================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

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

                   For the fiscal year ended FEBRUARY 28, 2009

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

                        Commission file number 000-17741


                                  EPOLIN, INC.
             (Exact Name of Registrant as Specified in Its Charter)


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


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


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

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definition of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

   Large accelerated filer   [ ]             Accelerated filer           [ ]
   Non-accelerated filer     [ ]             Smaller reporting company   [X]

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

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant (8,459,310 shares) as of August 31, 2008, the
last business day of the registrant's most recently completed second fiscal
quarter, was approximately $4,700,000. The number of shares outstanding of the
Common Stock (no par value) of the registrant as of the close of business on
April 30, 2009 was 12,066,355.

                    Documents Incorporated by Reference: None

================================================================================
<PAGE>

                                  EPOLIN, INC.

                                TABLE OF CONTENTS

                                     PART I
                                                                            Page

Item 1.         Description of Business                                       3

Item 1A.        Risk Factors                                                  6

Item 1B.        Unresolved Staff Comments                                     8

Item 2.         Properties                                                    8

Item 3.         Legal Proceedings                                             9

Item 4.         Submission of Matters to a Vote of Security Holders           9

                                     PART II

Item 5.         Market for Registrant's Common Equity, Related Stockholder
                Matters and Issuer Purchases of Equity Securities             9


Item 6.         Selected Financial Data                                      11

Item 7.         Management's Discussion and Analysis of Financial
                Condition and Results of Operations                          11

Item 7A.        Quantitative and Qualitative Disclosures About
                Market Risk                                                  16

Item 8.         Financial Statements and Supplementary Data                  16

Item 9.         Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure                          16

Item 9A(T).     Controls and Procedures                                      17

Item 9B.        Other Information                                            17

                                    PART III

Item 10.        Directors, Executive Officers and Corporate Governance       17

Item 11.        Executive Compensation                                       19

Item 12.        Security Ownership of Certain Beneficial Owners
                and Management and Related Stockholder Matters               22

Item 13.        Certain Relationships and Related Transactions,
                and Director Independence                                    23

Item 14.        Principal Accountant Fees and Services                       24

                                     PART IV

Item 15.        Exhibits and Financial Statement Schedules                   24

                Signatures                                                   25


                                       2
<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 in Part I, Item 1A "Risk Factors". The Company does not
intend to update these forward-looking statements.

                                     PART I

Item 1.  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.
Applications for these dyes cover several markets that include laser protection,
welding, sunglasses, optical filters, glazing and imaging and security inks and
tagants.

         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.

         We sell our products to the manufacturers of plastics/resins, credit
cards, electronics, glass, and other basic materials primarily in the United
States, Asia, and Europe.

         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.

         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 Epolight(TM) 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.

         Epolight(TM) dyes are sold as pure crystalline dyes or formulated
mixtures. We also incorporate our dyes into liquid inks and thermoplastics
pellets. We have approximately 275 to 300 product formulations and have created
a more vertically integrated product line over the past three years to address
more applications.

                                       3
<PAGE>

         Our products can be divided into five distinct product groups: dyes,
dye blends, inks and coatings, laminate pellets and other.

         We sell our products into three primary market segments. Any product
that does not fall into any of the three primary markets is characterized as
Custom.

         Eye Protection

         Our eye protection products are used in plastic lenses, eyeglasses,
goggles, windows and shields that protect eyes from high energy ultraviolet
(UV), visible and near infrared radiation. Typical end-users include welders,
military, industrial and medical laser users. The eye protection market is
concentrated with several major and medium-sized customers in the United States,
Asia and Europe.

         We believe our products are important because our dyes protect the eyes
by absorbing the harmful wavelengths of light while simultaneously allowing
visible light transmission. 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 the Company's products for use in
sunglasses.

         Security Ink

         Our inks and coatings are used on credit cards as well as security inks
for documents and packaging. Typical end-users include banks, printers,
publishers and consumer goods companies. The ink and coatings market is
worldwide with several security ink makers in the United States, Europe and
Asia. Our products make transparent ATM cards readable by ATM machines. Our near
infra-red (NIR) dyes are almost invisible and mask important data or otherwise
tag products by code as genuine. Our products are viable tools to thwart
counterfeiting and fraud.

         Light Management

         Our light Management products are used in laser equipment, electronic
displays, night vision systems, solar heat shields, heat and light sensors,
imaging systems, plasma televisions and data storage discs. Typical end-users
include a large variety of industrial, automotive, aerospace, construction and
electronic users. The light Management market includes many diverse market
niches worldwide. Our light Management dyes allow for the filtering and
manipulation of visible light and NIR light for many applications.

Specialty Chemical Products

         We also 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. 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 28, 2009 and February 29, 2008, we
expended approximately $36,000 and $31,000, respectively, for compliance with
environmental laws. Actual costs to be incurred in future periods may vary from

                                       4
<PAGE>

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 28, 2009, no significant
difficulties were encountered in obtaining adequate supplies of raw materials.
We typically purchase materials in large quantities and volumes to provide up to
a two year supply of certain raw materials.

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, (iii) providing technology for improvements to our products,
processes and applications, and (iv) providing support to our manufacturing
plant for cost reduction, productivity and quality improvement programs.

         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 28, 2009 and February 29, 2008, the
amounts spent on research and development activities were approximately $461,000
and $393,000, 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.

                                       5
<PAGE>

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 28, 2009, approximately 31.0% of sales were to three
customers. 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.

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.

Item 1A. 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 28, 2009, approximately 31.0% of sales were to
three customers. 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.

         CONCENTRATION OF CREDIT RISKS. At February 28, 2009, three of our
customers represented 55.3% of our trade receivables. Such accounts receivable
subject us to a significant concentration of risk. There can be no assurance
that such clients will not experience financial difficulties or other problems
which could delay such customers in paying for product on a timely basis or at
all. Any problems with such customers can be expected to have a material adverse
effect on our business.

         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

                                       6
<PAGE>

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.

         THE LOSS OF OUR CHIEF EXECUTIVE OFFICER, PRESIDENT OR CHAIRMAN OF THE
BOARD WOULD DISRUPT OUR BUSINESS. Our success depends in substantial part upon
the services our three principal executive officers. Although our Chairman of
the Board presently works only on a part-time basis, a loss of one or more of
our current officers could severely and negatively impact our operations. In
addition, we do not maintain key-man life insurance on any of our three
principal executive officers and we have no plans to obtain this insurance.

         WE ARE DEPENDENT ON KEY PERSONNEL. Due to the specialized nature of our
business, our success depends in part upon attracting and retaining the services
of qualified managerial and technical personnel. 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.

         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.

         THE CURRENT FINANCIAL CRISES AND DETERIORATING ECONOMIC CONDITIONS MAY
HAVE A MATERIAL ADVERSE IMPACT ON OUR BUSINESS AND FINANCIAL CONDITION THAT WE
CURRENTLY CANNOT PREDICT. The economic conditions in the United States and
throughout the world have been deteriorating. Global financial markets have been
experiencing a period of unprecedented turmoil and upheaval characterized by
extreme volatility and declines in prices of securities, diminished liquidity
and credit availability, inability to access capital markets, the bankruptcy,
failure, collapse or sale of financial institutions and an unprecedented level
of intervention from the United States federal government and other governments.
Unemployment has risen while businesses and consumer confidence have declined
and there are fears of a prolonged recession. Although we cannot predict the
impacts on us of the deteriorating economic conditions, they could materially
adversely affect our business and financial condition.

         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.

                                       7
<PAGE>

         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. 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.

         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-K or for any other reason.

Item 1B. Unresolved Staff Comments.

         We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.

Item 2.  Properties.

         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

                                       8
<PAGE>

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.
Management expects the subtenant to vacate the premises within the relative near
term.

