SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549

                           FORM 10-KSB/A

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

           For the fiscal year ended FEBRUARY 29, 2004

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

                 Commission file number 0-28887

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

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

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


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

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

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

Check  whether the Issuer: (1) filed all reports required  to  be
filed by Section 13 or 15(d) of the Exchange Act during the  past
12  months  (or  for such shorter period that the Registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.

                    Yes [ X ]      No  [    ]

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

State Issuer's revenues for its most    recent    fiscal    year:
$2,733,892

As  of  April 23, 2004, the aggregate market value of the  Common
Stock held by non-affiliates of the Issuer (7,317,155 shares) was
approximately  $4,573,000.  The number of shares  outstanding  of
the Common Stock (no par value) of the Issuer as of the close  of
business on April 23, 2004 was 11,840,355.

           Documents Incorporated by Reference:  None

<PAGE>

                          EPOLIN, INC.

                        TABLE OF CONTENTS



                             PART I
                                                       Page

Item 1.        Description of Business                  3

Item 2.        Description of Property                  9

Item 3.        Legal Proceedings                        9

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


                             PART II

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

Item 6.        Management's Discussion and
               Analysis or Plan of Operation            11

Item 7.        Financial Statements                     15

Item 8.        Changes in and Disagreements
               with Accountants on
               Accounting and Financial Disclosure      15

Item 8A.       Controls and Procedures                  15


                            PART III

Item 9.        Directors, Executive Officers,
               Promoters and Control Persons;
               Compliance with  Section 16(a)
               of  the Exchange Act                     15

Item 10.       Executive Compensation                   17

Item 11.       Security Ownership of Certain
               Beneficial Owners and Management
               and Related Stockholder Matters          20

Item 12.       Certain Relationships and
               Related Transactions                     21

Item 13.       Exhibits and Reports on Form 8-K         21

Item 14.       Principal Accountant Fees and Services   22

               Signatures                               23

<PAGE>

                   Forward-Looking Statements

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

                             PART I

Item 1.        Description of Business.

Introduction

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

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

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

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

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

Infrared Dyes

      To  management's  knowledge, the  Company  is  the  largest
producer  of near infrared ("NIR") dyes in the world  and  offers
the  customer the most varied assortment of dyes absorbing in the
NIR  region of the spectrum (from 700 to 1600 NM).  The dyes  are
sold as pure, crystalline, powders or as formulations or mixtures
of dyes.  Applications for these dyes cover several markets which
are discussed in the following subsections.

<PAGE>

     Dyes for Laser Protection

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

     Dyes for Welding

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

     Dyes for Security Inks

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

     Dyes for Specialty Filters

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

<PAGE>

     Dyes for Sun Protection

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

     Dyes for Heat Shields

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

     Dyes for Interlayer and Laminates

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

Specialty Chemical Products

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

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

Effect of Compliance with Government Regulation

      Manufacturers of chemical products are subject to extensive
Federal and State environmental regulations. Although the Company
believes  that its manufacturing processes do not result  in  the
emission of volatile organic vapors into the atmosphere, and that
the  Company  is  not  in  violation  of  any  State  or

<PAGE>

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.

      During  the years ended February 29, 2004 and February  28,
2003,  the  Company expended approximately $18,000  and  $28,000,
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 29, 2004,
no   significant  difficulties  were  encountered  in   obtaining
adequate supplies of  raw materials.

Research and Development

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

      During  the years ended February 29, 2004 and February  28,
2003,  the  amounts  spent on research and development activities
were  approximately  $374,000  and $292,000,  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  not  sell their dyes without bundling the dyes as  part  of
other products.  Such companies do not sell the pure dye which is
done   by  the  Company.

<PAGE>

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.

Technological Obsolescence

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

Patents and Proprietary Protection

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

Sales

     A material portion of the Company's business is dependent on
certain  domestic  customers, the loss  of  which  could  have  a
material  effect on operations.  During the year  ended  February
29,  2004,  approximately 65.3% of sales were to four  customers.
Two  of  these  customers, located in the Eastern United  States,
accounted for 42.0% of sales.  During the year ended February 28,
2003, approximately 52.6% of sales were to four customers.  Three
of  these  customers,  located  in  the  Eastern  United  States,
accounted for 43.4% of sales.

Employees

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

Uncertainties and Risk Factors

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

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

<PAGE>

       DEPENDENCE   ON   KEY  CUSTOMERS.    Our   customers   are
concentrated,  so  the loss of one or more  key  customers  could
significantly  reduce  our revenues.  In fiscal  2004  and  2003,
approximately 65.3% and 52.6%, respectively, of our revenues were
from  four  customers.  The loss of any of these customers  could
have a material adverse effect on the Company.

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

     COMPETITION.  Although the Company generally experiences, in
management's  opinion, limited competition in all  areas  of  its
business, 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.

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

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

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

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

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

      DIVIDENDS.   While the Company has paid two cash  dividends
in  each  of  the three previous fiscal years, there  can  be  no
assurance   that  such  dividends  will  continue.   Any   future
dividends  will

<PAGE>

depend on earnings, other financial  requirements
and other factors, many of which may be beyond the control of the
Company.

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

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


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.  The first  five
year  option has been exercised which has extended the  lease  to
October  31, 2006.   Such  rent  includes  real estate taxes  and
insurance  expenses.  In January 1998, Epolin  Holding  became  a
wholly-owned subsidiary of the Company.

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


Item 3.   Legal Proceedings.

