -       (36,410)        (36,410)

Net income                                 -            -      835,047             -         835,047
                                  ----------   ----------   ----------    ----------    ------------

Balance - February 28, 2001        2,229,658        6,486      754,225      (155,316)      2,835,053


Balance - March 1, 2001            2,229,658        6,486      754,225      (155,316)      2,835,053

Common stock issued for
 stock option                         65,525            -            -             -          65,525

Treasury stock purchased                   -            -            -       (14,837)        (14,837)

Dividends paid                             -            -     (823,255)            -        (823,255)

Net income                                 -            -      770,993             -         770,993
                                  ----------   ----------   ----------    ----------    ------------

Balance - February 28, 2002       $2,295,183        6,486      701,963      (170,153)      2,833,479
                                  ==========   ==========   ==========    ==========    ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>
                           EPOLIN, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                                                     2002         2001
                                                                  ---------    ---------
<S>                                                               <C>            <C>
Cash flows from operating activities:
 Net income                                                       $ 770,993      835,047
 Adjustments to reconcile net income to net cash provided by
 operating activities:
   Depreciation and amortization                                     22,794       24,077
   Deferred tax expense                                             (50,018)     (93,226)
   Obligation under deferred compensation agreement                  24,078       70,205
 (Increase) decrease in:
   Accounts receivable                                              (59,552)     (17,447)
   Inventories                                                     (141,045)     (26,377)
   Employee loans                                                   (10,319)       4,769
   Prepaid expenses                                                 (12,006)       1,876
 Increase (decrease) in:
   Accounts payable                                                  10,381       (7,137)
   Accrued expenses                                                  15,248      (27,926)
   Taxes payable                                                     75,920     (188,504)
                                                                  ---------    ---------

   Net cash provided by operating activities                        646,474      575,357
                                                                  ---------    ---------
Cash flows from investing activities:
 Increase in cash value - life insurance policy                      (4,879)     (25,472)
 Payments for equipment                                             (41,608)     (15,231)
                                                                  ---------    ---------

   Net cash used by investing activities                            (46,487)     (40,703)
                                                                  ---------    ---------
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                     YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                                         2002           2001
                                                     -----------    -----------
Cash flows from financing activities:
 Proceeds from the issuance of common stock               65,525          9,274
 Dividends paid                                         (823,255)             -
 Treasury stock purchased                                (14,837)       (36,410)
                                                     -----------    -----------

   Net cash used by financing activities                (772,567)       (27,136)
                                                     -----------    -----------

Increase (decrease) in cash                             (172,580)       507,518

Cash and cash equivalents:
 Beginning                                             1,690,455      1,182,937
                                                     -----------    -----------

 Ending                                              $ 1,517,875      1,690,455
                                                     ===========    ===========
Supplemental information:
 Income taxes paid                                   $   299,935        483,391
                                                     ===========    ===========

 Interest paid                                       $       458            248
                                                     ===========    ===========

        The accompanying notes are an integral part of these statements.


<PAGE>


EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002



NOTE A - ORGANIZATION AND BASIS OF PRESENTATION:

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 asset consist of land and a building.  Prior to being
acquired on January 29, 1998, it was controlled by two
officers/stockholders of the Company.

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 $1,417,875 and $1,590,457 at
February 28, 2002 and February 28, 2001, 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 - All reported assets and
liabilities, which represent financial instruments, approximate
the carrying values of such amounts.

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

Depreciation and amortization expense totaled $25,160 and
$24,077 for the fiscal years 2002 and 2001, respectively.

<PAGE>

<TABLE>
<CAPTION>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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 year ended February 28, 2002 are:

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                                            Epolin
                                             Epolin         Holding    Eliminations   Consolidated
                                           -----------    -----------  ------------   ------------
<S>                                        <C>               <C>          <C>           <C>
Current assets                             $ 2,599,687         14,862             -      2,614,549
Non-current assets                             837,811        403,763      (418,840)       822,734
                                           -----------    -----------  ------------   ------------
   Total                                   $ 3,437,498        418,625      (418,840)     3,437,283
                                           ===========    ===========  ============   ============

     Total liabilities                         604,019         91,537       (91,752)       603,804
                                           -----------    -----------  ------------   ------------
Stockholders' equity:
 Common stock                                2,295,183              -             -      2,295,183
 Additional paid-in capital                      6,486              -             -          6,486
 Retained earnings                             701,963        327,088      (327,088)       701,963
 Treasury stock                               (170,153)             -             -       (170,153)
                                           -----------    -----------  ------------   ------------

   Total stockholders' equity                2,833,479        327,088      (327,088)     2,833,479
                                           -----------    -----------  ------------   ------------

     Total                                 $ 3,437,498        418,625      (418,840)     3,437,283
                                           ===========    ===========  ============   ============
</TABLE>
<TABLE>
<CAPTION>