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 Registrant's Common Equity, Related Stockholder Matters and
         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
sales prices per share 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.

Fiscal year ended February 28, 2009:                 High              Low

March 1, 2008 to May 31, 2008                        $0.64             $0.57
June 1, 2008 to Aug. 31, 2008                        $0.65             $0.54
Sept. 1, 2008 to Nov. 30, 2008                       $0.63             $0.27
Dec. 1, 2008 to Feb. 28, 2009                        $0.50             $0.27

Fiscal year ended February 29, 2008:                 High              Low

March 1, 2007 to May 31, 2007                        $0.84             $0.66
June 1, 2007 to Aug. 31, 2007                        $0.75             $0.63
Sept. 1, 2007 to Nov. 30, 2007                       $0.71             $0.61
Dec. 1, 2007 to Feb. 29, 2008                        $0.67             $0.62

Holders

         As of April 30, 2009, there were approximately 270 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".

                                       9
<PAGE>

Dividends

         Subsequent to the end of fiscal 2006, the 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, a regular annual cash
dividend of $0.02 per share was paid in each of May 2006, May 2007 and May 2008.
In addition, since of the adoption of the dividend policy in fiscal 2007, a
special cash dividend of $0.02 per share was paid in each of January 2007 and
January 2008, and a supplemental special cash dividend of $0.04 per share was
paid in August 2008. We did not declare another special cash dividend in January
2009 similar to the special cash dividends we have paid in January of prior
years. In addition, no decision has been made with respect to a regular annual
cash dividend for 2009.

Recent Sales of Unregistered Securities

         We did not issue or sell any equity securities during the fiscal year
ended February 29, 2008 that were not registered under the Securities Act of
1933, as amended (the "Securities Act").

         During the fiscal year ended February 28, 2009, we issued or sold the
following equity securities that were not registered under the Securities Act:

         On September 1, 2008, a total of 100,000 shares of Common Stock were
granted to the Company's four directors. Such shares were issued under the
Epolin, Inc. 2008 Stock Incentive Plan. All of such securities were issued in
reliance upon the exemption from registration pursuant to Section 4(2) of the
Securities Act for "transactions by the issuer not involving any public
offering".

Equity Compensation Plan Information

         2008 Stock Incentive Plan

         On June 18, 2008, our Board of Directors approved and adopted the
Epolin, Inc. 2008 Stock Incentive Plan (the "2008 Plan"), and authorized us to
issue up to 1,500,000 shares of our Common Stock under the 2008 Plan (subject to
adjustment to take account of stock dividends, stock splits, recapitalizations
and similar corporate events). The 2008 Plan was approved by the stockholders on
August 18, 2008. The purpose of the 2008 Plan is to provide officers, other
employees and directors of, and consultants to, us an incentive to (a) enter
into and remain in our service or that of our subsidiaries or to provide
services to us or our subsidiaries, (b) enhance our long term performance and
that of our subsidiaries, and (c) acquire a proprietary interest in us. Under
the 2008 Plan, we will have the right to issue stock options, stock appreciation
rights, restricted stock, restricted stock units, performance shares or
performance units, and stock or stock-based awards. The 2008 Plan provides that
on September 1 of each year, each person who serves as a Director on such date
shall automatically receive a stock award of 25,000 shares of Common Stock. As
of February 28, 2009, 100,000 shares of Common Stock have been granted under the
2008 Plans. No options or any other awards have been granted to date under the
2008 Plan.

         Other Stock Option Plans

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

         In December 1998, the Company adopted the 1998 Stock Option Plan (the
"1998 Plan") for employees, officers, consultants or directors of the Company to
purchase up to 750,000 shares of Common Stock of the Company (the "1998 Plan
Option Pool"). In September 2001, the Board of Directors increased the size of
the 1998 Plan Option Pool to 1,500,000 shares. Options granted under the 1998
Plan shall be non-statutory stock options which do not meet the requirements of
Section 422 of the Code. Under the terms of the 1998 Plan, participants may
receive options to purchase Common Stock in such amounts and for such prices as

                                       10
<PAGE>

may be established by the Board of Directors or a committee appointed by the
Board to administer the 1998 Plan. Options exercised through February 28, 2009
total 686,000. Options cancelled or expired for all years totaled 240,000, which
under the 1998 Plan were available for future grant, and as of February 28,
2009, there are options outstanding to acquire 316,000 shares. With the approval
of the 2008 Plan by our stockholders, the 1998 Plan terminated and therefore we
are no longer able to grant options under it. However, options that have already
been granted under the 1998 Plan will continue to be outstanding.

         Information regarding equity compensations plans, as of February 28,
2009, is set forth in the table below:
<TABLE>
<CAPTION>

                                                                                 Number of securities
                            Number of securities                                 remaining available for
                            to be issued upon         Weighted-average           future issuance under
                            exercise of               Exercise price of          equity compensation plans
                            outstanding options,      Outstanding options,       (excluding securities reflected
Plan category               warrants and rights (a)   Warrants and rights (b)    in column (a)) (c)
--------------------------- -----------------------   -----------------------    -------------------------------
<S>                            <C>                        <C>                          <C>
Equity compensation
plans approved by                       -0-                        -0-                          -0-
security holders

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

Total                               416,000                      $0.50                      498,000
</TABLE>

         The foregoing equity compensation plan information relates to the stock
options granted under the 1998 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 years ended February 29, 2008 and February 29,
2009. 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.  Selected Financial Data.

         We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

         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") 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.
Applications for these dyes cover several markets that include laser protection,
welding, sunglasses, optical filters, glazing and imaging and security inks and
tagants. 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.

                                       11
<PAGE>

         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. During the year ended February 28, 2009, approximately 31.0% of
sales were to three customers. 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. The loss of
one or more key customers could have a material adverse effect on the Company.

Results of Operations

         The following tables set forth operations data for the year ended
February 28, 2009 and year ended February 28, 2008.
<TABLE>
<CAPTION>

                                                     2009            2008         % change
                                                 ------------    ------------     ----------
<S>                                              <C>             <C>                    <C>
Sales                                            $  3,091,539    $  3,592,940          -14.0%

Gross profit                                        1,647,340       2,188,931          -24.7%

Gross profit percentage                                  53.3%           60.9%          -7.6%

Selling, general & administrative                   1,251,521       1,235,078            1.3%
                                                 ------------    ------------

Operating income                                      395,819         953,853          -58.5%
Other Income                                           70,861         174,229          -59.3%
                                                 ------------    ------------

Income before taxes                                   466,680       1,128,082          -58.6%

Income taxes                                          139,111         404,455          -65.6%
                                                 ------------    ------------

Net income (after taxes)                         $    327,569    $    723,627          -54.7%
                                                 ============    ============
</TABLE>

Sales

         For the year ended February 28, 2009, sales were $3,092,000 as compared
to $3,593,000 for the year ended February 29, 2008, a decrease of $501,000 or
14.0%.

         Such decreases in sales is primarily due to our ink and coating sales
which have deteriorated significantly in recent periods compared to our other
markets in which sales, although declining to a minor extent, have remained
relatively stagnant. For the year ended February 28, 2009, sales in the ink and
coating market decreased to $821,000 from $1,308,000 for the year ended February
29, 2008, a decrease of $487,000. 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.

         Sales in the eye protection market, which represents our oldest and
traditional market, were $1,405,000 in fiscal 2009 compared to $1,409,000 in
fiscal 2008, a decrease of $4,000. Sales in the light management market were
$697,000 in fiscal 2009 compared to $701,000 in fiscal 2008, a decrease of
$4,000, while sales of custom products were $161,000 in fiscal 2009 compared to
$167,000 in fiscal 2008, a decrease of $6,000.