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

<PAGE>

the
aggregate  amount  of  $69,575  ($0.55  per  share).   All   such
settlement  payments have been made, and the 126,500 shares  have
been  bought back.  During the quarter ended November  30,  2003,
the  Company was reimbursed a portion of the settlement  payments
from  its insurance company in the amount of $118,560.   Although
the  Company has denied and continues to deny all claims asserted
in the lawsuit, Management determined, in conjunction with advice
of  counsel, that it was in the best interests of the Company and
its  stockholders  to settle the action on the  terms  as  agreed
taking into account various factors including the uncertainty and
risks inherent in any litigation.

     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.

Market Information

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

Period                                         Bid Prices

Fiscal year ended February 29, 2004:         High       Low

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

Fiscal year ended February 28, 2003:         High       Low

March 1, 2002 to May 31, 2002                $.80       $.55
June 1, 2002 to Aug. 31, 2002                $.70       $.59
Sept. 1, 2002 to Nov. 30, 2002               $.69       $.45
Dec. 1, 2002 to Feb. 28, 2003                $.69       $.46

Holders

     As   of  April  23,  2004,  there  were  approximately   292
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".

<PAGE>

Dividends

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

Recent Sales of Unregistered Securities

      In  fiscal 2003, the Company issued 37,500 shares of Common
Stock  upon  exercise of previously granted stock options  at  an
aggregate exercise price of $9,375.

      In fiscal 2004, the Company issued 137,500 shares of Common
Stock  upon  exercise of previously granted stock options  at  an
aggregate exercise price of $29,375.

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

Equity Compensation Plan Information



Equity Compensation Plan Information


                      Number of securities
                      to be issued upon       Weighted-average
                      exercise of             exercise price of
                      outstanding options,    outstanding options,
Plan category         warrants and rights (a) warrants and rights (b)
Equity compensation
plans approved by
security holders                -0-               -0-

Equity compensation
plans not approved
by security holders         392,000              $0.29

Total                       392,000              $0.29


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

Equity compensation
plans approved by
security holders                  -0-

Equity compensation
plans not approved
by security holders             458,000

Total                           458,000



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

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

Executive Overview

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

<PAGE>

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

       The  Company  sells  its  products  to  manufacturers   of
plastics/resins, credit cards, electronics, glass and other basic
materials.  The Company's customers are located in all regions of
the  world, although approximately 80% of its sales are domestic.
As  the  service  economy  continues to dwarf  the  manufacturing
sector  in  the United States, the Company anticipates  that  its
products  will  be  increasingly used  by  manufacturers  located
abroad.   While the Company sells to over 100 accounts per  year,
its  top  four customers accounted for approximately 65%  of  the
sales for fiscal 2004.   Sales have remained at a fairly constant
level in the last few fiscal years.

      We  recently  contracted with an outside firm  to  help  us
develop  a  business plan that could serve as a guide for  future
growth  of  the Company.  Management realized that  some  of  our
product  line  was reaching maturity and it was of importance  to
know  where we could direct our resources for greatest impact  on
the marketplace.

      For  example,  the areas in which we achieved  our  initial
growth  had  been  in sales to the welding industry  for  use  in
safety  lenses  and  shields. We continue to  maintain  a  strong
presence as a dye supplier to this market segment. However, as an
outcome of automation and a slowdown in economic activity in  the
heavy industry sector, demand worldwide has reached a plateau. As
a  result,  much of the industry has moved overseas to  producers
mostly in the Far East.  To maintain our hold on these markets we
now  offer fully formulated dye packages which can be used by the
lens  manufacturer simply by adding the package to  polycarbonate
and  injection  molding the final product. Greater  emphasis  has
recently been placed on sales and marketing in order to grow  our
business in security inks and coatings. We are also working  with
customers who bring to our attention unique requirements for near
infrared  dyes.   In  our  research and development  efforts  our
chemists  have  developed a number of heat stable and  compatible
visible  light  dyes  which can be used in combination  with  the
infrared dyes. We have also been able to duplicate the laminating
conditions   used   by  credit  card  manufacturers   for   color
development  and  to confirm that the cards produced  from  these
inks will meet ISO and industry standards.

Results of Operations

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

                                            Years Ended

                                 February 29,       February  28,
                                    2004                 2003

Sales                                100%               100%

Cost of sales and expenses:
  Cost of sales                      30.3               36.0
  Selling, general
   and administrative                29.1               29.5
     Total                           59.4               65.5

Operating Income                     40.6               34.5

Income before taxes                  42.1               36.0

Net  income  (after  taxes
and extraordinary item)              21.7               21.7

<PAGE>

Sales

      Sales increased from $2,691,000 for the year ended February
28,  2003 to $2,734,000 for the year ended February 29,  2004,  a
minor increase of $42,000 or 1.6%.

Cost of Sales and Expenses

      Cost of sales decreased $139,000, to $830,000 for the  year
ended February 29, 2004 from $969,000 for the year ended February
28, 2003.  Selling, general and administrative expenses increased
slightly  to $796,000 for the year ended February 29,  2004  from
$793,000  for  the year ended February 28, 2003, an  increase  of
$3,000.   The  total of cost of sales and expenses for  the  year
ended  February 29, 2004 was $1,626,000 as compared to $1,762,000
for  the  year  ended February 28, 2003, a decrease of  $136,000.
Such decrease was primarily due to the reduced cost of sales  for
fiscal 2004 as compared to fiscal 2003 principally the result  of
the  elimination of a deferred compensation liability of $108,000
due to two former employees of the Company.

Operating Income

      Operating  Income for fiscal 2004 increased  to  $1,108,000
from  $930,000  for fiscal 2003, an increase of  $178,000.   This
change  was  primarily due to the slight increase  in  sales  for
fiscal 2004 compared to fiscal 2003 along with reduced total cost
in sales and expenses of $136,000.

