SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549

                           FORM 10-KSB

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

           For the fiscal year ended FEBRUARY 29, 2008

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

                Commission file number 000-17741

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

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

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

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

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

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

Check whether the Issuer is not required to file reports pursuant
to Section 13 or 15(d) of the Exchange Act.       [    ]

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. [   ]

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).
                                       Yes [     ]  No  [  X  ]

State Issuer's revenues for its most recent fiscal year:
                                       $3,592,940.

As  of May 16, 2008, the aggregate market value of the voting and
non-voting  common equity held by non-affiliates  of  the  Issuer
(8,259,310 shares) was approximately $4,832,000.  The  number  of
shares  outstanding of the Common Stock (no  par  value)  of  the
Issuer  as  of  the  close  of  business  on  May  16,  2008  was
11,966,355.

Documents  Incorporated by Reference:  Portions of the definitive
proxy statement for the Annual Meeting of Stockholders to be held
in 2008 are incorporated by reference into Part III hereof.

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

<PAGE>

                          EPOLIN, INC.

                        TABLE OF CONTENTS



                             PART I
                                                       Page

Item 1.        Description of Business                    3


Item 2.        Description of Property                    8

Item 3.        Legal Proceedings                          8

Item 4.        Submission of Matters to
               a Vote of Security Holders                 8

                             PART II

Item 5.        Market for Common Equity,
               Related Stockholder Matters
               and Small Business Issuer
               Purchases of Equity Securities             8

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(T).    Controls and Procedures                   15

Item 8B.       Other Information                         15


                            PART III

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

Item 10.       Executive Compensation                    16

Item 11.       Security Ownership of Certain
               Beneficial Owners
               and Management and
               Related Stockholder Matters               16

Item 12.       Certain Relationships and
               Related Transactions,
               and Director Independence                 16

Item 13.       Exhibits                                  16

Item 14.       Principal Accountant Fees and Services    16

               Signatures                                17


<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. (referred to herein as "Epolin", the "Company",
"we", "us" and "our"), 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. Our business is heavily weighted
towards the development, manufacture and sale of near infrared
dyes.  Our principal offices are located at 358-364 Adams Street,
Newark, New Jersey 07105 and our telephone number is (973) 465-
9495.  Epolin's web-site can be accessed at www.epolin.com.

     Our 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 Epolin's public offering in 1989,
our revenues were then primarily generated through the synthesis
and sale of specialty organic chemical products. Building upon
this base, Epolin 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, we maintain 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, we do not expect
our specialty chemical business to grow.

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

Infrared Dyes

     Based upon our years of experience in the specialty dye
business, we believe that Epolin possesses the largest offering
of near infrared (NIR) dyes in the world. Our EpolightT NIR dyes
absorb in the near infrared region of the electromagnetic light
spectrum which is 700nm to 1600nm.  However, we are unaware of
any statistical evidence available to support or contradict the
belief that Epolin is the largest NIR dye producer.

     EpolightT dyes are sold as pure crystalline dyes or
formulated mixtures.  We also incorporate our dyes into liquid
inks and thermoplastics pellets.  Applications for our products
cover several markets which are discussed in the following
subsections:

     Eye Protection

     We provide products to the eye protection industry that
absorb or block harmful radiation generated by industrial
welding.  We also develop and market products that protect
against lasers used in military, industrial and medical
applications.

<PAGE>

     Consumers are increasingly aware of the risk of macular
degeneration due to long term exposure to the sun's harmful NIR
light waves.  This concern has generated interest in our products
for use in sunglasses.

     We offer our eye protection absorbers in the form of
EpolightT dye powders and LuminateT dye pellets.

     Security Ink

     We have a growing business in the sale of EpolightT dyes and
inks to the security industry.  Our products have limited
visibility to the human eye but can be easily "seen" or read by
near infrared cameras or sensors.  Our products are viable tools
to thwart counterfeiting and fraud in the areas of bank cards,
currency, secure documents and consumer goods.

     Light Management

     The other market areas for our technology rely on our
ability to engineer filters that provide absorption or
transmission of specific wavelengths in electromagnetic spectrum.
The ability to "manage light" draws customers with filter
applications as diverse as thermal shields, optoelectronics,
light sensors and "night vision" used by the military.

Specialty Chemical Products

     Although we are heavily engaged in the manufacture and sale
of dyes, we maintain a level of production and sales of specialty
products made on a custom basis. The production and sale of these
products represents less than 10% of the overall business.

Effect of Compliance with Government Regulation

     Manufacturers of chemical products are subject to extensive
Federal and State environmental regulations. Although we believe
that our manufacturing processes do not result in the emission of
volatile organic vapors into the atmosphere, and that we are not
in violation of any State or Federal environmental regulations,
Epolin is required to comply with such regulations with respect
to manufacture, storage and/or disposal of toxic materials. To
our knowledge, we are 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 our business. In
addition, we are subject to the State of New Jersey Industrial
Site Recovery Act (ISRA), which, among other requirements,
requires us to obtain prior approval before relocating our
facilities or consummating a transaction that would result in a
change in control of Epolin. Our facilities are subject to
inspection to ascertain whether we have complied with State
environmental regulations.  While we believe Epolin has complied
with such regulations, there can be no assurance that we will not
be required to incur expenses to remedy any future environmental
violations discovered.  We register all new and proprietary
products with the Toxic Substances Control Agency (TSCA) which is
required in order for us 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, 2008 and February 28,
2007, we expended approximately $31,000 and $22,000,
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, we do not expect that any sum we may
have to pay in connection with environmental matters would have a
materially adverse effect on our financial condition or results
of operations in any one year.

Sources and Availability of Raw Materials

     We purchase chemicals from several large chemical
manufacturers and then further processes them into our saleable
products.  Although we limit ourselves to a relatively small
number of suppliers, we are not restricted to such suppliers, and
Management believes the availability to such raw materials is
widespread.  During the year ended February 29, 2008, no
significant difficulties were encountered in obtaining adequate
supplies of raw materials.

<PAGE>

Research and Development

     Our research and development efforts are devoted to
(i) developing new or improved products to satisfy defined market
needs, (ii) providing quality technical services to assure the
success of our products for our customers' applications, and
(iii) providing support to our manufacturing plant.

     We have committed resources to research and development of
new dyes and to our capability to provide technical services to
customers.  New applications are supported by a Director of
Research with contributions from his staff including Murray S.
Cohen, Ph.D., our Chief Scientist.

     During the years ended February 29, 2008 and February 28,
2007, the amounts spent on research and development activities
were approximately $393,000 and $441,000, respectively.  All
research and development costs are borne by Epolin.

Sales and Distribution

     Our internal sales team sells directly to customers on a
worldwide basis.  We also hire independent distributors and have
sales agents in North America, Europe and Asia.  In total, we
currently sell to customers in twenty nations.  We also use our
customer-centric website to develop new customers and marketing
opportunities at www.epolin.com.

Competition

     We experience, in management's opinion, limited competition
in all areas of our business.  Management believes that other dye
companies do not offer the broad range of dyes nor provide the
level of technical service as provided by Epolin.  We believe
that our extensive product portfolio, technical expertise and
customer support are the key factors in our competitiveness.

Technological Obsolescence

     The major portion of our product line has been used in
protective eyewear since 1976. Yet the field has proven to be an
active one and we must anticipate competition to develop.

     Epolin has committed itself to make capital investments to
maintain its position as a key supplier in this field.  There can
be no assurance that our dye technology will not be rendered less
competitive, or obsolete, by the development of new methods to
achieve laser safety and other forms of eye protection.

Patents and Proprietary Protection

     We have not generally in the past relied upon patents for
protection of our dye business or to provide us with any
significant competitive advantage as it relates to our existing
product lines.  There can be no assurance that others may not
independently develop the same, similar or alternative
technologies or otherwise obtain access to our proprietary
technologies.  However, we recently filed a patent application in
the United States for a new IR dye compound.  Even if this patent
application is granted, we cannot guaranty that such will be of
commercial benefit to the Company or otherwise offer the Company
protection from competing products.

Dependence on Certain Customers

     A material portion of our business is dependent on certain
domestic customers, the loss of which could have a material
effect on operations.  During the year ended February 29, 2008,
approximately 37.1% of sales were to three customers.  Two of
these customers, located in the Eastern United States, accounted
for 29.3% of sales.  During the year ended February 28, 2007,
approximately 37.5% of sales were to four customers.  Two of
these customers, located in the Eastern United States, accounted
for 24.5% of sales.