                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                                            Epolin
                                             Epolin         Holding    Eliminations   Consolidated
                                           -----------    -----------  ------------   ------------
<S>                                        <C>               <C>          <C>           <C>
Sales                                      $ 2,553,487              -             -      2,553,487
Other revenue                                        -         97,740       (97,740)             -
                                           -----------    -----------  ------------   ------------
   Total                                     2,553,487         97,740       (97,740)     2,553,487
                                           -----------    -----------  ------------   ------------

Cost of sales                                  684,430              -             -        684,430
Selling, general and administrative            813,613          9,955       (97,740)       725,828
                                           -----------    -----------  ------------   ------------

   Total                                     1,498,043          9,955       (97,740)     1,410,258

Operating income                             1,055,444         87,785             -      1,143,229

Other income - interest                         49,760             15             -         49,775
                                           -----------    -----------  ------------   ------------

Income before taxes                          1,105,204         87,800             -      1,193,004

Income taxes                                   415,361          6,650             -        422,011
                                           -----------    -----------  ------------   ------------

Net income                                 $   689,843         81,150             -        770,993
                                           ===========    ===========  ============   ============
</TABLE>


<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued):

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, allowance for doubtful
accounts and deferred compensation.

Stock Options - As permitted by FASB Statement of Financial
Accounting Standards No. 123, and explained in Note G, the
Company accounts for employee stock options in accordance with
the provisions of Accounting Principles Board Opinion No. 25,
under which compensation expense is recognized only to the
extent that the market price for stock options granted exceeds
the exercise price of the underlying common stock at the date
of grant. As of February 28, 2002 market price in excess of
exercise price of certain options was deemed immaterial to the
financial statements.

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.

Revenue Recognition - Revenue is recorded on the accrual basis
and is recognized at the point of sale as products are shipped.

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.

Regulations - The Company expended approximately $27,400 to
maintain compliance with certain Federal and State government
regulations relative to the production of near infrared dyes
and specialty chemicals.


<PAGE>


EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002

NOTE C - 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, 2002, approximately 57.6% of sales were to four customers.
Three of these customers, located in the Eastern United States,
accounted for 40.1% of sales for the year ended February 28,
2002.  During the year ended February 28, 2001, approximately
52.4% of sales were to four customers, three of which were
located in the Eastern United States and accounted for 43.8% of
sales for the year ended February 28, 2001.


NOTE D - INVENTORIES:

                                2002      2001
Raw materials and supplies   $  50,806   37,769
Work in process                173,369   65,624
Finished goods                 418,462  398,199
          Total              $ 642,637  501,592

NOTE E - INCOME TAXES:
                                            2002       2001
1.  Federal and State
    deferred tax assets include:

     Temporary differences - principally from
     accelerated amortization of leasehold
     improvements for book purposes and
     deferred compensation                $290,796   240,778

     Current portion                        47,073     8,328

     Non-current portion                  $243,723   232,450


<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002



NOTE E - INCOME TAXES (continued):


2.  Income tax expense (benefit):

                                2002             2001
    Current
     Federal                 $366,904          199,776
     State                    105,125           48,260

        Total current         472,029          248,036

     Deferred:
     Federal                  (39,549)         (72,158)
     State                    (10,469)         (21,068)


        Total deferred        (50,018)         (93,226)

     Total                   $422,011          154,810

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


                                            2002      2001
    Computed at the statutory rate       $369,879   283,916
    State income taxes (net)              105,125    48,260
    (Increase) Decrease in
     deferred tax asset                   (50,018)  (93,226)
    General business credits              (19,497)  (51,314)
    Non-deductible items                   16,522   (32,826)

          Effective tax                  $422,011   154,810


NOTE F - ACCRUED SALARIES:


On April 25, 1995, the Board of Directors authorized the
issuance of 1,000,000 shares of common stock (market value $.04
per share) to an officer in lieu of $40,000 of his remaining
accrued salary of $89,948.  The unpaid balance of $49,948 was
paid in the current period.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002


NOTE G - EMPLOYEE BENEFITS:

Simplified Employee Pension Plan - Effective June 1, 1994,
covering all eligible participating employees as defined.
Employer contributions totaled $19,530 and $20,728 for the
years ended February 28, 2002 and February 28, 2001,
respectfully.

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, 20,000 shares of common stock were issued
covering a previously awarded bonus to an employee on May 18,
1998.

Employee Option Plan - The Company previously adopted The 1986
Stock Option Plan.  As of April 1996, options were no longer
granted.  Under the terms of the Plan, options granted could be
designated as portions which qualify for incentive stock option
treatment under Section 422A of the Internal Revenue Code of
1986, as amended, or options which do not qualify. On December
1, 1995, options to acquire up to 490,000 shares of the
Company's common stock were granted and expire on December 1,
2005.  In the current year, 185,000 shares of common stock were
issued to three employees. Common stock issued for all prior
years totaled 270,000 shares. Options totaling 35,000 expired
for all prior years. There were no outstanding options as of
February 28, 2002.