Other Income

      Total  other income for fiscal 2004 was $43,000 as compared
to  $39,000  for  fiscal 2003.  During fiscal 2004,  the  Company
realized  $36,000  in  rental income as compared  to  $12,000  in
rental  income for fiscal 2003.  Effective November 1, 2002,  the
Company began to sublease approximately 2,500 square feet of  its
space  to  a non-related party to operate an optics and  security
inks  laboratory  at  an annual rent of $36,000.   The  Company's
interest  income decreased from $21,000 in fiscal 2003 to  $7,000
in  fiscal 2004 primarily as a result of reduced cash on hand and
lower  interest rates available for cash on hand in  fiscal  2004
compared to fiscal 2003.

Income

      During the fiscal year ended February 29, 2004, the Company
reported income before taxes of $1,151,000 as compared to  income
before  taxes of $968,000 for the year ended February  28,  2003.
Income  taxes were $449,000 for fiscal 2004 compared to  $385,000
for  fiscal  2003.   Net income after taxes and an  extraordinary
item  for  a  litigation settlement (see below) was  $592,000  or
$0.05  per share for the year ended February 29, 2004 as compared
to  net income after taxes of $583,000 or $0.05 per share for the
year  ended February 28, 2003.  Although the Company realized  an
increase  in operating income of $178,000 in fiscal 2004 compared
to  the  prior  year, the Company also suffered an  extraordinary
item  of $110,000 for a litigation settlement (net of income  tax
benefit  of $83,000) in fiscal 2004, for which there  was  not  a
comparable item in fiscal 2003.  The settlement resulted  from  a
litigation commenced in December 2000 by two individuals (each  a
former  director  and  former employee  of  the  Company).   This
settlement included a lump sum payment to the plaintiffs in  such
action  in  the  amount  of $312,000.  In addition,  the  Company
bought back 126,500 shares owned by one of the plaintiffs for the
aggregate  amount  of  $69,575 ($0.55  per  share).   During  the
quarter  ended  November 30, 2003, the Company was  reimbursed  a
portion of the settlement proceeds from its insurance company  in
the amount of $118,560.

      Net  income  in  future years will be  dependent  upon  our
ability to increase revenues faster than we increase our selling,
general  and  administrative expenses, research  and  development
expense  and  other expenses.  We anticipate such  expenses  will
remain  at a fairly constant level in the next year, and  we  are
encouraged that recently shipped development quantities  of  dyes
to  certain  new customers will lead to new ongoing business  for
the  Company's  products.  Of course, there can be  no  assurance
that such will be the case.

<PAGE>

Liquidity and Capital Resources

      The  Company's  primary source of funds is cash  flow  from
operations in the normal course of selling products.  On February
29,  2004, the Company had working capital of $1,896,000, a  debt
to  equity  ratio  of  0.17  to 1, and  stockholders'  equity  of
$2,618,000.   On February 29, 2004, the Company had  $548,000  in
cash  and cash equivalents, total assets of $3,067,000 and  total
liabilities of $449,000.

      The  Company anticipates, based on currently proposed plans
and assumptions relating to its operations, that its current cash
and  cash  equivalents together with projected  cash  flows  from
operations  and projected revenues will be sufficient to  satisfy
its  contemplated  cash requirements for more than  the  next  12
months.

      Inflation  has  not  significantly impacted  the  Company's
operations.

Significant Accounting Policies

      Our  discussion  and  analysis of the  Company's  financial
condition   and  results  of  operations  are  based   upon   our
consolidated  financial statements which have  been  prepared  in
accordance  with  generally accepted auditing  standards  in  the
United  States  of America.  Our significant accounting  policies
are  described in Note B to the consolidated financial statements
included elsewhere herein.

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 29,  2004,  a  total  of
184,000  shares were repurchased at a cumulative cost of $103,405
which  included  125,500  shares  repurchased  from  one  of  the
plaintiffs   in  the  settlement  of  the  aforesaid  litigation.
During the fiscal year ended February 28, 2003, a total of 32,500
shares  were  repurchased at a cumulative cost of  $18,624  while
during the fiscal year ended February 28, 2002, a total of 30,000
shares were repurchased at a cumulative cost of $14,837.  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 fiscal 2004, the Company paid two cash dividends, the
first  being  $.02 per share in August 2003 and the second  being
$.02  per shares in February 2004.  During the fiscal year  ended
February 28, 2003, the Company also paid two cash dividends,  the
first being $.04 per share in July 2002 and the second being $.03
per  share in January 2003.  Prior thereto, and during the fiscal
year  ended  February 28, 2002, the Company also  paid  two  cash
dividends,  the  first being $.03 per share in June  2001  (which
represented the first time that a cash dividend was paid  by  the
Company) and the second being $.04 per share in February 2002.

      Murray  S. Cohen, the Company's Chairman of the  Board  and
Chief Executive Officer, recently announced his intention to step
down  as Chief Executive Officer at an undetermined future  date,
while  continuing to remain as Chairman of the  Board  and  Chief
Scientist for the Company.  Dr. Cohen has indicated that he  will
remain  as  Chief  Executive Officer until  such  time  that  the
Company  finds  a suitable replacement and, in this  regard,  the
Board   of   Directors  recently  formed  a   search   committee.
Nevertheless, insofar that the Company is confident that it  will
be  able  to  find a suitable replacement and together  with  Dr.
Cohen's  intention not to step down as Chairman of the Board  and
that he will remain involved with the business as Chief Scientist
for  the Company, the Company believes that such change will  not
have   a  material  adverse  effect  of  the  Company's  business
operations.