Employees

     We presently employ ten persons on a full time basis.  Our
employees are not represented by labor unions.  We believe that
relations with our employees are good.

<PAGE>

Uncertainties and Risk Factors

     Our business involves a high degree of risk. In addition to
other information in this report, potential investors should
carefully consider the risks and uncertainties described below
and the other information in this report before deciding whether
to invest in shares of our common stock.  Each of the following
risks may materially and adversely affect our business, results
of operations and financial condition.  These risks may cause the
market price of our common stock to decline, which may cause you
to lose all or a part of the money you paid to buy our common
stock.

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

     DEPENDENCE ON KEY CUSTOMERS.  Our customers are
concentrated, so the loss of one or more key customers could
significantly reduce our revenues.  During the year ended
February 29, 2008, approximately 37.1% of sales were to three
customers.  Two of these customers, located in the Eastern United
States, accounted for 29.3% of sales.  During the year ended
February 28, 2007, approximately 37.5% of sales were to four
customers.  Two of these customers, located in the Eastern United
States, accounted for 24.5% of sales.

     TECHNOLOGICAL CHANGES.  The major portion of our product
line has been used in protective eyewear since 1976. Yet the
field has proven to be an active one and we must anticipate
competition to develop.  Epolin has committed itself to make
capital investments to maintain its position as a key supplier in
this field.  There can be no assurance that our dye technology
will not be rendered less competitive, or obsolete, by the
development of new methods to achieve laser safety and other
forms of eye protection.

     COMPETITION.  We experience, in management's opinion,
limited competition in all areas of our business.  Management
believes that other dye companies do not offer the broad range of
dyes nor provide the level of technical service as provided by
Epolin.  We believe that our extensive product portfolio,
technical expertise and customer support are the key factors in
our competitiveness.   However, as mentioned above, there can be
no assurance that we will be able to maintain our competitive
position in the event new methods to achieve laser safety and
other forms of eye protection are developed.

     ENVIRONMENTAL REGULATION.  Manufacturers of chemical
products are subject to extensive Federal and State environmental
regulations.  While we believe Epolin has complied with such
regulations, there can be no assurance that we 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 our business.

     PATENTS AND PROPRIETARY PROTECTION.  We have not generally
in the past relied upon patents for protection of our dye
business or to provide us with any significant competitive
advantage as it relates to our existing product lines.  There can
be no assurance that others may not independently develop the
same, similar or alternative technologies or otherwise obtain
access to our proprietary technologies.  However, we recently
filed a patent application in the United States for a new IR dye
compound.  Even if this patent application is granted, we cannot
guaranty that such will be of commercial benefit to the Company
or otherwise offer the Company protection from competing
products.

     SOURCES AND AVAILABILITY OF RAW MATERIALS.   We purchase
chemicals from several large chemical manufacturers and then
further process them into its saleable products.  Although we
limit ourselves to a relatively small number of suppliers, we are
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 our business.

     WE ARE DEPENDENT ON KEY PERSONNEL INCLUDING OUR EXECUTIVE
OFFICERS.  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.  The
market for such persons remains competitive and the relative
small size of Epolin may make it more difficult for us to recruit
and retain qualified persons.  In addition, and since we are a
small company, a loss of one or more of our current officers
could severely and negatively impact our operations.

<PAGE>

     DIVIDENDS.   During fiscal 2007, Epolin approved the
adoption of a dividend policy under which Epolin will issue a
regular annual cash dividend on shares of its Common Stock.  The
amount of the dividend, record date and payment date will be
subject to approval every year by the Board of Directors.  As a
result, any such future dividends will depend on earnings, other
financial requirements and other factors, many of which may be
beyond the control of Epolin.

     MAINTAINING AND IMPROVING OUR FINANCIAL CONTROLS MAY STRAIN
OUR RESOURCES AND DIVERT MANAGEMENT'S ATTENTION.  We are subject
to the requirements of the Securities Exchange Act of 1934,
including the requirements of the Sarbanes-Oxley Act of 2002.
The requirements of these rules and regulations have increased,
and we expect will continue to increase, our legal and financial
compliance costs, make some activities more difficult, time-
consuming or costly and may also place undue strain on our
personnel, systems and resources. The Sarbanes-Oxley Act
requires, among other things, that we maintain effective
disclosure controls and procedures and internal control over
financial reporting. This can be difficult to do. As a result of
this and similar activities, management's attention may be
diverted from other business concerns, which could have a
material adverse effect on our business, financial condition and
results of operations.

     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.   We believe that there are a small
number of market makers that make a market in our Common Stock.
The actions of any of these market makers could substantially
impact the volatility of our Common Stock.

     POTENTIAL FUTURE SALES PURSUANT TO RULE 144.  Many of the
shares of Common Stock presently held by management and others
are "restricted securities" as that term is defined in Rule 144,
promulgated under the Securities Act.  Under Rule 144, a person
(or persons whose shares are aggregated) who has satisfied a
certain holding period, may, under certain circumstances sell
such shares or a portion of such shares.  Effective as of
February 15, 2008, the holding period for the resale of
restricted securities of reporting companies was shortened from
one year to six months.  Additionally, the SEC substantially
simplified Rule 144 compliance for non-affiliates by allowing non-
affiliates of reporting companies to freely resell restricted
securities after satisfying a six-month holding period (subject
only to the Rule 144(c) public information requirement until the
securities have been held for one year) and by allowing non-
affiliates of non-reporting companies to freely resell restricted
securities after satisfying a 12-month holding period.  Such
holding periods have already been satisfied in many instances.
Therefore, actual sales or the prospect of sales of such shares
under Rule 144 in the future may depress the prices of the
Company's securities.

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

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

<PAGE>

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

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

     Except as required by the Federal Securities Law, Epolin
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.

     We presently occupy approximately 19,500 square feet of
manufacturing, warehouse and administrative space in Newark, New
Jersey which property the Company has occupied since June 1989.
The property is currently owned by Epolin Holding Corp. ("Epolin
Holding"), our wholly-owned subsidiary.  We presently occupy the
property pursuant to a lease, effective November 1, 1996, which
was for an initial term of five years with three five years
options with annual rent of $97,740, subject to annual
adjustments based on increases in the Consumer Price Index which
adjustments have been waived by Epolin Holding.   Such rent
includes real estate taxes and insurance expenses.  Generally, we
expect that the lease will be renewed in the normal course of
business.  We believe that the current facility is adequate for
the foreseeable future.

     We entered into a sublease with a non-related party
effective September 2005 for an initial term ending October 31,
2007 pursuant to which we are subleasing approximately 2,500
square feet of our space for the subtenant to operate a
laboratory.  Under the terms of the arrangement, the subtenant is
to pay an annual rental of $18,000.  The subtenant is currently
in arrears.


Item 3.   Legal Proceedings.

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


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

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



                                PART II

Item 5.   Market for Common Equity, Related Stockholder
          Matters and Small Business Issuer Purchases of Equity
          Securities.

Market Information

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

<PAGE>


Period                                 Bid Prices

Fiscal year ended February 29, 2008:    High      Low

March 1, 2007 to May 31, 2007           $.79      $.66
June 1, 2007 to Aug. 31, 2007           $.72      $.62
Sept. 1, 2007 to Nov. 30, 2007          $.68      $.61
Dec. 1, 2007 to Feb. 29, 2008           $.67      $.62

Fiscal year ended February 28, 2007:    High      Low

March 1, 2006 to May 31, 2006           $.97      $.71
June 1, 2006 to Aug. 31, 2006           $.83      $.65
Sept. 1, 2006 to Nov. 30, 2006          $.87      $.71
Dec. 1, 2006 to Feb. 28, 2007           $.86      $.67

Holders

     As of May 16, 2008, there were approximately 280
stockholders of record of the Company's Common Stock.  This does
not reflect persons or entities that hold their stock in nominee
or "street name".

Dividends

     Subsequent to the end of fiscal 2006, our Board of Directors
approved the adoption of a dividend policy under which we will
issue a regular annual cash dividend on shares of our Common
Stock.  The amount of the dividend, record date and payment date
will be subject to approval every year by the Board of Directors.
In accordance with the new dividend policy, in April 2006, the
Board of Directors declared and we paid the first regular annual
cash dividend of $0.02 per share in May 2006.  In addition, in
December 2006 and considering our cash position, the Board of
Directors declared a special cash dividend of $0.02 per share
which was paid on January 3, 2007.   In April 2007, the Board of
Directors declared and we paid in May 2007 the second regular
annual cash dividend of $0.02 per share.  In addition, in October
2007, the Board of Directors declared and we paid another special
cash dividend of $0.02 per share which was paid on January 7,
2008.   In April 2008, the Board of Directors declared and we
paid in May 2008 the third regular annual cash dividend of $0.02
per share.