         Sales overseas increased in Asia and Europe for the year ended February
28, 2009 compared to the prior year, while sales decreased in the United States
for the year ended February 28, 2009 compared to the year ended February 29,
2008. For fiscal 2009, sales in Asia increased to $578,000 from $481,000 for
fiscal 2008, while in Europe, sales increased to $398,000 from $273,000 for the
prior year. In the United States, sales decreased to $2,115,000 in the year
ended February 28, 2009 from $2,838,000 in the year ended February 29, 2008.

                                       12
<PAGE>

Gross Profit

         Gross profit, defined as sales less cost of sales, was $1,647,000 or
53.3% of sales for the year ended February 28, 2009 compared to $2,189,000 or
60.9% of sales for the year ended February 29, 2008. In terms of absolute
dollars, gross profit decreased $542,000 in fiscal 2009 compared to the prior
year.

         Cost of sales was $1,444,000 for the year ended February 28, 2009 which
represented 46.7% of sales compared to $1,404,000 for the year ended February
29, 2008 which represented 39.1% of sales. Total cost of materials decreased
$2000 in in fiscal 2009 compared to fiscal 2008, while total factory overhead
increased $42,000 in fiscal 2009 compared to the prior year, primarily due to
increases in research and development salaries and supplies and insurance
expense, offset by decreases in applied factory overhead.

Selling, General and Administrative Expenses

         Selling, general and administrative expenses increased to $1,252,000 or
40.5% of sales for the year ended February 28, 2009 compared to $1,235,000 or
34.4% of sales for the year ended February 29, 2008, an increase of $17,000.
Such increase in absolute dollars was primarily due to increases in professional
fees, directors fees (non-cash compensation resulting from the grant of shares),
travel, office supplies, miscellaneous expenses and a reduction in certain
allocated expenses to costs of sales, offset by a decrease in officers' salaries
(primarily from the Chairman of the Board's decision to become a part-time
employee with a corresponding reduction in his base salary), and a decrease in
directors' and officers' insurance and employee benefits. In addition, we
incurred a placement fee of $12,000 in fiscal 2008 for which there was no
comparable item in fiscal 2009.

Operating Income

         Operating income, in terms of absolute dollars, decreased to $396,000
in fiscal 2009 from $954,000 for fiscal 2008, a decrease of $558,000. Such
change in fiscal 2009 was primarily due to the decrease in sales for the year
compared to fiscal 2008. As a percentage of sales, operating income was 12.8% of
sales for fiscal 2009 compared to 26.5% of sales for fiscal 2008.

Other Income

         Total other income for the year ended February 28, 2009 was $71,000 as
compared to $174,000 for the year ended February 29, 2008. During fiscal 2008 we
received an insurance reimbursement of $61,000 for flood damage. There was not a
comparable item in fiscal 2009. Also, our interest income decreased to $53,000
in fiscal 2009 from $89,000 in fiscal 2008.

Net Income

         During fiscal 2009, we reported income before taxes of $467,000 as
compared to income before taxes of $1,128,000 for fiscal 2008. Income taxes were
$139,000 for fiscal 2009 compared to $404,000 for the year ended February 29,
2008. Changes in income taxes are generally attributed to changes from period to
period in sales and expenses. Net income after taxes was $328,000 or $0.03 per
share for the year ended February 28, 2009 as compared to $724,000 or $0.06 per
share for the year ended February 29, 2008.

         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. This has
continued into fiscal 2009 with sales decreasing by $501,000 compared to fiscal
2008. Unlike fiscal 2008 and 2007, however, in which net income did improve in
each year compared to the prior year, net income in fiscal 2009 decreased by
$396,000 compared to fiscal 2008.

Operations Outlook

         Following a period of readjustment in our business priorities, we were
able to achieved $3,701,000 in sales for fiscal 2006 which was $821,000 or 28.5%
greater than the prior fiscal year. In fiscal 2007, however, 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 fiscal 2007. This has continued
into fiscal 2009 in which sales decreased at a much greater rate to $3,092,000
or 14.0% compared to fiscal 2008. 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 from 2005 to 2007. While this market remains a

                                       13
<PAGE>

source of business for us, we may never be able to achieve the same level of
sales in the future which we achieved from 2005 to 2007 in the security inks
market. Nevertheless, we are confident that with our core group of products, we
will be able to maintain sales in our principal markets, such as the eye
protection market and the light management market, while always seeking new
areas for the use of our dyes.

         As a result of recent expressions of interest received, management
began in fiscal 2009 to explore strategic alternatives for the Company. In
February 2009, the Company retained Millburn Capital Group as its financial
advisor in connection with the Board's decision to explore strategic
alternatives for the Company, including the potential sale of the Company. The
Company recently announced that it has entered into a non-binding letter of
intent whereby all of the outstanding capital stock of the Company will be
acquired by a strategic purchaser. There can be no assurance that any definitive
agreement will be entered into, that any proposed transaction will be approved
by the shareholders of the Company or that a transaction will be completed as a
result of the execution of the letter of intent. The Company does not currently
intend to publicly disclose additional information about the status of this
process but will publicly report all required information on a timely basis.

Liquidity and Capital Resources

         Our primary source of funds is cash flow from operations in the normal
course of selling products. On February 28, 2009, we had working capital of
$2,561,000, a debt to equity ratio of 0.15 to 1, and stockholders' equity of
$3,549,000 compared to working capital of $3,007,000, a debt to equity ratio of
0.15 to 1, and stockholders' equity of $3,911,000 on February 29, 2008. On
February 28, 2009, we had $1,545,000 in cash and cash equivalents, total assets
of $4,096,000 and total liabilities of $547,000, compared to $1,980,000 in cash
and cash equivalents, total assets of $4,478,000 and total liabilities of
$566,000 on February 29, 2008.

         Net cash provided by operating activities for the year ended February
28, 2009 was $445,000 which was primarily the result of net income of $328,000,
depreciation of $105,000, plus a decrease in accounts receivable of $247,000 and
an increase in accounts payable of $29,000 and accrued expenses of $14,000,
offset by increases in inventories of $25,000, prepaid taxes of $228,000, and
decreases in taxes payable of $37,000. 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 used by investing activities for year ended February 28, 2009
was $162,000 due to property and equipment purchases of $150,000 and increase in
cash value of a life insurance policy of $12,000, while 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. For the year ended February 28, 2009, net cash used
by financing activities was $718,000 due to cash dividends having been paid
totaling $718,000 in fiscal 2009, and was $479,000 in fiscal 2008 resulting from
cash dividends having been paid totaling $479,000 during that fiscal year.

         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 2010 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.

                                       14
<PAGE>

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

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

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

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

         Stock-based Compensation - Effective March 1, 2006, we have adopted
Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based
Payment". SFAS 123R requires 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, we have adapted the modified-prospective transition method. Prior
periods were not restated to reflect the impact of adopting the new standard. We
determine the fair value of stock-based compensation using the Black-Scholes
option-pricing model, which requires us to make assumptions regarding future
dividends, expected volatility of our stock, and the expected lives of the
options. Under SFAS 123R we also make assumptions regarding the number of
options and the number of shares of restricted stock and performance shares that
will ultimately vest. As a result of the adoption of FAS 123R, stock-based
compensation expense recognized 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.