<PAGE>

Off-Balance Sheet Arrangements

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


Item 7.   Financial Statements.

     See the Financial Statements annexed to this report.



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

     Not applicable.


Item 8A.  Controls and Procedures.

     The   Company's   Chief  Executive  Officer  and   Principal
Financial Officer have reviewed the Company's disclosure controls
and  procedures  as  of  the end of the period  covered  by  this
report.   Based upon this review, such officers believe that  the
Company's  disclosure controls and procedures  are  effective  in
timely  alerting  them  to material information  required  to  be
included  in this report. There have been no significant  changes
in internal control over financial reporting that occurred during
the  fiscal  year  covered by this report  that  have  materially
affected,  or  are  reasonably likely to materially  affect,  the
Company's internal control over financial reporting.


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

James   Ivchenko      64      President  and Director  1993

<PAGE>

Claire Bluestein      77      Director                 1984

Morris Dunkel         75      Director                 1984

James R. Torpey, Jr.  54      Director                 2001

      During  fiscal 2004 (and prior thereto, since  July  2001),
Peter Kenny also served as a director of the Company.  Subsequent
to  the end of fiscal 2004, Mr. Kenny resigned as a director  due
to personal reasons.

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

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

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

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

     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.

<PAGE>

      JAMES  R. TORPEY, JR. has served as Director of the Company
since  July  2001.   Mr. Torpey is President  of  Madison  Energy
Consultants.   From 1995 to 2002, he was Director  of  Technology
Initiatives  at First Energy/GPU, Chairman of the Solar  Electric
Power  Association,  and President and member  of  the  Board  of
Directors  of  GPU Solar, Inc.  He is currently a member  of  the
U.S.  Department  of  Energy Solar Industry Advisory  Board.  Mr.
Torpey  received  his  Masters  of Business  Administration  from
Rutgers University in 1991.

Code of Ethics


    The Company intends to consider adoption of a Code of Ethics
during the current fiscal year. The Code, which will be applicable
to its Chief Executive Officer and senior financial executives, will
be designed to deter wrong-doing and promote honest and ethical
behavior, full, fair, timely, accurate and understandable disclosure,
and compliance with applicable laws.  Following adoption, a copy
of the Code of Ethics will be provided to any person without
charge upon written request to the Secretary of the Company
at its executive offices, 358-364 Adams Street, Newark,
New Jersey 07105.


Item 10.  Executive Compensation.

       The   following  summary  compensation  tables  set  forth
information concerning the annual and long-term compensation  for
services  in  all capacities to the Company for the fiscal  years
ended February 29, 2004, February 28, 2003 and February 28, 2002,
of  those  persons who were, at February 29, 2004 (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         2004       $249,197(1)(3)  $29,500
Chairman of the         2003       $227,146(1)(3)  $32,000
Board and Chief         2002       $204,356(1)(3)  $31,000
Executive Officer

James Ivchenko          2004       $229,002(2)(3)  $25,000
President               2003       $208,097(2)(3)  $27,000
                        2002       $186,864(2)(3)  $25,900



                                Long-Term
                                Compensation

                                      Restricted    Shares
Name   and  Principal                 Stock         Underlying
Position                              Awards        Options

Murray S. Cohen         2004            0            20,000
Chairman of the         2003            0                 0
Board and Chief         2002            0            50,000
Executive Officer

James Ivchenko          2004            0            20,000
President               2003            0                 0
                        2002            0            50,000

_______________________
(1)  Includes  compensation of $74,016, $63,837 and  $52,416  for
     2004,  2003 and 2002, respectively, due to Murray  S.  Cohen
     based  upon  the Company's sales for fiscal 2003,  2002  and
     2001  paid  in fiscal 2004, 2003 and 2002, respectively,  as
     determined under his employment contract.  Does not include,
     however,  compensation  due to  Dr.  Cohen  based  upon  the
     Company's  sales  for  fiscal 2004 as determined  under  his
     employment contract which will be paid in fiscal 2005  which
     will be in the amount of $82,017.

<PAGE>


(2)  Includes compensation of $60,559, $51,070 and  $40,768
     for 2004, 2003 and 2002, respectively, due to James Ivchenko
     based upon the Company's sales for fiscal 2003, 2002 and 2001
     paid in fiscal 2004, 2003 and 2002, respectively, as determined
     under  his employment contract.  Does not include,  however,
     compensation due to Mr. Ivchenko based upon the Company's sales
     for fiscal 2004 as determined under his employment contract which
     will  be paid in fiscal 2005 which will be in the amount  of
     $68,347.

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

Stock Option Plans

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

      In December 1998, the Company adopted the 1998 Stock Option
Plan  (the  "1998 Plan") for employees, officers, consultants  or
directors  of  the  Company to purchase up to 750,000  shares  of
Common  Stock of the Company (the "1998 Plan Option  Pool").   In
September 2001, the Board of Directors increased the size of  the
1998 Plan Option Pool to 1,500,000 shares.  Options granted under
the  1998 Plan shall be non-statutory stock options which do  not
meet  the  requirements of Section 422 of the  Code.   Under  the
terms  of  the  1998  Plan, participants may receive  options  to
purchase Common Stock in such amounts and for such prices as  may
be established by the Board of Directors or a committee appointed
by  the  Board  to administer the 1998 Plan.  As of February  29,
2004, options to acquire 1,042,000 shares of the Company's Common
Stock  have been granted under the 1998 Plan and 458,000  options
were  available  for future grant.  To date, options  to  acquire
575,000  shares of the Company's Common Stock have been exercised
and  options  to acquire 75,000 shares have been cancelled  under
the 1998 Plan.