Recent Sales of Unregistered Securities

     In fiscal 2006, we issued 100,000 shares of Common Stock
pursuant to an employment agreement and issued 30,000 shares of
Common Stock upon exercise of previously granted stock options at
an aggregate exercise price of $8,300.  In fiscal 2007, we issued
56,000 shares of Common Stock upon exercise of previously granted
stock options at an aggregate exercise price of $16,210.   No
shares were issued in fiscal 2008.

     In fiscal 2006, we granted an aggregate of 200,000 stock
options exercisable at $.54 per share.  In addition, in fiscal
2006, we cancelled an aggregate of 162,000 stock options
exercisable at $.35 per share granted in fiscal 2004 and issued
an equal number of replacement stock options to holders of such
options exercisable at $.41 per share.  No options were granted
in fiscal 2007 and 2008.  All of such stock options expire five
or ten years after the date granted and are subject to various
vesting periods.

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

Equity Compensation Plan Information

      Information regarding equity compensations plans, as of
February 29, 2008, is set forth in the table below:














                                               Number of
              Number of                        securities
              securities      Weighted-        remaining
              to be issued    average          available for
              upon            Exercise price   future issuance
              exercise of     of               under equity
              outstanding     Outstanding      compensation plans
              options,        options,         (excluding securities
              warrants and    Warrants and     reflected
Plan category rights (a)      rights (b)       in column (a)) (c)


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

Equity
compensation
plans not     416,000         $0.50            498,000
approved
by security
holders

Total         416,000         $0.50            498,000

     The foregoing equity compensation plan information relates
to the stock options granted under the 1998 Stock Option Plan, as
well as 100,000 stock option granted outside of the plan to Greg
Amato.

Small Business Issuer Purchases of Equity Securities

     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.
There were no repurchases made by the Company of shares of its
Common Stock during the fiscal year ended February 29, 2008.  In
prior years, since the adoption of the program in August 2001, a
total of 331,500 shares were repurchased at a cumulative cost of
$195,766.


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", "we", "us" and "our") is a
specialized chemical company primarily engaged in the
manufacturing, marketing, research and development of infrared
dyes, laser absorbing dyes and infrared dye formulations.  Our
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.  We also manufacture specialty chemicals for
certain chemical manufacturers.

     We have succeeded in growing over the last decade based on
the development, application and manufacture of near infrared
dyes.     In recent years, we have embarked on an aggressive
campaign to make our dyes easier to use.  In this regard, we
offer technical service support for extrusion and injection
molding of our dyes with a variety of resin substrates.  Our dyes
can now be uniquely formulated to each customer's specifications
and manufactured in our own facility.  In addition, we hold a
broad range of dyes in inventory for immediate sale.

     We sell our products to manufacturers of plastics/resins,
credit cards, electronics, glass and other basic materials.  Our
customers are located in all regions of the world, although a
material portion of our business is dependent on certain domestic
customers, the loss of which could have a material effect on
operations.  As the service economy continues to dwarf the
manufacturing sector in the United States, we now offer our
customers added service in the form of formulated inks and
resins.  This has resulted in increasing our worldwide sales of
these products and, we believe, lessens the threat of competition
from lower cost dyes manufactured abroad.  During the year ended
February 29, 2008, approximately 37.1% of sales were to three
customers.  Two of these customers, located in the Eastern United
States, accounted for 29.3% of sales.  During the year ended
February 28, 2007, approximately 37.5% of sales were to four
customers.  Two of these customers, located in the Eastern United
States, accounted for 24.5% of sales.  The loss of one or more
key customers could have a material adverse effect on the
Company.

<PAGE>

Results of Operations

     The following tables set forth operations data for the year
ended February 29, 2008 and year ended February 28, 2007.

                         2008          2007           % change

Sales                    $3,592,940    $3,609,674       -0.5%

Gross profit              2,188,931     2,155,593        1.5%

Gross profit percentage       60.9%         60.0%        0.9%

Selling, general &
administrative            1,235,078     1,280,547       -3.6%

Operating income            953,853       875,046        9.0%
Other Income                174,229        88,451       97.0%

Income before taxes       1,128,082       963,497       17.1%

Income taxes                404,455       340,569       18.8%

Net income (after taxes)   $723,627      $622,928       16.2%


Sales

     For the year ended February 29, 2008, sales were $3,593,000
as compared to $3,610,000 for the year ended February 28, 2007, a
decrease of $17,000 or 0.5%.

     Sales in the eye protection market, which represents our
oldest and traditional market, increased by $292,000 for fiscal
2008 compared to fiscal 2007, while sales in the ink and coating
market decreased by $225,000 in the same period.  Sales in the
light management market increased by $5,000 for fiscal 2008
compared to the prior year.   The decrease in sales in the ink
and coating market is primarily due to reduced sales in the
security inks business, which had been a key area of our growth
from 2005 to 2007, but has declined since then to approximately
the level of sales we achieved in this market in fiscal 2005.

     Sales overseas decreased in Asia and Europe for year ended
February 29, 2008 while sales increased in the United States for
the year ended February 29, 2008 compared to the prior year.
For fiscal 2008, sales in Asia decreased to $481,000 from
$508,000 while in Europe, sales decreased for fiscal 2008 to
$273,000 from $308,000 for fiscal 2007.  In the United States,
sales increased to $2,838,000 in fiscal 2008 from $2,775,000 in
fiscal 2007.

Gross Profit

     Gross profit, defined as sales less cost of sales, was
$2,189,000 or 60.9% of sales for the year ended February 29, 2008
compared to $2,156,000 or 60.0% of sales for the year ended
February 28, 2007.

     Cost of sales was $1,404,000 for the year ended February 29,
2008 which represented 39.1% of sales compared to $1,454,000 for
the year ended February 28, 2007 which represented 40.3% of
sales.  Total cost of materials increased $13,000 in fiscal 2008
compared to the prior year, while total factory overhead
decreased $63,000 in fiscal 2008 compared to the prior year,
primarily due to decreases in research and development salaries
and decreases in applied factory overhead.


<PAGE>


Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased to
$1,235,000 or 34.4% of sales for the year ended February 29, 2008
compared to $1,281,000 or 35.4% of sales for the year ended
February 28, 2007, a decrease of $46,000.  Such decrease in
absolute dollars was primarily due to a decrease in officers'
salaries (primarily from the Chairman of the Board's decision to
become a part-time employee effective in September 2006 with a
corresponding reduction in his base salary) and a decrease in
commissions and consulting fees in fiscal 2008 offset by an
increase in administrative salaries, directors and officers
insurance and applied factory overhead.

Operating Income

     Operating income, in terms of absolute dollars, increased to
$954,000 for fiscal 2008 from $875,000 for fiscal 2007, an
increase of $79,000.  Although sales decreased in 2008 compared
to the prior year, operating income increased due to a greater
decrease in cost of sales and selling, general and administrative
expenses for fiscal 2008 compared to fiscal 2007.  As a
percentage of sales, operating income increased to 26.5% of sales
for fiscal 2008 from 24.2% of sales for fiscal 2007.

Other Income

     Total other income for the year ended February 29, 2008 was
$174,000 as compared to $88,000 for the year ended February 28,
2007.  Such increase was primarily due to an insurance
reimbursement of $61,000 we received in the quarter ended
November 30, 2007 for flood damage for which there was not a
comparable item in fiscal 2007. We realized rental income of
$18,000 for fiscal 2008 compared to rental income of $17,000 for
fiscal 2007.  Our interest income increased to $89,000 for fiscal
2008 from $72,000 in fiscal 2007.

Net Income

     During fiscal 2008, we reported income before taxes of
$1,128,000 as compared to income before taxes of $963,000 for
fiscal 2007.  Income taxes were $404,000 for fiscal 2008 compared
to $341,000 for the year ended February 28, 2007.  Changes in
income taxes are generally attributed to changes from period to
period in sales and expenses.  Net income after taxes was
$724,000 or $0.06 per share for the year ended February 29, 2008
compared to net income after taxes of $623,000 or $0.05 per share
for the year ended February 28, 2007.