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 which have been granted expire five or ten
years after the date granted and are subject to a vesting
period as follows: (1) no portion will be 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 for all
prior years were 12,500.

Options totaling 387,500 were exercised during the current
year.

<PAGE>


EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002

NOTE G - EMPLOYEE BENEFITS (continued):

Employee Option Plan (continued)

Options granted as of February 28, 2002:

Number of  Exercise    Date                    Expiration
Shares       Price   Granted                      Date
425,000    $.15   December 1, 1998           December 1, 2008
 25,000    $.15   February 10, 1999          February 10, 2009
 25,000    $.15   February 10, 2000          February 10, 2010
 50,000    $.15   September 1, 2001          September 1, 2006
330,000    $.25   September 15, 2001         September 15, 2006

There are 645,000 options attributable to future grants.

NOTE H - TREASURY STOCK:

The Company made several purchases of their own common stock
during the year ended February 28, 2002, which totaled 30,000
shares at a cost of $14,837. Treasury stock at February 28,
2002 totaled 647,145 shares, at a net cost of $170,153.

NOTE I - RESEARCH AND DEVELOPMENT:

Included in selling, general and administrative expenses
totaling $237,169 and $288,481 for the fiscal years February
2002 and 2001, respectively. All research and development costs
are borne by the Company.

NOTE J - ACQUISITIONS:

On January 29, 1998, the Company acquired 100 shares (100%
interest) of Epolin Holding Corp.'s common stock.

NOTE K - COMMITMENTS AND CONTINGENCIES:

On October 17, 1996, the premises leased from 350 South Street
Partnership was purchased for $450,000 by Epolin Holding Corp.,
a New Jersey Corporation, controlled by Murray S. Cohen, Ph.D.
and James A. Ivchenko, officers/stockholders of Epolin, Inc.
The Board of Directors approved this transaction in June 1996
based upon the terms of a $350,000 mortgage obtained from the
Broad National Bank wherein personal guarantees of two
officers/stockholders were mandatory.  Other directors declined
participation in this transaction.

The down payment of $100,000 was borrowed from the Company,
evidenced by a five (5) year promissory note of $75,565 (net of
a three (3) months security deposit) payable in monthly
payments of $1,541, including interest at an annual rate of
8.25%.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002

NOTE K - COMMITMENTS AND CONTINGENCIES (continued):

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 subject to a Cost of Living Index adjustment effective
with the second year.  Rent includes reimbursed insurance.
Epolin Holding Corp. became a wholly owned Subsidiary of
Epolin, Inc. as of January 29, 1998.

Rental expense charged to operations, eliminated in
consolidation, amounted to $97,740 for the years 2002 and 2001,
respectively.

Future minimum payments for the current option period:

    Fiscal years ending February:
          2003                     $97,740
          2004                      97,740
          2005                      97,740
          2006                      97,740
          2007                      65,160

Deferred Compensation - On December 29, 1995, the Company
entered into a deferred compensation agreement with an officer.
This officer's additional annual compensation of $19,645 plus
interest is being deferred until such time the officer reaches
age 65 or is terminated.  The obligation is being funded by a
life insurance policy.  Annual payments of $32,000 for ten
consecutive years shall commence the first day of the month
following the officer's 65th birthday or termination.  On
January 1, 1996, the Company entered into a deferred
compensation agreement with an additional officer wherein
$25,000 per year was accrued. This agreement, terminated on
June 25, 1998, with unfunded accruals of $79,041 and will be
paid upon retirement either in 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. The
Company entered into a second deferred compensation agreement
with the same officer on June 25, 1998, which provided for the
payment of certain funds for a period of ten years beginning
two weeks after the date of his retirement. This agreement was
terminated March 1, 1999.

Effective March 1, 1999, the Company adopted deferred
compensation agreements with two of its 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.  Management has elected not to provide
any additional funding for either employee subsequent to the
date the two employees were no longer employed by the Company.

Deferred compensation of $24,079 and $70,204 was charged to
operations for the years ended February 28, 2002 and February
28, 2001, respectively.

<PAGE>


EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2002

NOTE K - COMMITMENTS AND CONTINGENCIES (continued):

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

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.  In addition, he
is to receive 1.5% of 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.

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% of
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.

CONTINGENCIES:

In August 2000, the Company received notice from a law firm
representing a former officer of the Company alleging age
discrimination and other monetary claims pertaining to such
former officer's past employment.  In addition, in September
2000, the Company received a letter from the same law firm on
behalf of another former employee of the Company alleging
similar claims.  In December 2000, these individuals instituted
suit in the Superior Court of New Jersey, Bergen County - Law
Division, against the Company and other directors of the
Company alleging claims pursuant to their past employment as
well as a derivative claim, as minority stockholders.  The
Company believes such claims are without merit and intends to
defend such matter vigorously. While the outcome of this action
cannot be predicted at this time, taking into account the
uncertainty and risks inherent in any litigation, management
does not anticipate that the ultimate disposition will have a
material adverse effect on the Company.