      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
29, 2004.

                     Option Grants in Fiscal 2004

                           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       20,000         12.3%          $.35
James Ivchenko        20,000         12.3%          $.35


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

Murray S. Cohen         $19,750         2/9/2014
James Ivchenko          $19,750         2/9/2014

<PAGE>
_______________________
(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.

     The following table set forth certain information as to each
exercise  of  stock  options during the year ended  February  29,
2004, by the persons named in the Summary Compensation Table  and
the fiscal year-end value of unexercised options:

Aggregated Option Exercises in Fiscal 2004 and
Year-End Option Value

                                         Number of Securities
                   Shares                Underlying Unexercised
                   Acquired              Options at February 29, 2004
                   On        Value
                   Exercise  Realized(1) Exercisable   Unexercisable

Murray S. Cohen    25,000   $7,250       25,000         20,000

James Ivchenko     25,000   $7,125       25,000         20,000


                     Value of Unexercised
                     In-the-Money Options
                     at February 29, 2004(2)

                   Exercisable      Unexercisable

Murray S. Cohen       $5,500         $2,400
James Ivchenko        $5,500         $2,400


 (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 29,  2004,  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  does not have any termination  or  change  in
control arrangements with any of its named executive officers.

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

      The  following table sets forth, as April 23, 2004, 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        Percent
Name of Beneficial Owner      of Beneficial Ownership  of Class

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

All Officers and Directors
as  a  Group  (5   persons)       4,648,200           38.8%
_________________________
*    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  25,000
     shares held by the wife of Dr. Cohen.  Also, includes 25,000
     shares  which Dr. Cohen has the right to acquire  within  60
     days  pursuant to

<PAGE>

     the exercise of options granted under  the
     1998 Plan.  In addition, Dr. Cohen has options granted under
     the  1998 Plan to acquire an additional 20,000 shares  which
     are  not  exercisable  within 60 days.    Does  not  include
     1,000,000 shares owned by three grandchildren of Dr.  Cohen,
     for which shares Dr. Cohen had previously held a proxy.

(2)  Includes  1,005,000 shares held by Mr. Ivchenko and  439,587
     held  by Mr. Ivchenko and his wife, as joint tenants.  Also,
     includes  25,000 shares which Mr. Ivchenko has the right  to
     acquire  within 60 days pursuant to the exercise of  options
     granted under the 1998 Plan.  In addition, Mr. Ivchenko  has
     options granted under the 1998 Plan to acquire an additional
     20,000  shares  which are not exercisable  within  60  days.
     Does  not  include  320,000 shares owned by  Mr.  Ivchenko's
     children, for which shares Mr. Ivchenko had previously  held
     a proxy.

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

(4)  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

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


Item 12.  Certain Relationships and Related Transactions.

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


Item 13.  Exhibits 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)
          31.1 Certification of Chief Executive Officer  pursuant
               to  Section 302 of the Sarbanes-Oxley Act of  2002
               (Rules 13a-14 and 15d-14 of the Exchange Act)
          31.2 Certification   of  Principal  Financial   Officer
               pursuant to Section 302 of the Sarbanes-Oxley  Act
               of  2002  (Rules 13a-14 and 15d-14 of the Exchange
               Act)
          32.2 Certification  pursuant  to  Section  906  of  the
               Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

<PAGE>
          ___________________
     (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.


Item 14.  Principal Accountant Fees and Services.

      The following is a summary of the fees billed to us by  the
principal  accountants  to the Company for professional  services
rendered  for  the  fiscal  years ended  February  29,  2004  and
February 28, 2003:

                               Fiscal 2004         Fiscal 2003
Fee Category                   Fees                Fees

Audit Fees                     $45,165             $44,170
Audit Related Fees             $0                  $0
Tax Fees                       $3,000              $3,000
All Other Fees                 $0                  $0

Total Fees                     $48,165             $47,170

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

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

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

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

     Pre-Approval Policies and Procedures

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

<PAGE>

                           SIGNATURES

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


                                  EPOLIN, INC.
                                  (Registrant)

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

                                  Dated: May 21, 2004


     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,           5/21/04
Murray S. Cohen             Chairman of the Board,
                            Secretary and Director
                            (Principal Executive Officer)


/s/ James Ivchenko          President and Director             5/21/04
James Ivchenko              (Principal Financial Officer)


/s/ Claire Bluestein        Director                           5/21/04
Claire Bluestein



/s/ Morris Dunkel           Director                           5/21/04
Morris Dunkel


/s/ James R. Torpey, Jr.    Director                           5/28/04
James R. Torpey, Jr.


<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY

                      FINANCIAL STATEMENTS

                  YEARS ENDED FEBRUARY 29, 2004
                      AND FEBRUARY 28, 2003


<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 - 17


<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 it's wholly owned Subsidiary as of  February
29,  2004  and  February  28, 2003 and the  related  Consolidated
Statements of Income, Stockholders' Equity and Cash Flows for the
years  ended  February  29,  2004 and February  28,  2003.  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  29,  2004
and  February 28, 2003 and the results of its operations and cash
flows  for  the years ended February 29, 2004, and  February  28,
2003 in conformity with generally accepted accounting principles.