     Net income in the future will be dependent upon our ability
to increase revenues faster than increases, if any, in our
selling, general and administrative expenses, research and
development expenses and other expenses.  Prior to fiscal 2007,
sales had grown for a number of consecutive years.  In fiscal
2007, however, sales decreased by $91,000 compared to fiscal 2006
and, in fiscal 2008, sales decreased by $17,000 compared to
fiscal 2007.   While sales have decreased, net income did improve
in fiscal 2008 by $101,000 compared to fiscal 2007 and net income
increased by $29,000 in fiscal 2007 compared to fiscal 2006.

Operations Outlook

     Since fiscal 2005, we have been going through a period of
reassessing our direction in order to increase value for our
shareholders.  Our business, though reasonably healthy, did not
grow to the degree management anticipated from 2002 to 2005.
While the sales level of $2,880,000 reached during fiscal 2005
was at the time an all time high for the Company, it was not
significantly more than the sales level we achieved in 2004
($2,734,000), 2003 ($2,690,000) or 2002 ($2,550,000). The plateau
of sales during that four years was in contrast to the greater
sales growth the Company experienced in certain years prior to
2002.  Based upon these observations, we tried to learn what
could be done to stimulate growth and recapture the promise of
our early years.  As a result, we assembled a business plan and
began to make changes consistent with such plan.  The plan showed
us that developments coming out of our R&D were not reaching the
marketplace and therefore, not commanding their proper attention.
Through this teamwork of R&D with marketing, we revamped our web
site, streamlined our pricing structure and reached out to our
key customers and agents. We believe the business plan made clear
the necessity of hiring a Sales/Marketing executive along with
back up technical service help, both of which have been
accomplished.  In order to cover the cost of these additional
personnel and place a greater emphasis on company growth, we
suspended in fiscal 2005 the cash dividends program which we had
been in place during fiscal 2002, 2003 and 2004 in order to place
greater emphasis on business growth.  All of the foregoing
resulted in strong sales growth and we achieved $3,701,000 in
sales for fiscal 2006 which was $821,000 or 28.5% greater than
the prior year.  Nevertheless, in fiscal 2007, sales decreased to
$3,610,000, a decrease of 2.5% from the prior year, and in fiscal
2008, sales decreased to $3,593,000, a decrease of 0.5% from the
prior year.  During these periods of reduced sales, we had a
major decline in sales of security inks for the credit card
market which had been a key area of our growth in recent periods.
While this market remains a major source of business for us, we
may not be able achieve the same type of growth in the security
inks market in the future.  Nevertheless, we are confident that
with our core group of products, we will be able to maintain
sales in our principal markets while always seeking new areas for
the use of our dyes.

<PAGE>

Liquidity and Capital Resources

     Our primary source of funds is cash flow from operations in
the normal course of selling products.  On February 29, 2008, we
had working capital of $3,007,000, a debt to equity ratio of 0.15
to 1, and stockholders' equity of $3,911,000 compared to working
capital of $2,735,000, a debt to equity ratio of 0.17 to 1, and
stockholders' equity of $3,652,000 on February 28, 2007.  On
February 29, 2008, we had $1,980,000 in cash and cash
equivalents, total assets of $4,478,000 and total liabilities of
$566,000, compared to $1,751,000 in cash and cash equivalents,
total assets of $4,243,000 and total liabilities of $591,000 on
February 28, 2007.

     Net cash provided by operating activities for the year ended
February 29, 2008 was $802,000 which was primarily the result of
net income of $724,000, plus increases in accrued expenses of
$26,000 and taxes payable of $31,000, and decreases in prepaid
expenses of $17,000, offset by an increase in accounts receivable
of $71,000 and decreases in accounts payable of $42,000.  Net
cash provided by operating activities for the year ended February
28, 2007 was $845,000 which was primarily the result of net
income of $623,000, plus decreases in accounts receivable of
$149,000 and increases in accounts payable of $40,000, offset by
a decrease in accrued expenses of $62,000.

     Net cash used by investing activities for year ended
February 29, 2008  was $94,000 due to equipment purchases of
$120,000 offset by a decrease in cash value of a life insurance
policy of $26,000, while net cash used by investing activities
was $121,000 for the year ended February 28, 2007 due to
equipment purchases of $109,000 offset by an increase in cash
value of a life insurance policy of $12,000.  For the year ended
February 29, 2008, net cash used by financing activities was
$479,000 due to two cash dividends having been paid totaling
$479,000, and was $488,000 for the year ended February 28, 2007
which was due to two cash dividends having been paid totaling
$479,000 together with the repurchase of $26,000 of stock in
fiscal 2007 offset by $16,210 for the issuance of common stock.

     We anticipate, based on currently proposed plans and
assumptions relating to our operations, that our 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.  Our contemplated cash requirements for fiscal 2009 and
beyond will depend primarily upon level of sales of our products,
inventory levels, product development, sales and marketing
expenditures and capital expenditures.

     Inflation has not significantly impacted our operations.

Significant Accounting Policies

     Our discussion and analysis of the Company's financial
condition and results of operations are based upon our
consolidated financial statements which have been prepared in
conformity with U.S. generally accepted accounting principles.
Our significant accounting policies are described in Note B to
the consolidated financial statements included elsewhere herein.
The application of our critical accounting policies is
particularly important to the portrayal of our financial position
and results of operations.  These critical accounting policies
require us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities.  We
believe the following critical accounting policies reflect the
more significant judgments and estimates used in the preparation
of the consolidated financial statements.

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

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

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

<PAGE>

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

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

     In December 2004, the FASB issued Statement of Financial
Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment".
SFAS 123R revises SFAS No. 123 and supersedes APB 25 to require
companies to measure and recognize in operations the cost of
employee services received in exchange for an award of equity
instruments based on the grant-date fair value.  That cost will
be recognized over the vesting period during which an employee is
required to provide service in exchange for the award.  On
April 14, 2005, the Securities and Exchange Commission issued a
ruling that amended the effective date for SFAS 123R. As a
result, we will adopt SFAS 123R on March 1, 2006.

Other Information

     Subsequent to the end of fiscal 2006, the Board of Directors
approved the adoption of a dividend policy under which Epolin
will issue a regular annual cash dividend on shares of its Common
Stock.  The amount of the dividend, record date and payment date
will be subject to approval every year by the Board of Directors.
In accordance with the new dividend policy, in April 2006, the
Board of Directors declared and Epolin paid the first regular
annual cash dividend of $0.02 per share in May 2006.  In
addition, in December 2006 and considering our cash position, the
Board of Directors declared a special cash dividend of $0.02 per
share which was paid on January 3, 2007.   In April 2007, the
Board of Directors declared and Epolin paid in May 2007 the
second regular annual cash dividend of $0.02 per share.  In
addition, in October 2007, the Board of Directors paid another
special cash dividend of $0.02 per share which was paid on
January 7, 2008.   In April 2008, the Board of Directors declared
and Epolin paid the third regular annual cash dividend of $0.02
per share.

     In August 2001, our Board of Directors 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.  There were no
repurchases made by the Company of shares of its Common Stock
during the fiscal year ended February 29, 2008.   In prior years,
since the adoption of the program, a total of 331,500 shares were
repurchased at a cumulative cost of $195,766.

     In September 2007, Murray S. Cohen advised the Board of
Directors that beginning as of October 1, 2007 and in accordance
with his employment agreement he will reduce the time he devotes
to Company business to approximately 25% of his time.   Dr. Cohen
had been devoting approximately 50% of his time to the business
since September 2006.  Dr. Cohen has been and will remain
Chairman of the Board and Chief Scientist of the Company.

Off-Balance Sheet Arrangements

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

<PAGE>

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(T). Controls and Procedures.

     Under the supervision and with the participation of our
management, including the Principal Executive Officer and
Principal Financial Officer, we have evaluated the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-
15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of
the period covered by this report.  Based on that evaluation, the
Principal Executive Officer and Principal Financial Officer have
concluded that, as of February 29, 2008, these disclosure
controls and procedures were effective to ensure that all
information required to  be disclosed by us in the reports that
we file or submit under the Exchange Act is: (i) recorded,
processed, summarized and reported, within the time periods
specified in the Commission's rule and forms; and (ii)
accumulated and communicated to our management, including our
Principal Executive Officer and Principal Financial Officer, as
appropriate to allow timely decisions regarding required
disclosure.

     There have been no material changes in internal control over
financial reporting that occurred during the fourth fiscal
quarter that have materially affected, or are reasonably likely
to materially affect our internal control over financial
reporting.