Recently Adopted Accounting Standards

         On March 1, 2008, we adopted Statement of Financial Accounting Standard
("SFAS") No. 157, "Fair Value Measurements" ("FAS 157") for financial assets and
liabilities, which clarifies the meaning of fair value, establishes a framework
for measuring fair value and expands disclosures about fair value measurements.
Fair value is defined under FAS 157 as the exchange price that would be received
for an asset or paid to transfer a liability in the principal or most
advantageous market for the assets or liabilities in an orderly transaction
between market participants on the measurement date. Subsequent changes in fair
value of these financial assets and liabilities are recognized in earnings or
other comprehensive income when they occur. The effective date of the provisions
of FAS 157 for non-financial assets and liabilities, except for items recognized
at fair value on a recurring basis, was deferred by Financial Accounting
Standards Board ("FASB") Staff Position FAS 157-2 ("FSP FAS 157-2") and are
effective for the fiscal year beginning March 1, 2009. We are currently
evaluating the impact of the provisions for non-financial assets and
liabilities. The adoption of FAS 157 for financial assets and liabilities did
not have an impact on our consolidated financial position or results of
operations.

         Also, effective March 1, 2008, we adopted SFAS No. 159 "The Fair Value
Option for Financial Assets and Financial Liabilities" ("FAS 159") which allows
an entity the irrevocable option to elect fair value for the initial and
subsequent measurement for certain financial assets and liabilities on a
contract-by-contract basis. As of February 28, 2009, we have not elected the
fair value option for any additional financial assets and liabilities beyond
those already prescribed by accounting principles generally accepted in the
United States.

                                       15
<PAGE>

         In October 2008, the FASB issued Staff Position No. FAS 157-3,
"Determining the Fair Value of a Financial Asset in a Market That Is Not Active
("FSP FAS 157-3")." FSP FAS 157-3 clarifies the application of FAS 157 in a
market that is not active and defines additional key criteria in determining the
fair value of a financial asset when the market for that financial asset is not
active. FSP FAS 157-3 applies to financial assets within the scope of accounting
pronouncements that require or permit fair value measurements in accordance with
FAS 157. FSP FAS 157-3 was effective upon issuance and the application of FSP
FAS 157-3 did not have a material impact on our consolidated financial
statements.

Other Information

         Subsequent to the end of fiscal 2006, the 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, a regular annual cash
dividend of $0.02 per share was paid in each of May 2006, May 2007 and May 2008.
In addition, since of the adoption of the dividend policy in fiscal 2007, a
special cash dividend of $0.02 per share was paid in each of January 2007 and
January 2008, and a supplemental special cash dividend of $0.04 per share was
paid in August 2008. We did not declare another special cash dividend in January
2009 similar to the special cash dividends we have paid in January of prior
years. Primarily due the Company's recent decision to seek strategic
alternatives, the Board has determined to postpone any action regarding the
declaration of the regular annual cash dividend for 2009 pending the outcome of
this process.

         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 years ended February 29, 2008 and February 29,
2009. 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.

         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.

         Morris Dunkel, who was a director of the Company since 1984, died on
August 22, 2008. Such vacancy on the Board has not been filled.

Off-Balance Sheet Arrangements

         We do not have any off balance sheet arrangements that are reasonably
likely to have a current or future effect on our financial condition, revenues,
and results of operations, liquidity or capital expenditures.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

         We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.

Item 8.  Financial Statements and Supplementary Data.

         See the Financial Statements annexed to this report.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

         None.

                                       16
<PAGE>

Item 9A(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 28, 2009.

         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 9B. Other Information.

         Not applicable.

                                    PART III

Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate
         Governance; Compliance with Section 16(a) of the Exchange Act.

         Set forth below are our present directors and executive officers. Note
         that there are no other persons who have been nominated or chosen to
         become directors nor are there any other persons who have been chosen
         to become executive officers. There are no arrangements or
         understandings between any of the directors, officers and other persons
         pursuant to which such person was selected as a director or an officer.
         Directors are elected to serve until the next annual meeting of
         stockholders and until their successors have been elected and have
         qualified. Officers serve at the discretion of the Board of Directors.

                                       17
<PAGE>



                                     Present Position            Has Served as
Name                       Age       and Offices                 Director Since
--------------------      ----       -----------------------     --------------
Murray S. Cohen            84        Chairman of the                 1984
                                     Board, Chief Scientist,
                                     Secretary and Director

James Ivchenko             69        President and Director          1993

Greg Amato                 52        Chief Executive Officer           --

James R. Torpey, Jr.       59        Director                        2001

Herve A. Meillat           53        Director                        2005

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

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

         MURRAY S. COHEN has served as Director and Chairman of the Board of the
Company since June 1984 and Secretary since March 2001. From June 1984 to
January 2006, Dr. Cohen was Chief Executive Officer, and from June 1984 to
August 1994, he was also President. Dr. Cohen also currently serves as Chief
Scientist. From January 1978 through May 1983, Dr. Cohen was the Director of
Research and Development for Apollo Technologies Inc., a company engaged in the
development of pollution control procedures and devices. Dr. Cohen was employed
as a Vice President and Technical Director of Borg-Warner Chemicals from 1973
through January 1978, where his responsibilities included the organization,
project selection and project director of a 76 person technical staff which
developed materials for a variety of plastic products. He received a Bachelor of
Science Degree from the University of Missouri in 1949 and a Ph.D. in Organic
Chemistry from the same institution in 1953.

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

         GREG AMATO has been employed by the Company since November 2004 and has
been Chief Executive Officer since January 2006. From, January 2005 to January
2006, he was Vice President of Sales and Marketing. From 1993 to 2004, Mr. Amato
was with Elementis, PLC and certain of its subsidiaries, divisions and
predecessors, which company is a specialty chemical manufacturer. During such
period, Mr. Amato was Vice President, Specialty Markets of Elementis
Specialties, Inc., located in Hightstown, New Jersey from 2000 to 2004;
President and CEO of Elementis Performance Polymers, located of Belleville, New
Jersey from 1998 to 2000; and from 1993 to 1998, Sales Manager of Rheox, which
was acquired by Elementis in 1998. Mr. Amato received a Bachelor of Chemical
Engineering from Georgia Institute of Technology in 1978.

         JAMES R. TORPEY, JR. has served as Director of the Company since July
2001. Mr. Torpey is Director of Market Development for SunPower Corporation, a
major world wide supplier of solar electric equipment and systems. From 2002 to
2007, he was President of Madison Energy Consultants, a consulting firm in the
energy industry. From 1995 to 2002, he was Director of Technology Initiatives at
First Energy/GPU, Chairman of the Solar Electric Power Association, and
President and member of the Board of Directors of GPU Solar, Inc. He was a
member of the U.S. Department of Energy Solar Industry Advisory Board from 2001
to 2005. Mr. Torpey received his Masters of Business Administration from Rutgers
University in 1991.

         HERVE A. MEILLAT has served as Director of the Company since July 2005.
Since September 2006, Mr. Meillat has been the sole owner and CEO of Christian
Dalloz Sunoptics ("CDS"), a company located in France which develops,
manufactures and sells worldwide non-prescription ocular lenses and shields for
premium sunglasses in all market segments including luxury, fashion and sports
eyewear. In February 2009, CDS filed for bankruptcy protection in France. Mr.
Meillat is a former Senior Vice President of the Bacou-Dalloz Group, a world
leader in the design, manufacturing and sales of personal protection equipment.
While with Bacou-Dalloz, he was Senior Vice President of its eye and face
business unit from 2001 to 2004, the President of Dalloz Safety Inc. from 1996
to 2001 and Chief Operating Officer of Christian Dalloz in France from 1989 to
1995.

                                       18
<PAGE>

         To the knowledge of the Company, and except as described above, none of
the officers or directors has been personally involved in any bankruptcy or
insolvency proceedings. To the knowledge of the Company, none of the directors
or officers have been convicted in any criminal proceedings (excluding traffic
violations and other minor offenses) or are the subject of a criminal proceeding
which is presently pending, nor have such persons been the subject of any order,
judgment, or decree of any court of competent jurisdiction, permanently or
temporarily enjoining them from acting as an investment advisor, underwriter,
broker or dealer in securities, or as an affiliated person, director or
insurance company, or from engaging in or continuing in any conduct or practice
in connection with any such activity or in connection with the purchase or sale
of any security, nor were any of such persons the subject of a federal or state
authority barring or suspending, for more than 60 days, the right of such person
to be engaged in any such activity, which order has not been reversed or
suspended.