IWA FINANCIAL CONSULTING LLC
Livingston, NJ 07039


March 24, 2004



<PAGE>


                           EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                         February 29,   February 28,
Current assets:                                              2004           2003
                                                         ------------   ------------
<S>                                                      <C>                 <C>
  Cash and cash equivalents                              $    547,930        969,477
  Accounts receivable                                         643,581        371,461
  Inventories                                                 757,767        629,312
  Notes receivable                                                 --         14,139
  Prepaid expenses                                            128,035        140,982
  Deferred tax assets-current portion                           3,710          2,260
                                                         ------------   ------------

      Total current assets                                  2,081,023      2,127,631
                                                         ------------   ------------

Plant, property and equipment - at cost:
  Land                                                         81,000         81,000
  Building                                                    369,000        369,000
  Machinery and equipment                                     243,111        222,581
  Furniture and fixtures                                       12,223         12,223
  Leasehold improvements                                      600,679        553,280
                                                         ------------   ------------

      Total                                                 1,306,013      1,238,084

  Less:  Accumulated depreciation and amortization            716,081        687,420
                                                         ------------   ------------

      Net plant, property and equipment                       589,932        550,664
                                                         ------------   ------------

Other assets:
  Deferred tax assets-non current portion                     229,417        283,116
  Cash value - life insurance policy                          166,772        128,586
                                                         ------------   ------------

      Total other assets                                      396,189        411,702
                                                         ------------   ------------

      Total                                              $  3,067,144      3,089,997
                                                         ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                     February 29,   February 28,
                                                                         2004           2003
                                                                     ------------   ------------
<S>                                                                  <C>                   <C>
Current liabilities:
  Accounts payable                                                   $      1,259          6,410
  Accrued expenses                                                        178,090        158,922
  Taxes payable:
     Payroll                                                                1,719          1,737
     Income                                                                 3,708            403
                                                                     ------------   ------------

     Total current liabilities                                            184,776        167,472
                                                                     ------------   ------------


Other liabilities - Deferred compensation                                 264,011        347,558
                                                                     ------------   ------------


         Total liabilities                                                448,787        515,030
                                                                     ------------   ------------

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;
     12,704,000 and 12,554,000 shares issued, 11,840,355 and
     11,894,355 shares outstanding at 2004 and 2003, respectively       2,333,933      2,304,558
     Paid-in capital                                                        6,486          6,486
     Retained earnings                                                    570,120        452,700
                                                                     ------------   ------------

         Total                                                          2,910,539      2,763,744
     Less: Treasury stock-at cost                                         292,182        188,777
                                                                     ------------   ------------

       Total stockholders' equity                                       2,618,357      2,574,967
                                                                     ------------   ------------

       Total                                                         $  3,067,144      3,089,997
                                                                     ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
               YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

<TABLE>
<CAPTION>
                                                             2004           2003
                                                         ------------   ------------
<S>                                                      <C>               <C>
Sales                                                    $  2,733,892      2,691,497
                                                         ------------   ------------

Cost of sales and expenses:
  Cost of sales                                               829,504        968,876
  Selling, general and administrative                         796,460        793,103
                                                         ------------   ------------

     Total                                                  1,625,964      1,761,979
                                                         ------------   ------------

Operating income                                            1,107,928        929,518
                                                         ------------   ------------

Other income:
  Rental income                                                36,000         12,000
  Interest                                                      7,003         20,664
  Gain on sale of assets                                           --          6,200
                                                         ------------   ------------
     Total other income                                        43,003         38,864
                                                         ------------   ------------

Income before taxes                                         1,150,931        968,382

Income taxes                                                  448,536        385,165
                                                         ------------   ------------

Income before extraordinary item                              702,395        583,217

Extraordinary item - litigation settlement (net of
income tax benefit of $83,179)                                110,261             --
                                                         ------------   ------------

Net income                                               $    592,134        583,217
                                                         ============   ============

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

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

  Weighted average number of common shares outstanding     11,972,459     11,891,105
                                                         ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

               YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

<TABLE>
<CAPTION>
                                              Additional      Retained
                                 Common        Paid-in-       Earnings       Treasury       Stockholders'
                                 Stock         Capital        Deficit          Costs           Equity
                              ------------   ------------   ------------    ------------    ------------
<S>                           <C>                   <C>         <C>             <C>            <C>
Balance - March 1, 2002       $  2,295,183          6,486        701,963        (170,153)      2,833,479

Common stock issued for
   stock option                      9,375             --             --              --           9,375

Dividends paid                          --             --       (832,480)             --        (832,480)

Treasury stock purchased                --             --             --         (18,624)        (18,624)

Net income                              --             --        583,217              --         583,217
                              ------------   ------------   ------------    ------------    ------------

Balance - February 28, 2003   $  2,304,558          6,486        452,700        (188,777)      2,574,967
                              ============   ============   ============    ============    ============



Balance - March 1, 2003       $  2,304,558          6,486        452,700        (188,777)      2,574,967

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

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

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

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

Balance - February 29, 2004   $  2,333,933          6,486        570,120        (292,182)      2,618,357
                              ============   ============   ============    ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

               YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

<TABLE>
<CAPTION>
                                                                    2004            2003
                                                                ------------    ------------
<S>                                                             <C>                  <C>
Cash flows from operating activities:
  Net income                                                    $    592,134         583,217
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                    28,661          26,521
     Deferred tax expense                                             52,249           5,420
     Obligation under deferred compensation agreement                (83,547)         24,078
     Gain on sale of assets                                               --          (6,200)
   (Increase) decrease in:
     Accounts receivable                                            (272,120)         (5,626)
     Inventories                                                    (128,455)         13,325
     Prepaid expenses                                                 12,947         (99,853)
   Increase (decrease) in:
     Accounts payable                                                 (5,151)        (14,164)
     Accrued expenses                                                 19,168           9,516
     Taxes payable                                                     3,287        (108,205)
                                                                ------------    ------------