Management's Annual Report on Internal Control
over Financial Reporting

     Our management is responsible for establishing and
maintaining adequate internal control over financial reporting.
Internal control over financial reporting is a process designed
by, or under the supervision of, the Principal Executive Officer
and Principal Financial Officer and effected by our Board of
Directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.

     Our evaluation of internal control over financial reporting
includes using the COSO framework, an integrated framework for
the evaluation of internal controls issued by the Committee of
Sponsoring Organizations of the Treadway Commission, to identify
the risks and control objectives related to the evaluation of our
control environment.

     Based on our evaluation under the frameworks described
above, our management has concluded that our internal control
over financial reporting was effective as of February 29, 2008.

     This annual report does not include an attestation report of
the Company's registered public accounting firm regarding
internal control over financial reporting. Management's report
was not subject to attestation requirements by the company's
registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit the company to
provide only management's report in this annual report.


Item 8B.  Other Information.

     Not applicable.

<PAGE>

                             PART III

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

     There is incorporated by reference herein information which
will be contained in the Company's definitive proxy statement to
be filed within 120 days of the Company's year end in connection
with the Annual Meeting of Stockholders to be held in 2008.


Item 10.  Executive Compensation.

     There is incorporated by reference herein information which
will be contained in the Company's definitive proxy statement to
be filed within 120 days of the Company's year end in connection
with the Annual Meeting of Stockholders to be held in 2008.


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

     There is incorporated by reference herein information which
will be contained in the Company's definitive proxy statement to
be filed within 120 days of the Company's year end in connection
with the Annual Meeting of Stockholders to be held in 2008.


Item 12.  Certain Relationships and Related Transactions,
          and Director Independence.

     There is incorporated by reference herein information which
will be contained in the Company's definitive proxy statement to
be filed within 120 days of the Company's year end in connection
with the Annual Meeting of Stockholders to be held in 2008.


Item 13.  Exhibits.

     3.1  Epolin Inc.'s certificate of incorporation as  amended (1)
     3.2  Epolin Inc.'s by-laws(1)
     4.1  Specimen certificate for common stock(1)
     31.1 Certification of Chief Executive Officer pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002 (Rules
          13a-14 and 15d-14 of the Exchange Act)
     31.2 Certification of Principal Financial Officer pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules
          13a-14 and 15d-14 of the Exchange Act)
     32.1 Certification pursuant to Section 906 of the Sarbanes-
          Oxley Act of 2002 (18 U.S.C. 1350)


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


Item 14.  Principal Accountant Fees and Services.

     There is incorporated by reference herein information which
will be contained in the Company's definitive proxy statement to
be filed within 120 days of the Company's year end in connection
with the Annual Meeting of Stockholders to be held in 2008.

<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,
                                   Chairman of the Board


                              Dated:   May 28, 2008


     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/ Greg Amato           Chief Executive Officer        05/28/2008
Greg Amato               (Principal Executive Officer)


/s/ Murray S. Cohen      Chairman of the Board,         05/28/2008
Murray S. Cohen          Secretary and Director



/s/ James Ivchenko       President and Director         05/28/2008
James Ivchenko           (Principal Financial Officer)



/s/ Morris Dunkel        Director                       05/28/2008
Morris Dunkel



-------------------      Director                       ----------
James R. Torpey, Jr.



/s/ Herve A. Meillat     Director                       05/29/2008
Herve A. Meillat

<PAGE>






                           EPOLIN, INC. AND SUBSIDIARY

                              FINANCIAL STATEMENTS

                                   YEARS ENDED

                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007







<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

Notes to Consolidated Financial Statements                                7 - 20


<PAGE>

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



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


         We have audited the accompanying Consolidated Balance Sheets of Epolin,
Inc. and it's wholly owned Subsidiary as of February 29, 2008 and February 28,
2007 and the related Consolidated Statements of Income, Stockholders' Equity and
Cash Flows for each of the two years in the periods ended February 29, 2008 and
February 28, 2007. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. 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.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Epolin Inc. and
Subsidiary as of February 29, 2008 and February 28, 2007, and the results of its
operations and its cash flows for each of the two years in the periods ended
February 29, 2008 and February 28, 2007, in conformity with accounting
principles generally accepted in the United States of America.


/s/ WEISMANN ASSOCIATES LLC
---------------------------
Weismann Associates LLC
Branchburg, NJ 08865

May 5, 2008

                                        1
<PAGE>
<TABLE>
<CAPTION>


                                  EPOLIN, INC. AND SUBSIDIARY
                                  CONSOLIDATED BALANCE SHEETS

                                                                     ASSETS

                                                                          February 29,     February 28,
                                                                              2008             2007
                                                                          ------------     ------------
<S>                                                                       <C>                 <C>
Current assets:
  Cash and cash equivalents                                               $  1,980,142        1,751,346
  Accounts receivable                                                          618,445          546,952
  Inventories                                                                  642,529          651,648
  Prepaid expenses                                                              60,412           77,767
  Prepaid taxes                                                                     --            1,920
  Deferred tax assets-current portion                                           25,182           10,288
                                                                          ------------     ------------

    Total current assets                                                     3,326,710        3,039,921
                                                                          ------------     ------------
Plant, property and equipment - at cost:
  Land                                                                          81,000           81,000
  Building and improvements                                                    710,758          710,758
  Laboratory equipment                                                         189,300          272,685
  Furniture and office equipment                                               215,764          160,697
  Leasehold improvements                                                       458,495          456,790
                                                                          ------------     ------------

    Total                                                                    1,655,317        1,681,930

  Less:  Accumulated depreciation and amortization                             800,593          858,851
                                                                          ------------     ------------

    Net plant, property and equipment                                          854,724          823,079
                                                                          ------------     ------------
Other assets:
  Deferred tax assets-non current portion                                       94,973          152,425
  Cash value - life insurance policy                                           201,369          227,258
                                                                          ------------     ------------

    Total other assets                                                         296,342          379,683
                                                                          ------------     ------------

      Total                                                               $  4,477,776        4,242,683
                                                                          ============     ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        2
<PAGE>
<TABLE>
<CAPTION>
                           EPOLIN, INC. AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                          February 29,     February 28,
                                                                              2008             2007
                                                                          ------------     ------------
<S>                                                                       <C>                    <C>
Current liabilities:
  Accounts payable                                                        $      9,660           51,782
  Accrued expenses                                                             270,755          244,905
  Taxes payable:
    Payroll                                                                      1,889            1,889
    Income                                                                      37,400            6,536
                                                                          ------------     ------------

      Total current liabilities                                                319,704          305,112


Other liabilities - Deferred compensation                                      246,683          285,864
                                                                          ------------     ------------

      Total liabilities                                                        566,387          590,976
                                                                          ------------     ------------
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;
    12,915,000 shares issued, and 11,966,355
    shares outstanding at 2008 and 2007, respectively                        2,364,693        2,364,693
    Additional paid-in capital                                                  76,820           62,111
    Retained earnings                                                        1,820,958        1,575,985
                                                                          ------------     ------------

      Total                                                                  4,262,471        4,002,789
    Less: Treasury stock - at cost                                             351,082          351,082
                                                                          ------------     ------------

     Total stockholders' equity                                              3,911,389        3,651,707
                                                                          ------------     ------------

      Total                                                               $  4,477,776        4,242,683
                                                                          ============     ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>

                               EPOLIN, INC. AND SUBSIDIARY
                            CONSOLIDATED STATEMENTS OF INCOME
                   YEARS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

                                                                              2008             2007
                                                                          ------------     ------------
<S>                                                                       <C>                 <C>
Sales                                                                     $  3,592,940        3,609,674
                                                                          ------------     ------------
Cost of sales and expenses:
  Cost of sales                                                              1,404,009        1,454,081
  Selling, general and administrative                                        1,235,078        1,280,547
                                                                          ------------     ------------

    Total                                                                    2,639,087        2,734,628
                                                                          ------------     ------------

Operating income                                                               953,853          875,046
                                                                          ------------     ------------
Other income:
  Rental income                                                                 18,000           16,500
  Miscellaneous                                                                 66,881               --
  Interest                                                                      89,348           71,951
                                                                          ------------     ------------

    Total                                                                      174,229           88,451
                                                                          ------------     ------------

Income before taxes                                                          1,128,082          963,497

Income taxes                                                                   404,455          340,569
                                                                          ------------     ------------