Audit Committee Financial Expert

         We do not have an audit committee financial expert, as such term is
defined in Item 407(d)(5) of Regulation S-K, serving on our audit committee
because we have no audit committee and are not required to have an audit
committee because we are not a listed security.

Compliance with Section 16(a) of the Exchange Act

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's Common Stock, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes of ownership of
Common Stock of the Company. Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.

         Based solely on the Company's review of such forms received by it, or
written representations from certain of such persons, the Company believes that,
with respect to the fiscal year ended February 28, 2009, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.

Code of Ethics

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

Item 11. Executive Compensation.

         The following summary compensation tables set forth information
concerning the annual and long-term compensation for services in all capacities
to the Company for the fiscal years ended February 28, 2009 and February 29,
2008 of those persons who were, at February 28, 2009, (i) the chief executive
officer and (ii) the other most highly compensated executive officers of the
Company, whose total compensation was in excess of $100,000 (the named executive
officers):

                                       19
<PAGE>
<TABLE>
<CAPTION>

                           Summary Compensation Table
-------------------- ------ ----------- ------ ----------- ---------  --------------- ------------- -------------- --------
Name and Principal   Year   Salary      Bonus  Stock       Option     Non-Equity      Nonqualified  All Other      Total
Position                    ($)         ($)    Awards      Awards     Incentive       Deferred      Compensation
                                               ($)         ($)        Plan            Compensation  ($)
                                                                      Compensation    Earnings ($)
                                                                      ($)
-------------------- ------ ----------- ------ ----------- ---------  --------------- ------------- -------------- --------
<S>                  <C>    <C>         <C>    <C>         <C>        <C>             <C>           <C>            <C>
Greg Amato           2009   $165,000    $0     $0          $0         $0              $0            $0             $165,000
Chief Executive      2008   $165,000    $0     $0          $0         $0              $0            $5,997(1)      $170,997
Officer

Murray S. Cohen      2009   $50,826     $0     $7,000(2)   $0         $120,000(3)     $0            $0             $177,826
Chairman of the      2008   $80,146     $0     $0          $3,160(2)  $112,500(3)     $0            $0             $195,806
Board

James Ivchenko       2009   $195,478    $0     $7,000(2)   $0         $105,000        $32,000(5)    $0             $339,478
President            2008   $195,478    $0     $0          $3,160(2)  $97,500(4)      $64,000(5)    $4,266(1)      $364,404
</TABLE>

(1)  Represents a health insurance reimbursement.

(2)  Represents the dollar amount recognized for financial statement reporting
     purposes with respect to the fiscal year in accordance with SFAS 123R.

(3)  Dr. Cohen received additional compensation of $120,000 and $112,500 in
     fiscal 2009 and 2008, respectively, based upon the Company's sales for
     fiscal 2008 and 2007, as determined under his employment contract. Does not
     include additional compensation due to Dr. Cohen based upon the Company's
     sales for fiscal 2009 as determined under his employment contract to be
     paid in fiscal 2010 in the amount of $127,500.

(4)  Mr. Ivchenko received additional compensation of $105,000 and $97,500 in
     fiscal 2009 and 2008, respectively, based upon the Company's sales for
     fiscal 2008 and 2007, as determined under his employment contract. Does not
     include additional compensation due to Mr. Ivchenko based upon the
     Company's sales for fiscal 2009 as determined under his employment contract
     to be paid in fiscal 2010 in the amount of $112,500.

(5)  Represents the amount paid to Mr. Ivchenko in fiscal 2009 and 2008 pursuant
     to his deferred compensation agreement. See "Deferred
     Compensation/Employment Contracts and Change in Control Arrangements"
     below.

Equity Awards

         The following table provides certain information concerning equity
awards held by the named executive officers as of February 29, 2008.
<TABLE>
<CAPTION>

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

                                      Option Awards                                                      Stock Awards
---------------------------------------------------------------------------------------------------------------------------------
Name                        No. of         Number of         Option           Option         Number of     Equity Incentive Plan
                          Securities       Securities       Exercise        Expiration       Shares or       Awards: Number of
                          Underlying       Underlying       Price ($)          Date        Units of Stock  Unearned Shares, Units
                          Unexercised     Unexercised                                      That Have Not    Or Other Rights That
                          Options (#)      Options (#)                                        Vested (#)      Have Not Vested(#)
                          Exercisable     Unexercisable
----------------------- ---------------- ---------------  --------------   --------------  --------------- ----------------------
<S>                         <C>                <C>            <C>            <C>  <C>            <C>                 <C>
Greg Amato                  100,000           -0-             $0.51          11/1/2009          -0-                 -0-

Murray S. Cohen              20,000           -0-             $0.41           2/9/2014          -0-                 -0-
                             50,000           -0-             $0.54          6/20/2010          -0-                 -0-

James Ivchenko               20,000           -0-             $0.41           2/9/2014          -0-                 -0-
                             50,000           -0-             $0.54          6/20/2010          -0-                 -0-
</TABLE>

Compensation of Directors

         Since fiscal 2002, the Company has paid directors $750 for each board
meeting attended. Commencing in fiscal 2007, only non-employee directors are
paid such amount. In addition, commencing in fiscal 2007, non-employee directors
are also paid $750 for each committee meeting attended. Directors have always
been and will continue to be reimbursed for reasonable expenses incurred on
behalf of the Company.

         In addition to the foregoing, pursuant to Epolin, Inc. 2008 Stock
Incentive Plan (the "2008 Plan"), adopted by the Board of Directors on June 18,
2008 and approved by the stockholders on August 18, 2008, on September 1 of each
year, commencing September 1, 2008, each person who serves as a director on such
date shall automatically receive a stock award of 25,000 shares of Common Stock.
On September 1, 2008, a total of 100,000 shares of Common Stock were granted to
the Company's four directors.

                                       20
<PAGE>

         The following table provides certain summary information concerning the
compensation paid to non-employee directors during fiscal 2009. All compensation
paid to Dr. Cohen and Mr. Ivchenko is set forth in the table under "Executive
Compensation".
<TABLE>
<CAPTION>

                              Director Compensation

----------------------------------------------------------------------------------------------------------
Name                        Fees               Stock            Option          All Other       Total ($)
                          Earned or          Awards (S)      Awards ($)(1)     Compensation
                           Paid in                                                 ($)
                          Cash ($)
--------------------- ------------------ ----------------- ---------------- ----------------- ------------
<S>                        <C>               <C>                   <C>              <C>          <C>
James R. Torpey, Jr.       $3,750            $7,000(1)            -0-              -0-           $10,750

Herve A. Meillat           $3,750            $7,000(1)            -0-              -0-           $10,750

Morris Dunkel(2)           $1,500               -0-               -0-              -0-           $ 1,500
</TABLE>

(1)  Represents the dollar amount recognized in fiscal 2009 for financial
     reporting purposes of stock awarded computed in accordance with Financial
     Accounting Standards 123R.

(2)  Morris Dunkel, who was a director since 1984, died in August 2008.