        Net cash provided by operating activities                    219,173         428,029
                                                                ------------    ------------

Cash flows from investing activities:
   Increase in cash value - life insurance policy                    (38,186)        (17,656)
   Sale of equipment                                                      --           8,000
   Notes receivable                                                   14,139         (14,139)
   Payments for equipment                                            (67,929)       (110,903)
                                                                ------------    ------------

        Net cash used by investing activities                        (91,976)       (134,698)
                                                                ------------    ------------
</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 29, 2004 AND FEBRUARY 28, 2003



                                                        2004            2003
                                                     ----------      ----------
Cash flows from financing activities:
  Proceeds from issuance of common stock                 29,375           9,375
  Dividends paid                                       (474,714)       (832,480)
  Treasury stock purchased                             (103,405)        (18,624)
                                                     ----------      ----------

     Net cash used by financing activities             (548,744)       (841,729)
                                                     ----------      ----------

Decrease in cash                                       (421,547)       (548,398)

Cash and cash equivalents:
  Beginning                                             969,477       1,517,875
                                                     ----------      ----------

  Ending                                             $  547,930         969,477
                                                     ==========      ==========

Supplemental information:
  Income taxes paid                                  $  281,400         472,800
                                                     ==========      ==========


        The accompanying notes are an integral part of these statements.


<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003



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

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

Concentrations of Credit Risks - The Company and its  Subsidiary
had cash deposits in a financial institution and brokerage house
in  excess  of  the amount insured by agencies  of  the  federal
government in amounts of $628,000 and $1,145,000 at February 29,
2004  and  February 28, 2003, respectively. In  evaluating  this
credit risk, the Company periodically evaluates the stability of
the financial institution and brokerage house.

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

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

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

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

Depreciation and amortization expense totaled $28,661 and $26,521
for  the  years  ended February 29, 2004 and February  28,  2003,
respectively.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


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 years ended February 29, 2004 and February 28, 2003
are:
<TABLE>
<CAPTION>
                      CONDENSED CONSOLIDATING BALANCE SHEET

                                                        Epolin
                                         Epolin         Holding      Eliminations    Consolidated
                                      ------------    ------------   ------------    ------------
<S>                                   <C>                  <C>           <C>            <C>
Current assets                        $  1,905,290         175,733             --       2,081,023
Non-current assets                       1,158,146         523,934       (695,959)        986,121
                                      ------------    ------------   ------------    ------------
       Total                          $  3,063,436         699,667       (695,959)      3,067,144
                                      ============    ============   ============    ============

    Total liabilities                      445,079         175,658       (171,950)        448,787
                                      ------------    ------------   ------------    ------------

Stockholders' equity:
  Common stock                           2,333,933              --             --       2,333,933
  Additional paid-in capital                 6,486              --             --           6,486
  Retained earnings                        570,120         524,009       (524,009)        570,120
  Treasury stock                          (292,182)             --             --        (292,182)
                                      ------------    ------------   ------------    ------------

    Total stockholders' equity           2,618,357         524,009       (524,009)      2,618,357
                                      ------------    ------------   ------------    ------------

       Total                          $  3,063,436         699,667       (695,959)      3,067,144
                                      ============    ============   ============    ============


                   CONDENSED CONSOLIDATING STATEMENT OF INCOME


                                                        Epolin
                                         Epolin         Holding      Eliminations    Consolidated
                                      ------------    ------------   ------------    ------------
Sales                                 $  2,733,892              --             --       2,733,892
Other revenue                                   --         133,740        (97,740)         36,000
                                      ------------    ------------   ------------    ------------
    Total                                2,733,892         133,740        (97,740)      2,769,892
                                      ------------    ------------   ------------    ------------

Cost of sales                              829,504              --             --         829,504
Selling, general and administrative        990,936          13,525        (97,740)        906,721
                                      ------------    ------------   ------------    ------------

    Total                                1,820,440          13,525        (97,740)      1,736,225

Operating income                           913,452         120,215             --       1,033,667

Other income - interest                      5,623           1,380             --           7,003
                                      ------------    ------------   ------------    ------------

Income before taxes                        919,075         121,595             --       1,040,670

Income taxes                               437,627          10,909             --         448,536
                                      ------------    ------------   ------------    ------------

Net income                            $    481,448         110,686             --         592,134
                                      ============    ============   ============    ============
</TABLE>


<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

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 and deferred compensation.

Stock Option Plans - The Company measures compensation cost  for
stock options using the intrinsic value method of accounting  as
prescribed by Accounting Principles Board Opinion (APB)  Opinion
No. 25, "Accounting for Stock Issued to Employees." As permitted
by FASB Statement of Financial Accounting Standards No. 123, and
explained in Note G, 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 29, 2004 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.

Advertising  Costs  -  Advertising costs, included  in  operating
expenses, are expensed as incurred. Advertising expenses amounted
to  $15,591 and $10,208 for the years ended February 29, 2004 and
February 28, 2003, respectively.

Regulations  -  The  Company expended  approximately  $18,117  to
maintain  compliance  with certain Federal  and  State  and  City
government  regulations  relative  to  the  production  of   near
infrared dyes and specialty chemicals.

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

<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

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 29,
2004, approximately 65.3% of sales were to four customers. Two of
these  customers, located in the Eastern United States, accounted
for  42.0%  of  sales. During the year ended February  28,  2003,
approximately  52.6%  of sales were to four customers,  three  of
these  customers, located in the Eastern United States, accounted
for 43.4% of sales.