Net income                                                                $    723,627          622,928
                                                                          ============     ============
Per share data:
  Basic earnings per common share                                         $       0.06             0.05
                                                                          ============     ============
  Fully diluted earnings per common share                                 $       0.06             0.05
                                                                          ============     ============
  Weighted average number of common shares outstanding                      11,966,355       11,964,806
                                                                          ============     ============
  Fully diluted number of common shares outstanding                         12,004,973       12,003,424
                                                                          ============     ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        4
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               YEARS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

                                Number of                Additional
                               Outstanding      Common     Paid-in-     Retained      Treasury     Treasury    Stockholders'
                                  Shares        Stock      Capital      Earnings       Shares        Costs        Equity
                                ----------   ----------   ----------   ----------    ----------   ----------    ----------
<S>                             <C>          <C>               <C>      <C>             <C>         <C>          <C>
Balance - March 1, 2006         12,859,000   $2,348,483        6,486    1,431,711       918,645     (325,532)    3,461,148

Dividends paid                          --           --           --     (478,654)           --           --      (478,654)

Common stock issued for
 stock option                       56,000       16,210       33,000           --            --           --        49,210

Valuation of options expensed           --           --       22,625           --            --           --        22,625

Treasury stock purchased                --           --           --           --        30,000      (25,550)      (25,550)

Net income                              --           --           --      622,928            --           --       622,928
                                ----------   ----------   ----------   ----------    ----------   ----------    ----------

Balance - February 28, 2007     12,915,000   $2,364,693       62,111    1,575,985       948,645     (351,082)    3,651,707
                                ==========   ==========   ==========   ==========    ==========   ==========    ==========

Balance - March 1, 2007         12,915,000   $2,364,693       62,111    1,575,985       948,645     (351,082)    3,651,707

Dividends paid                          --           --           --     (478,654)           --           --      (478,654)

Valuation of options expensed           --           --       14,709           --            --           --        14,709

Net income                              --           --           --      723,627            --           --       723,627
                                ----------   ----------   ----------   ----------    ----------   ----------    ----------

Balance - February 29, 2008     12,915,000   $2,364,693       76,820    1,820,958       948,645     (351,082)    3,911,389
                                ==========   ==========   ==========   ==========    ==========   ==========    ==========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               YEARS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007


                                                                              2008             2007
                                                                          ------------     ------------
<S>                                                                       <C>                   <C>
Cash flows from operating activities:
  Net income                                                              $    723,627          622,928
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                              88,336           64,704
     Deferred tax expense                                                       42,558           13,609
     Stock based compensation                                                   14,709           55,625
     Obligation under deferred compensation agreement                          (39,181)         (20,628)
  (Increase) decrease in:
     Accounts receivable                                                       (71,493)         148,699
     Inventories                                                                 9,119           (3,775)
     Prepaid expenses                                                           17,355          (14,695)
     Prepaid taxes                                                               1,920             (321)
  Increase (decrease) in:
     Accounts payable                                                          (42,122)          39,971
     Accrued expenses                                                           25,850          (62,150)
     Taxes payable                                                              30,864              918
                                                                          ------------     ------------

        Net cash provided by operating activities                              801,542          844,885
                                                                          ------------     ------------
Cash flows from investing activities:
  (Increase) decrease in cash value - life insurance policy                     25,889          (12,347)
  Payments for equipment                                                      (119,981)        (108,577)
                                                                          ------------     ------------

        Net cash used by investing activities                                  (94,092)        (120,924)
                                                                          ------------     ------------
Cash flows from financing activities:
  Issuance of common stock                                                          --           16,210
  Treasury stock purchased                                                          --          (25,550)
  Dividends paid                                                              (478,654)        (478,654)
                                                                          ------------     ------------

        Net cash used by financing activities                                 (478,654)        (487,994)
                                                                          ------------     ------------

Increase (decrease) in cash                                                    228,796          235,967

Cash and cash equivalents:
  Beginning                                                                  1,751,346        1,515,379
                                                                          ------------     ------------

  Ending                                                                  $  1,980,142        1,751,346
                                                                          ============     ============
Supplemental disclosures of cash flows:
  Income taxes paid                                                       $    337,842          322,000
                                                                          ============     ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        6
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE A - Organization:

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

         The Company's wholly owned Subsidiary, Epolin Holding, Corp., was
incorporated in New Jersey as a real estate holding company whose assets consist
of land and a building. On January 29, 1998, the Company acquired 100% of the
stock in Epolin Holding Corporation. Prior to acquisition, two
officers/stockholders of the Company controlled it.

NOTE B - Summary of Significant Accounting Policies:

Basis of Presentation - The Consolidated Financial Statements reflect all normal
and recurring adjustments that, in the opinion of management, are necessary for
a fair presentation of the financial position, results of operations and cash
flows of the Company for the periods presented. All significant inter-company
accounts and transactions have been eliminated.

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 at various times
of the year had cash deposits in financial institutions and a brokerage house in
excess of the amount insured by the agencies of the federal government. In
evaluating this credit risk, the Company periodically evaluates the stability of
the financial institution and brokerage house.

         Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of accounts receivable.
Generally, the Company does not require collateral or other securities to
support its accounts receivable. Three customers represented 38.5% of the
Company's trade receivables at February 29, 2008.

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.

                                       7
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2008

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

Principles of Consolidation - The accompanying Consolidated Financial Statements
include the accounts of the Company and Subsidiary. Inter-company transactions
and balances have been eliminated in consolidation. Condensed consolidating
financial statements as of February 29, 2008 and for the year then ended are:

<TABLE>
<CAPTION>

                                     CONDENSED CONSOLIDATING BALANCE SHEET

                                                                   Epolin
                                                    Epolin         Holding,
                                                     Inc.           Corp.        Eliminations    Consolidated
                                                 ------------    ------------    ------------    ------------
<S>                                              <C>                  <C>             <C>           <C>
Current assets                                   $  3,015,509         311,201              --       3,326,710
Non-current assets                                  1,459,917         625,617        (934,468)      1,151,066
                                                 ------------    ------------    ------------    ------------
        Total                                    $  4,475,426         936,818        (934,468)      4,477,776
                                                 ============    ============    ============    ============

  Total liabilities                              $    564,037          26,785         (24,435)        566,387
                                                 ------------    ------------    ------------    ------------

Stockholders' equity:
  Common stock                                      2,364,693              --              --       2,364,693
  Additional paid-in capital                           76,820              --              --          76,820
  Retained earnings                                 1,820,958         910,033        (910,033)      1,820,958
  Treasury stock                                     (351,082)             --              --        (351,082)
                                                 ------------    ------------    ------------    ------------

  Total stockholders' equity                        3,911,389         910,033        (910,033)      3,911,389
                                                 ------------    ------------    ------------    ------------

        Total                                    $  4,475,426         936,818        (934,468)      4,477,776
                                                 ============    ============    ============    ============
<CAPTION>

                                  CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                                                   Epolin
                                                    Epolin         Holding,
                                                     Inc.           Corp.        Eliminations    Consolidated
                                                 ------------    ------------    ------------    ------------
<S>                                              <C>                  <C>             <C>           <C>
Sales                                            $  3,592,940              --              --       3,592,940
Other revenue- rental income                               --         115,740         (97,740)         18,000
                                                 ------------    ------------    ------------    ------------
        Total                                       3,592,940         115,740         (97,740)      3,610,940
                                                 ------------    ------------    ------------    ------------

Cost of sales                                       1,404,009              --              --       1,404,009
Selling, general and administrative                 1,305,900          26,918         (97,740)      1,235,078
                                                 ------------    ------------    ------------    ------------

        Total                                       2,709,909          26,918         (97,740)      2,639,087
                                                 ------------    ------------    ------------    ------------
Operating income                                      883,031          88,822              --         971,853

Other income                                          140,780          15,449              --         156,229
                                                 ------------    ------------    ------------    ------------

Income before taxes                                 1,023,811         104,271              --       1,128,082

Income taxes                                          394,658           9,797              --         404,455
                                                 ------------    ------------    ------------    ------------

Net income                                       $    629,153          94,474              --         723,627
                                                 ============    ============    ============    ============
</TABLE>

                                        8
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007


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

Accounts receivable - Accounts receivable are stated at the amount management
expects to collect from outstanding balances. Management provides for probable
uncollectible amounts though a charge to earnings and a credit to a valuation
allowance based on its assessment of the current status of individual accounts.
This allowance is an amount estimated by management to be adequate to absorb
possible losses. Balances that are still outstanding after management has used
reasonable collection efforts are written off through a charge to the valuation
allowance and a credit to accounts receivable.