Deferred Compensation/Employment Contracts and Change in Control Arrangements

         Effective as of November 1, 2004, the Company entered into an
employment agreement with Greg Amato. Such agreement provided that Mr. Amato
would be employed "at-will" and that such employment can be terminated by either
party at any time without reason or cause provided at least six months prior
written notice is given. The employment agreement also provides that Mr. Amato
would receive bonus compensation for 2004 based upon a formula and would be
entitled to receive, following the fiscal year ending February 28, 2006, bonus
compensation equal to 10% of the increase in the Company's net income for the
fiscal year ending February 28, 2006 compared to February 28, 2005. For
subsequent fiscal years, Mr. Amato shall be entitled to receive annual cash
bonuses as the Compensation Committee shall determine with performance
objectives determined prior to the start of the applicable year. Pursuant to the
employment agreement, the Company also agreed to grant Mr. Amato an option to
purchase 100,000 shares of Common Stock of the Company at an exercise price
equal to the fair market value of the Company's Common Stock on November 1, 2004
which option shall be exercisable only after the completion of Mr. Amato's
second year of employment under his employment agreement. In addition, pursuant
to the employment agreement, the Company agreed to grant to Mr. Amato, one year
from the date of his employment agreement provided he is then employed by the
Company, 100,000 shares of restricted Common Stock of the Company.

         Pursuant to a deferred compensation agreement, as amended, entered into
with James Ivchenko, President of the Company, the Company has agreed to pay Mr.
Ivchenko $32,000 per year for ten consecutive years commencing the first day of
the month following Mr. Ivchenko reaching the age of 65. To date, five payments
of $32,000 each have been paid to Mr. Ivchenko.

         Effective as of March 1, 1999, the Company entered into a ten year
employment agreement with Mr. Ivchenko. Pursuant thereto, Mr. Ivchenko shall be
paid an annual salary of not less than the greater of his annual base salary in
effect immediately prior to the effective date of the agreement or any
subsequently established annual base salary. In addition thereto, Mr. Ivchenko
shall receive as additional compensation a certain percentage (as set forth
below) of the Company's annual gross sales up to but not exceeding annual gross
sales of $3 million. Such percentage starts at 1.50% for the fiscal year ended
February 29, 2000 and increases by 0.25% per year during the term of the
agreement. In the event of death or disability, the agreement provides that Mr.
Ivchenko or his estate will receive 100% of his annual salary and additional
compensation as described above for the fiscal year during which he died or
became disabled, and 50% of his annual salary and annual additional compensation
which he would have received (if not for his death or disability) for the
remainder of the ten year term. Such agreement expired as of February 28, 2009.

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

         Effective as of March 1, 1999, the Company also entered into a ten year
employment agreement with Murray S. Cohen, Chairman of the Board of the Company.
Pursuant thereto, Dr. Cohen shall be paid an annual salary of not less than the

                                       21
<PAGE>

greater of his annual base salary in effect immediately prior to the effective
date of the agreement or any subsequently established annual base salary. In
addition thereto, Dr. Cohen shall receive as additional compensation a certain
percentage (as set forth below) of the Company's annual gross sales up to but
not exceeding annual gross sales of $3 million. Such percentage starts at 2.00%
for the fiscal year ended February 29, 2000 and increases by 0.25% per year
during the term of the agreement. Pursuant to an amendment to the employment
agreement entered into on March 30, 2006, Dr. Cohen shall have the option to
partially retire pursuant to which Dr. Cohen will devote approximately 50% of
his time to the Company in which event he will be paid 50% of his annual base
salary and 100% of the additional compensation for the remainder of the term. He
shall also have the option to either (i) substantially retire pursuant to which
Dr. Cohen will devote approximately 25% of his time to the Company in which
event he will be paid 25% of his annual base salary and 100% of the additional
compensation for the remainder of the term, or (ii) fully retire in which event
he will be paid no annual base salary and 50% of the additional compensation for
the remainder of the term. In the event of death or disability, the amendment
provides that Dr. Cohen or his estate will receive 100% of his annual salary and
additional compensation as described above for the fiscal year during which he
died or became disabled, and 50% of his annual salary and annual additional
compensation which he would have received (if not for his death or disability)
for the remainder of the ten year term, provided at the time of death or
disability Dr. Cohen was a full-time employee. If at the time of death or
disability Dr. Cohen was fully, partially or substantially retired, then other
percentage rates are provided in the amendment for the payment of the annual
salary and annual additional compensation to Dr. Cohen or his estate for the
balance of the term. Such agreement expired as of February 28, 2009.

         The Company had previously entered into a deferred compensation
agreement in June 1998 with Dr. Cohen which provided for the payment of certain
funds to Dr. Cohen for a period of ten years beginning two weeks after the date
of his retirement. Such agreement was terminated in connection with the
execution of the employment agreement with Dr. Cohen. In addition to the
foregoing, Dr. Cohen will be entitled to receive $79,041 upon his retirement in
connection with a deferred compensation agreement entered into in January 1996
which was terminated in June 1998. Such amount will be paid to Dr. Cohen upon
retirement either in equal consecutive monthly payments for a period not
exceeding 60 months or a single payment which will be at the discretion of the
Company.

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

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

Indebtedness of Management

         No member of management was indebted to the Company during its last
fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

         The following table sets forth, as of April 30, 2009, certain
information with regard to the record and beneficial ownership of the Company's
Common Stock by (i) each stockholder owning of record or beneficially 5% or more
of the Company's Common Stock, (ii) each director of the Company, (iii) the
Company's Chief Executive Officer and other executive officers, if any, of the
Company whose total compensation was in excess of $100,000 (the "named executive
officers"), and (iv) all officers and directors of the Company as a group:

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

Murray S. Cohen(1)*                          1,965,958                  16.2%
James Ivchenko(2)*                           1,589,587                  13.1%
James R. Torpey, Jr.((3))*                     122,500                   1.0%
Herve A. Meillat*                               29,000                    **
Greg Amato((4))*                               200,000                   1.6%
Claire Bluestein*                              970,155                   8.0%
Santa Monica Partners, L.P.((5))               825,900                  6.89%
Sandra Lifschitz((6))                          605,000                   5.0%

All Executive Officers and
Directors as a Group (5 persons)             3,907,045                  31.6%

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

**   Less than 1%.

                                       22
<PAGE>

(1)  Includes 1,870,958 shares held by Dr. Cohen and 25,000 shares held by the
     wife of Dr. Cohen. Also, includes 70,000 shares which Dr. Cohen has the
     right to acquire within 60 days pursuant to the exercise of options granted
     under the 1998 Plan.

(2)  Includes 1,055,000 shares held by Mr. Ivchenko and 464,587 held by Mr.
     Ivchenko and his wife, as joint tenants. Also, includes 70,000 shares which
     Mr. Ivchenko has the right to acquire within 60 days pursuant to the
     exercise of options granted under the 1998 Plan.

(3)  Includes 60,000 shares which Mr. Torpey has the right to acquire within 60
     days pursuant to the exercise of options granted under the 1998 Plan.

(4)  Includes 100,000 shares which Mr. Amato has the right to acquire within 60
     days pursuant to the exercise of options granted to him.

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

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

The Stockholders Agreement

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

Item 13. Certain Relationships and Related Transactions, and Director
         Independence.

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

         Since January 1, 2009, there has not been, nor is there currently
proposed, any transaction or series of similar transactions to which we were or
will be a party: (i) in which the amount involved exceeds the lesser of $120,000
or one percent of the average of our total assets at year-end for the last three
completed fiscal years; and (ii) in which any director, executive officer,
shareholder who beneficially owns 5% or more of our common stock or any member
of their immediate family had or will have a direct or indirect material
interest.

Director Independence

         We have determined that two of our four directors are independent
directors. Messrs. Torpey and Meillat are our independent directors. We have
determined their independence using the definition of independence set forth in
Nasdaq Marketplace Rule 4200(a)(15).

                                       23
<PAGE>

Item 14. Principal Accountant Fees and Services.