NOTE D - RENTAL INCOME UNDER SUBLEASE:

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

NOTE E - INVENTORIES:

                                        2004     2003
     Raw materials and supplies     $  45,960    51,743
     Work in process                  219,337   178,659
     Finished goods                   492,470   398,910

     Total                           $757,767   629,312


NOTE F - INCOME TAXES:
                                                      2004    2003
1.  Federal and State deferred tax assets include:

  Temporary differences - principally from
    accelerated amortization of leasehold
    improvements for book purposes and
    deferred compensation                          $233,127  285,376

  Current portion                                     3,710    2,260

  Non-current portion                              $229,417  283,116


<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE F - INCOME TAXES (continued):

2.  Income tax expense:
                                                 2004        2003
     Current:
     Federal                                   $316,517   297,962
     State                                       79,770    81,783

       Total current                            396,287   379,745

  Deferred:
     Federal                                     41,600     4,009
     State                                       10,649     1,411

       Total deferred                            52,249     5,420

           Total                               $448,536   385,165


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


                                                 2004      2003
  Computed at the statutory rate               $350,119   310,561
  State income taxes (net)                       79,770    81,783
  (Increase) Decrease in deferred tax asset      52,249    (5,420)
  General business credits                      (24,535)  (27,584)
  Non-deductible items                           (9,067)   25,825

           Effective tax                       $448,536   385,165


NOTE G - EMPLOYEE BENEFITS:

Simplified  Employee  Pension Plan  -  Effective  June  1,  1994,
covering   all  eligible  participating  employees  as   defined.
Employer contributions totaled $37,568 and $26,387 for the  years
ended February 29, 2004 and February 28, 2003, 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.

<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE G - EMPLOYEE BENEFITS (continued):

Employee  Option Plan - The Company previously adopted  The  1986
Stock  Option  Plan. As of April 1996, no options  were  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.   Options
exercised  for all prior years totaled 455,000. Options  totaling
35,000  expired  for all prior years. There were  no  outstanding
options as of February 29, 2004.

The  Company  adopted the 1998 Stock Option Plan on  December  1,
1998.  Under the terms of the plan, the Company reserved  750,000
shares  of common stock for issuance pursuant to the exercise  of
options  to  be  granted under the Plan, which do  not  meet  the
requirements of Section 422 of the Code. On September  15,  2001,
the  Board  of  Directors  increased the  reserve  to  1,500,000.
Options  granted expire five or ten years after the date  granted
and  are  subject  to  a  vesting period  as  follows:  (1)  none
exercisable prior to the first anniversary of the date of  grant,
and (2) each of the options will become exercisable as to 50%  of
the  shares underlying the option on each of the first and second
anniversaries  of  the date granted. Options  exercised  for  all
prior  years  totaled 437,500. Options cancelled  for  all  prior
years totaled 75,000.

A summary of the status of the Company's 1998 stock option plan
as of February 29, 2004, and the changes during the year ending
February 29, 2004 is presented below:


                                        Weighted-Average
Fixed Options:               Shares       Exercise Price
Balance - March 1, 2002     380,000          $ .24
  Granted                    25,000            .30
  Exercised                 (37,500)           .25

Balance - February 28, 2003 367,500            .25
  Granted                   162,000            .35
  Exercised                (137,500)           .24

Balance - February 29, 2004 392,000           $.29


Exercisable at February 29, 2004    230,000
Weighted-average fair value of
  options granted during the year    $  .25

<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003



NOTE G - EMPLOYEE BENEFITS (continued):


The following table summarizes information about fixed stock
options outstanding at February 29, 2004:

<TABLE>
<CAPTION>


Outstanding Options                                     Exercisable Options
                 Number         Weighted-average        Number
Range of         Outstanding    Remaining               Exercisable   Weighted-average
Exercise Price   at 2/29/04     Contractual Life        At 2/29/04    Exercise Price

<S>               <C>           <C>                     <C>             <C>

    $.25          205,000        2.7 years              205,000         $.25
     .30           25,000        3.8                     25,000          .30
     .35          162,000       10.0                     81,000          .35

</TABLE>

There are 458,000 options attributable to future grants.


NOTE H - TREASURY STOCK:

Consists of 863,645 shares as of February 29, 2004 at a net  cost
of $292,182.

The  Company  made purchases of 184,000 shares  during  the  year
ended February 29, 2004.

NOTE I - RESEARCH AND DEVELOPMENT:

Amounts of $374,348 and $292,229 were included in cost of  sales
for  the  years ended February 29, 2004 and February  28,  2003,
respectively. All costs were borne by the Company.

NOTE J - ACQUISITIONS:

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

<PAGE>









                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003



NOTE K - ENVIRONMENTAL MATTERS

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


NOTE L - COMMITMENTS AND CONTINGENCIES:

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

LEASE OBLIGATIONS:

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


Rental   expense   charged   to   operations,   eliminated    in
consolidation, amounted to $97,740 for the years ended  February
29, 2004 and February 28, 2003, respectively.

Future minimum payments for the current option period:

   Fiscal years ending February:
             2005                $97,740
             2006                 97,740
             2007                 97,740
             2008                 97,740
             2009                 65,160

<PAGE>




                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE L - COMMITMENTS AND CONTINGENCIES (continued):


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

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

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

Deferred  compensation of $24,080 was charged to operations  for
the  years  ended  February  29, 2004  and  February  28,  2003,
respectively.


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

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

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

<PAGE>

                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FEBRUARY 29, 2004 AND FEBRUARY 28, 2003



NOTE M - STOCK DIVIDENDS:

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

NOTE N - EXTRAORDINARY ITEM:

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

The  lump  sum  payment  resulted in  an  extraordinary  loss  of
$110,261, net of income tax benefit of $83,179.