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 methods, based upon the estimated useful lives of
the various assets.

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

                                                                       Years
                                                                      -------
Building and improvements               Straight Line                      39
Laboratory equipment                    Straight Line                  5 -  7
Furniture and office equipment          Straight Line                  5 -  7
Leasehold Improvements                  Straight Line                 10 - 39

         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 $88,336 and $64,704 for
the years ended February 29, 2008 and February 28, 2007, respectively.

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

                                       9
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

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

Use of Estimates - The preparation of the Company's financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates, judgments and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
expenses during the reporting period. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

Revenue Recognition - The Company recognizes revenue consistent with the
provisions of SEC Staff Accounting Bulletin No. 104, "Revenue Recognition",
which sets forth guidelines in the timing of revenue recognition based upon
factors such as passage of title, payments, and customer acceptance. Any amounts
received prior to satisfying our revenue recognition criteria will be recorded
as deferred revenue in the accompanying balance sheet. The Company recognizes
revenue from product sales when there is persuasive evidence that an arrangement
exists, when title has passed, the price is fixed or determinable, and the
Company is reasonably assured of collecting the resulting receivable. The
Company's policy is to replace certain products that are in nonconformity with
customer specifications; however, replacements are made at the discretion of the
Company subject to in house product lab analysis. There are no terms or
conditions set forth within the Company's sales contracts that provide for
product replacements. Replacement costs are expensed as incurred.

Regulations - The Company expended approximately $30,967 through February 29,
2008 and through February 28, 2007, to maintain compliance with certain Federal
and State and City government regulations relative to the production of near
infrared dyes and specialty chemicals.

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

Advertising Costs - Advertising costs, included in operating expenses, are
expensed as incurred. Advertising expenses amounted to $13,307 and $13,855 for
the years ended February 29, 2008 and February 28, 2007, respectively.

                                       10
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

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

Stock-based Compensation - Prior to March 1, 2006 the Company accounted for
stock based compensation under Statement of Financial Accounting Standards No.
123 Accounting for Stock-Based Compensation (FAS 123). As permitted under this
standard, compensation cost was recognized using the intrinsic value method
described in Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25). Effective March 1, 2006, the Company has adopted
Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based
Payment". SFAS 123R revises SFAS No. 123 and supersedes APB 25 to require
companies to measure and recognize in operations the cost of employee services
received in exchange for an award of equity instruments based on the grant-date
fair value. In accordance with the provisions of the Securities and Exchange
Commission Staff Accounting Bulletin No. 107, the Company has adapted the
modified-prospective transition method. Prior periods were not restated to
reflect the impact of adopting the new standard. As a result of the adoption of
FAS 123R, stock-based compensation expense recognized for the period ended
February 29, 2008 includes compensation expense for all share-based payments
granted on or prior to, but not yet vested as of March 1, 2006, based on the
grant date fair value estimated in accordance with the original provisions of
FAS 123, and compensation cost for all share-based payments granted on or
subsequent to March 1, 2006, based on the grant date fair value estimated in
accordance with the provisions of FAS 123R.

         During the years ended February 29, 2008 and February 28, 2007, the
Company recognized stock-based compensation expenses of $14,709 and $22,625,
respectively, related to outstanding stock options according to the provisions
of FAS 123R, using the modified-prospective transition method.

         Prior to the adoption of FAS 123R and for the year ended February 28,
2007, no tax benefits from the exercise of stock options have been recognized.
Any future excess tax benefits derived from the exercise of stock options will
be recorded prospectively and reported as cash flows from financing activities
in accordance with FAS 123R.

         Deferred charges for options granted to non-employees are determined in
accordance with FAS No. 123 and EITF 96-18 "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services" as the fair value of the consideration or the fair
value of the equity instruments issued, whichever is more reliably measured.

         The weighted average Black-Scholes value of options granted under the
stock plans during the years ended February 29, 2008 and February 28, 2007 was
$.18, respectively. The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
weighted average assumptions used for grants

<TABLE>
<CAPTION>

                                                              Years Ended
                                                      ----------------------------
                                                      February 29,    February 28,
                                                          2008            2007
                                                      ------------    ------------
<S>                                                          <C>             <C>
         Weighted average expected life in years                 3               3
         Dividends per share                                  0.04            0.04
         Volatility                                            7.0%            6.0%
         Risk-free interest rate                               4.9%            4.5%
</TABLE>

                                       11
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007


NOTE C - Income Taxes:

1.  Federal and State deferred tax assets include:
                                                     2008            2007
                                                 ------------    ------------
         Temporary differences:
              Accelerated amortization           $      2,696          30,063
              Deferred compensation                   101,405         122,922
              Stock based compensation                 16,054           9,728
                                                 ------------    ------------
                   Total                              120,155         162,713

         Current portion                               25,182          10,288
                                                 ------------    ------------

         Non-current portion                     $     94,973         152,425
                                                 ============    ============

2.  Income tax expense:
                                                     2008            2007
                                                 ------------    ------------
         Current:
              Federal                            $    275,000         259,342
              State                                    86,897          67,618
                                                 ------------    ------------
                   Total current                      361,897         326,960
                                                 ------------    ------------
         Deferred:
              Federal                                  36,602          10,845
              State                                     5,956           2,764
                                                 ------------    ------------

                   Total deferred                      42,558          13,609
                                                 ------------    ------------

                        Total                    $    404,455         340,569
                                                 ============    ============

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

                                                     2008            2007
                                                 ------------    ------------
         Computed at the statutory rate          $    349,705         304,598
         State income taxes (net)                      86,897          67,618
         (Increase) Decrease in deferred
           tax asset                                   42,558          13,609
         General business credits                     (42,993)        (36,040)
         Other reconciling items                      (31,712)         (9,216)
                                                 ------------    ------------

                   Effective tax                 $    404,455         340,569
                                                 ============    ============

                                       12
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE D - Treasury Stock:

Consists of 948,645 shares at a net cost of $351,082, as of February 29, 2008
and February 28, 2007, respectively.

         The Company purchased 30,000 shares during the year ended February 28,
2007.

NOTE E - Economic Dependency:

         A material portion of the Company's business is dependent on certain
domestic customers, the loss of which could have a material effect on
operations. During the years ended February 29, 2008, approximately 37.1% of
sales were to three customers. Two of these customers, located in the Eastern
United States, accounted for 29.3% of sales. During the years ended February 28,
2007, approximately 37.5% of sales were to four customers, two of these
customers, located in the Eastern United States, accounted for 24.5% of sales.

NOTE F - Rental Income Under Sublease:

         The Company entered into an agreement with a non-related party
effective September 1, 2005 for a term ending October 31, 2007. Under the terms
of the agreement, the tenant is to pay a base rent of $18,000 per year. The
tenant is currently in arrears.

NOTE G - Research and Development:

         The Company has developed substantial research and development
capability. The Company's efforts are devoted to (i) developing new products to
satisfy defined market needs, (ii) providing quality technical services to
assure the continued success of its products for its customers' applications,
(iii) providing technology for improvements to its products, processes and
applications, and (iv) providing support to its manufacturing plant for cost
reduction, productivity and quality improvement programs. Expenditures for
Company sponsored product research and product development of $392,992 and
$441,354 were included in cost of sales for the years ended February 29, 2008
and February 28, 2007, respectively. Expenditures for fiscal year 2009 are
projected to remain at approximately the same level as in fiscal 2008.

NOTE H - Employee Benefits:

Simplified Employee Pension Plan - Effective June 1, 1994, the Company provides
a SAR/SEP plan to its employees as a retirement and income tax reduction
facility. Full time employees are eligible to participate immediately. Employees
may make pre-tax and after-tax contributions subject to Internal Revenue Service
limitations. Company contributions range from three to five percent after
completion of one year of service. Employer contributions totaled $54,257 and
$47,677 for the years ended February 29, 2008 and February 28, 2007,
respectively.

                                       13
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE H - Employee Benefits (continued):

Stock Option Plan - The Company previously adopted The 1986 Stock Option Plan.
As of April 1996, under the terms of the Plan, options may no longer be granted.
On December 1, 1995, options to acquire up to 490,000 shares of the Company's
common stock were granted. Options exercised for all prior years totaled
455,000. Options cancelled for all prior years totaled 35,000. There were no
outstanding options as of February 29, 2008.