         The following is a summary of the fees billed to us by the principal
accountants to the Company for professional services rendered for the fiscal
years ended February 28, 2009 and February 29, 2008:

                                                  Fiscal 2009       Fiscal 2008
         Fee Category                                Fees              Fees
                                                  ----------        ----------
         Audit Fees                               $   51,000        $   49,000
         Audit Related Fees                       $        0        $        0
         Tax Fees                                 $    3,000        $    3,000
         All Other Fees                           $        0        $        0

         Total Fees                               $   54,000        $   52,000

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

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

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

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

         Pre-Approval Policies and Procedures

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

                                     PART IV

Item 15. Exhibits and Financial Statement Schedules.

The following documents are filed as part of this report:

(1)      Financial Statements

         Financial Statements are listed in the Contents to Consolidated
         Financial Statements included with this report.

(2)      Financial Statement Schedules

         No financial statement schedules are included because such schedules
         are not applicable, are not required, or because required information
         is included in the financial statements or notes thereto.

(3)      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.

                                       24
<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 21, 2009


         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             May 21, 2009
------------------------       (Principal Executive Officer)       ------------
Greg Amato


/s/ Murray S. Cohen            Chairman of the Board,              May 21, 2009
------------------------       Secretary and Director              ------------
Murray S. Cohen


/s/ James Ivchenko             President and Director              May 21, 2009
------------------------       (Principal Financial Officer)       ------------
James Ivchenko


/s/ James R. Torpey, Jr.       Director                            May 22, 2009
------------------------                                           ------------
James R. Torpey, Jr.


Herve A. Meillat               Director                            May 23, 2009
------------------------                                           ------------
Herve A. Meillat

                                       25
<PAGE>




                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                                   YEARS ENDED

                     FEBRUARY 28, 2009 AND FEBRUARY 29, 2008





<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 - 23



<PAGE>

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

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


         We have audited the accompanying Consolidated Balance Sheets of Epolin,
Inc. and it's wholly owned Subsidiary as of February 28, 2009 and February 29,
2008 and the related Consolidated Statements of Income, Stockholders' Equity and
Cash Flows for each of the two years in the periods ended February 28, 2009 and
February 29, 2008. 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 28, 2009 and February 29, 2008, and the results of its
operations and its cash flows for each of the two years in the periods ended
February 28, 2009 and February 29, 2008, in conformity with accounting
principles generally accepted in the United States of America.


/s/ Weismann Associates LLC
---------------------------
Weismann Associates LLC
Branchburg, NJ 08876

April 23, 2009

                                       1
<PAGE>
<TABLE>
<CAPTION>
                                     ASSETS

                                                                     February 28,    February 29,
                                                                         2009            2008
                                                                     ------------    ------------
<S>                                                                  <C>                <C>

Current assets:
  Cash and cash equivalents                                          $  1,544,966       1,980,142
  Accounts receivable                                                     371,443         618,445
  Inventories                                                             667,184         642,529
  Prepaid expenses                                                         56,298          60,412
  Prepaid taxes                                                           228,346              --
  Deferred tax assets-current portion                                      18,377          25,182
                                                                     ------------    ------------

     Total current assets                                               2,886,614       3,326,710
                                                                     ------------    ------------
Plant, property and equipment - at cost:
  Land                                                                     81,000          81,000
  Building and improvements                                               767,300         710,758
  Laboratory equipment                                                    191,549         189,300
  Furniture and office equipment                                          233,387         215,764
  Leasehold improvements                                                  532,131         458,495
                                                                     ------------    ------------

     Total                                                              1,805,367       1,655,317

Less:  Accumulated depreciation and amortization                          905,242         800,593
                                                                     ------------    ------------

     Net plant, property and equipment                                    900,125         854,724
                                                                     ------------    ------------

Other assets:
  Deferred tax assets-non current portion                                  95,504          94,973
  Cash value - life insurance policy                                      213,452         201,369
                                                                     ------------    ------------

     Total other assets                                                   308,956         296,342
                                                                     ------------    ------------

       Total                                                         $  4,095,695       4,477,776
                                                                     ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        2
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                     February 28,    February 29,
                                                                          2009            2008
                                                                     ------------    ------------
<S>                                                                  <C>                    <C>
Current liabilities:
  Accounts payable                                                   $     38,698           9,660
  Accrued expenses                                                        284,424         270,755
  Taxes payable:
    Payroll                                                                 2,208           1,889
    Income                                                                     --          37,400
                                                                     ------------    ------------
      Total current liabilities                                           325,330         319,704

Other liabilities - Deferred compensation                                 221,388         246,683
                                                                     ------------    ------------

      Total liabilities                                                   546,718         566,387
                                                                     ------------    ------------

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;
    13,015,000 and 12,915,000 shares issued, and 12,066,355 and
    11,966,355 shares outstanding at February 28, 2009 and
    February 29, 2008, repectively                                      2,364,693       2,364,693
    Additional paid-in capital                                            104,820          76,820
    Retained earnings                                                   1,430,546       1,820,958
                                                                     ------------    ------------

         Total                                                          3,900,059       4,262,471
    Less: Treasury stock - at cost                                        351,082         351,082
                                                                     ------------    ------------

      Total stockholders' equity                                        3,548,977       3,911,389
                                                                     ------------    ------------

        Total                                                        $  4,095,695       4,477,776
                                                                     ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
               YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008


                                                                         2009            2008
                                                                     ------------    ------------
<S>                                                                  <C>                <C>
Sales                                                                $  3,091,539       3,592,940
                                                                     ------------    ------------
Cost of sales and expenses:
  Cost of sales                                                         1,444,199       1,404,009
  Selling, general and administrative                                   1,251,521       1,235,078
                                                                     ------------    ------------

    Total                                                               2,695,720       2,639,087
                                                                     ------------    ------------

Operating income                                                          395,819         953,853
                                                                     ------------    ------------
Other income:
  Rental income                                                            18,000          18,000
  Miscellaneous                                                                --          66,881
  Interest                                                                 52,861          89,348
                                                                     ------------    ------------

    Total                                                                  70,861         174,229
                                                                     ------------    ------------

Income before taxes                                                       466,680       1,128,082

Income taxes                                                              139,111         404,455
                                                                     ------------    ------------

Net income                                                           $    327,569         723,627
                                                                     ============    ============
Per share data:
  Basic earnings per common share                                    $       0.03            0.06
                                                                     ============    ============

  Fully diluted earnings per common share                            $       0.03            0.06
                                                                     ============    ============

  Weighted average number of common shares outstanding                 12,015,944      11,966,355
                                                                     ============    ============

  Fully diluted number of common shares outstanding                    12,056,380      12,004,973
                                                                     ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        4
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
               YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008

                                  Number of                 Additional
                                   Shares        Common       Paid-in-     Retained       Treasury     Treasury     Stockholders'
                                   Issued        Stock        Capital      Earnings        Shares       Stock          Equity
                                ------------   ----------   ----------   ------------    ----------   ----------    ------------
<S>                               <C>          <C>              <C>         <C>             <C>         <C>            <C>
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
                                ============   ==========   ==========   ============    ==========   ==========    ============


Balance - March 1, 2008           12,915,000   $2,364,693       76,820      1,820,958       948,645     (351,082)      3,911,389

Dividends paid                            --           --           --       (717,981)           --           --        (717,981)

Stock-based compensation             100,000           --       28,000             --            --           --          28,000

Net income                                --           --           --        327,569            --           --         327,569
                                ------------   ----------   ----------   ------------    ----------   ----------    ------------

Balance - February 28, 2009       13,015,000   $2,364,693      104,820      1,430,546       948,645     (351,082)      3,548,977
                                ============   ==========   ==========   ============    ==========   ==========    ============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        5
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008