         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 various
vesting periods as follows: (1) none exercisable prior to the first anniversary
of the date of grant, and (2) certain 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 (3) certain options will become exercisable as
to 50% of the shares underlying the option on each of the second and fourth
anniversaries of the date granted. Options exercised through February 29, 2008
totaled 686,000. Options cancelled or expired for all years totaled 240,000. All
cancelled options are available for future grants.

         A summary of the status of the Company's 1998 stock option plan as of
February 29, 2008, and the changes during the years ended February 29, 2008 is
presented below:

                                                             Weighted-Average
Fixed Options:                                 Shares         Exercise Price
--------------                                --------        -------------
Balance - March 1, 2006                        457,000            $.42
      Cancelled and expired                    (85,000)            .25
      Exercised                                (56,000)            .28
                                              --------

Balance - February 28, 2007                    316,000             .37
                                              --------

Balance - February 29, 2008                    316,000            $.49
                                              ========

Exercisable at February 29, 2008               316,000
                                              ========

                                       14
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007


NOTE H - Employee Benefits (continued):

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

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

         2. Stock-based Employee Compensation - A grant of 100,000 shares of
         restricted common stock one year from the date of the agreement,
         provided the employee is then employed by the Company. In connection
         with this agreement, compensation in the amount of $33,000 was charged
         to selling, general and administrative expenses for the year ended
         February 28, 2007.


Stock Option Plans - The following table summarizes information about fixed
stock options outstanding at February 29, 2008:

<TABLE>
<CAPTION>

               Outstanding Options                            Exercisable Options
---------------------------------------------------      -----------------------------
                     Number        Weighted-Average        Number
  Range of        Outstanding         Remaining         Exercisable     Weighted-Average
Exercise Price     at 2/29/08      Contractual Life      at 2/29/08      Exercise Price
--------------     ----------      ----------------      ----------      --------------
<S>                 <C>                  <C>               <C>                <C>
    $.41            116,000              6.0               116,000            .41
     .51            100,000              1.7               100,000            .51
     .54            200,000              2.3               200,000            .54
</TABLE>

There are 498,000 options attributable to future grants.

NOTE I - Inventories:
                                                 February 29,    February 28,
                                                     2008            2007
                                                 ------------    ------------
         Raw materials and supplies              $    123,286          74,317
         Work in process                               45,379         183,142
         Finished goods                               473,864         394,189
                                                 ------------    ------------
         Total                                   $    642,529         651,648
                                                 ============    ============

                                       15
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE J - Segment Reporting:

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

Sales by geographic area are as follows:

                                                          Years Ended
                                                 ----------------------------
                                                 February 29,    February 28,
                                                     2008            2007
                                                 ------------    ------------
         United States                           $  2,837,852       2,775,135
         Asia                                         481,355         508,235
         Europe                                       273,183         308,278
         Other nations                                    550          18,026
                                                 ------------    ------------
         Total                                   $  3,592,940       3,609,674
                                                 ============    ============


         Two customers, located in the Southeastern United States, accounted for
more than 10% of revenues from continuing operations. These customers accounted
for 29.3% of sales of which 12.0% was near infrared dyes and 17.3% was security
inks.

         Long-lived assets include net plant, property and equipment. The
Company had long-lived assets of $854,724 and $823,079 located in the United
States at February 29, 2008 and February 28, 2007, respectively.

NOTE K - Accrued Expenses:

         Accrued expenses consisted of the following as of February 29, 2008 and
February 28, 2007, respectively:


                                                     2008            2007
                                                 ------------    ------------
Salaries and wages                               $         --           2,234
Employment agreement                                  225,000         210,000
Purchases                                              12,330              --
Professional fees                                      28,000          32,671
Pension contribution                                    5,425              --
                                                 ------------    ------------
Total accrued expenses                           $    270,755         244,905
                                                 ============    ============

                                       16
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE L - Earnings per Share:

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

                                                         Years Ended
                                                 ----------------------------
                                                 February 29,    February 28,
                                                     2008            2007
                                                 ------------    ------------
Basic Earnings Per Common Share:

Net income                                       $    723,627         622,928
                                                 ============    ============
Average common shares
  outstanding                                      11,966,355      11,964,806
                                                 ============    ============
Basic earnings per
  common share                                   $       0.06            0.05
                                                 ============    ============
Diluted Earnings Per Common Share:

Net income                                       $    723,627         622,928
                                                 ============    ============
Average common shares
  outstanding                                      11,966,355      11,964,806

Common shares issuable with respect
to options issued to employees
with a dilutive effect                                 38,618          38,618
                                                 ------------    ------------
Total diluted common shares
  outstanding                                      12,004,973      12,003,424
                                                 ============    ============
Diluted earnings per
  common share                                   $       0.06            0.05
                                                 ============    ============

                                       17
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE M - Commitments and Contingencies:

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

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

Rental expense charged to operations, eliminated in consolidation, amounted to
$97,740 for the years ended February 29, 2008 and February 28, 2007,
respectively.

Future minimum payments for the current option period:

          Fiscal Years Ending February:
          -----------------------------
                    2009                                             $97,740
                    2010                                              97,740
                    2011                                              65,160

Deferred Compensation - On December 29, 1995, the Company entered into a
deferred compensation agreement with James Ivchenko, President, whose additional
annual compensation of $19,645 plus interest is deferred until he reaches age 65
or is terminated. The obligation is funded by the cash value in a life insurance
policy. Commencing on December 2005, annual payments will be made to the officer
in the amount of $32,000 for ten consecutive years.

         On January 1, 1996, the Company entered into a deferred compensation
agreement with Dr. Murray S. Cohen, PhD, Chairman of the Board, 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.

                                       18
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE M - Commitments and Contingencies (continued):

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 - 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. Dr. Cohen is to receive 2.00% on gross annual
sales of no more than $3,000,000, effective with the year ended February 28,
2000, increasing by 0.25% a year during the term of the agreement. In the event
of partial retirement, (50% employment), Dr. Cohen will receive fifty percent
salary and 100% additional compensation. In the event of substantial retirement,
(25% employment), Dr. Cohen will receive 25% percent salary and 100% additional
compensation. In the event of full retirement, Dr. Cohen will receive 50%
additional compensation. In the event of death or disability, while fully
employed during the fiscal year, Dr. Cohen or his estate will receive 100% of
his annual salary plus additional compensation as described above, and 50% of
his annual salary plus additional compensation each subsequent year for the
remainder of the ten-year term. If at the time of death or disability Dr. Cohen
was retired, then other percentage rates are provided for based upon his
retirement status.

         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, 2000, increasing by 0.25% a year
during the term of the agreement. In the event of death or disability during the
fiscal year, Mr. Ivchenko or his estate will receive 100% of his annual salary
plus additional compensation as described above, and 50% of his annual salary
plus additional compensation each subsequent year for the remainder of the
ten-year term.

         Accrued compensation included in selling, general and administrative as
of February 29, 2008 and February 28, 2007 was $225,000 and $210,000,
respectively.


Bonus Agreement - Effective for the year ending February 28, 2006, the company
shall pay Gregory Amato, CEO, bonus compensation in an amount equal to ten
percent of the increase, if any, in the Company's current year consolidated net
income as compared to the consolidated net income for the fiscal year ending
February 28, 2006. The term net income shall mean consolidated net income after
taxes but before any extraordinary items. For subsequent fiscal years, the
employee shall be eligible for cash bonuses in such amounts as determined by the
Compensation Committee.


                                       19
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2008 AND FEBRUARY 28, 2007


NOTE N - Dividends:

         In October 2007 the Company's Board of Directors declared a special
cash dividend of $0.02 per share on all common shares outstanding. The dividend,
in the amount of $239,327 was paid on January 7, 2008 to shareholders of record
at the close of business on December 20, 2007.

         In April 2007, the Company's Board of Directors declared a cash
dividend of $0.02 per share on all common shares outstanding. The dividend, in
the amount of $239,327 was paid on May 14, 2007 to shareholders of record at the
close of business on April 30, 2007.

         In December 2006, the Company's Board of Directors declared a special
cash dividend of $0.02 per share on all common shares outstanding. The dividend,
in the amount of $239,327 was paid on January 3, 2007 to shareholders of record
at the close of business on December 18, 2006.

         In April 2006, the Company's Board of Directors declared a cash
dividend of $0.02 per share on all common shares outstanding. The dividend, in
the amount of $239,327 was paid on May 1, 2006 to shareholders of record at the
close of business on April 20, 2006.

NOTE O - Environmental Matters

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


                                       20