                                                                         2009            2008
                                                                     ------------    ------------
<S>                                                                  <C>                  <C>
Cash flows from operating activities:
  Net income                                                         $    327,569         723,627
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                        104,599          88,336
     Deferred tax expense                                                   6,274          42,558
     Stock based compensation                                              28,000          14,709
     Obligation under deferred compensation agreement                     (25,295)        (39,181)
  (Increase) decrease in:
     Accounts receivable                                                  247,002         (71,493)
     Inventories                                                          (24,655)          9,119
     Prepaid expenses                                                       4,114          17,355
     Prepaid taxes                                                       (228,346)          1,920
  Increase (decrease) in:
     Accounts payable                                                      29,038         (42,122)
     Accrued expenses                                                      13,669          25,850
     Taxes payable                                                        (37,081)         30,864
                                                                     ------------    ------------

        Net cash provided by operating activities                         444,888         801,542
                                                                     ------------    ------------
Cash flows from investing activities:
  (Increase) decrease in cash value - life insurance policy               (12,083)         25,889
  Payments for property and equipment                                    (150,000)       (119,981)
                                                                     ------------    ------------

        Net cash used in investing activities                            (162,083)        (94,092)
                                                                     ------------    ------------
Cash flows used in financing activities:
  Dividends paid                                                         (717,981)       (478,654)
                                                                     ------------    ------------

Increase (decrease) in cash                                              (435,176)        228,796

Cash and cash equivalents:
  Beginning                                                             1,980,142       1,751,346
                                                                     ------------    ------------

  Ending                                                             $  1,544,966       1,980,142
                                                                     ============    ============
Supplemental disclosures of cash flows:
  Income taxes paid                                                  $    273,398         249,628
                                                                     ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        6
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 Corporation, 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 presented herein
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 intercompany 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 55.3% of the
Company's trade receivables at February 28, 2009.

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.

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.

                                       7
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Principles of Consolidation - The accompanying Unaudited Consolidated Financial
Statements include the accounts of the Company and Subsidiary. Inter-company
transactions and balances have been eliminated in consolidation. Condensed
Unaudited Consolidating Financial Statements as of February 28, 2009 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                                   $  2,515,576         371,038              --       2,886,614
Non-current assets                                  1,580,119         654,558      (1,025,596)      1,209,081
                                                 ------------    ------------    ------------    ------------
      Total                                      $  4,095,695       1,025,596      (1,025,596)      4,095,695
                                                 ============    ============    ============    ============

  Total liabilities                              $    546,718          24,435         (24,435)        546,718
                                                 ------------    ------------    ------------    ------------
Stockholders' equity:
  Common stock                                      2,364,693              --              --       2,364,693
  Additional paid-in capital                          104,820              --              --         104,820
  Retained earnings                                 1,430,546       1,001,161      (1,001,161)      1,430,546
  Treasury stock                                     (351,082)             --              --        (351,082)
                                                 ------------    ------------    ------------    ------------

  Total stockholders' equity                        3,548,977       1,001,161      (1,001,161)      3,548,977
                                                 ------------    ------------    ------------    ------------

      Total                                      $  4,095,695       1,025,596      (1,025,596)      4,095,695
                                                 ============    ============    ============    ============
<CAPTION>
                   CONDENSED CONSOLIDATING STATEMENT OF INCOME
                                                                    Epolin
                                                   Epolin          Holding,
                                                     Inc.            Corp.       Eliminations    Consolidated
                                                 ------------    ------------    ------------    ------------
<S>                                              <C>                  <C>         <C>               <C>
Sales                                            $  3,091,539              --              --       3,091,539
Rental income                                              --         115,740         (97,740)         18,000
                                                 ------------    ------------    ------------    ------------
      Total                                         3,091,539         115,740         (97,740)      3,109,539
                                                 ------------    ------------    ------------    ------------

Cost of sales                                       1,444,199              --              --       1,444,199
Selling, general and administrative                 1,321,655          27,606         (97,740)      1,251,521
                                                 ------------    ------------    ------------    ------------

      Total                                         2,765,854          27,606         (97,740)      2,695,720
                                                 ------------    ------------    ------------    ------------

Operating income                                      325,685          88,134              --         413,819

Other income - interest                                42,087          10,774              --          52,861
                                                 ------------    ------------    ------------    ------------

Income before taxes                                   367,772          98,908              --         466,680

Income taxes                                          131,331           7,780              --         139,111
                                                 ------------    ------------    ------------    ------------

Net income                                       $    236,441          91,128              --         327,569
                                                 ============    ============    ============    ============
</TABLE>

                                        8
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

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:


                                                          Estimated 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 $104,599 and $88,336 for
the years ended February 28, 2009 and February 29, 2008, 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.

         FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes
-- an interpretation of FASB Statement No. 109 (FIN 48), clarifies the
accounting for uncertainty in income tax positions, as defined. FIN 48 requires,
among other matters, that the Company recognize in its financial statements, the
impact of a tax position, if that position is more likely than not of being
sustained on audit, based on the technical merits of the position. The Company
became subject to the provisions of FIN 48 as of March 1, 2007, the beginning of
fiscal year ended 2008, and analyzed the filing positions in all of the federal
and state jurisdictions where it is required to file income tax returns, as well
as all open tax years in these jurisdictions. The adoption of FIN 48 had no
impact on the Company's financial statements for fiscal year ended 2009. As of
February 28, 2009 and February 29, 2008, the Company did not record any
unrecognized tax benefits. The Company's policy, if it had unrecognized
benefits, is to recognize accrued interest and penalties related to unrecognized
tax benefits as interest expense and other expense, respectively.

                                       9
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $36,331 and $30,967 through
February 28, 2009 and February 29, 2008, respectively, to maintain compliance
with certain Federal and State and City government regulations relative to the
production of near infrared dyes and specialty chemicals.

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

Advertising Costs - Advertising costs, included in operating expenses, are
expensed as incurred. Advertising expenses amounted to $19,905 and $13,307 for
the years ended February 28, 2009 and February 29, 2008, respectively.

                                       10
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Stock-Based Compensation - Effective March 1, 2006, the Company has adopted
Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based
Payment". SFAS 123R requires 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. The Company determines the fair value of stock-based compensation
using the Black-Scholes option-pricing model, which requires the Company to make
assumptions regarding future dividends, expected volatility of its stock, and
the expected lives of the options. Under SFAS 123R the Company also makes
assumptions regarding the number of options and the number of shares of
restricted stock and performance shares that will ultimately vest. As a result
of the adoption of FAS 123R, stock-based compensation expense recognized
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 year ended February 29, 2008, the Company recognized
stock-based compensation expenses of $14,709, 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 28, 2009 and February 29, 2008 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:

                                                 February 28,    February 29,
                                                     2009            2008
                                                 ------------    ------------
Weighted average expected life in years                     2               3
Dividends per share                                      0.06            0.04
Volatility                                                7.0%            7.0%
Risk-free interest rate                                   4.0%            4.9%

                                       11
<PAGE>

                          EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Recently Adopted Accounting Standards - On March 1, 2008, the Company adopted
Statement of Financial Accounting Standard ("SFAS") No. 157, "Fair Value
Measurements" ("FAS 157") for financial assets and liabilities, which clarifies
the meaning of fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Fair value is defined under
FAS 157 as the exchange price that would be received for an asset or paid to
transfer a liability in the principal or most advantageous market for the assets
or liabilities in an orderly transaction between market participants on the
measurement date. Subsequent changes in fair value of these financial assets and
liabilities are recognized in earnings or other comprehensive income when they
occur. The effective date of the provisions of FAS 157 for non-financial assets
and liabilities, except for items recognized at fair value on a recurring basis,
was deferred by Financial Accounting Standards Board ("FASB") Staff Position FAS
157-2 ("FSP FAS 157-2") and are effective for the fiscal year beginning March 1,
2009. The Company is currently evaluating the impact of the provisions for
non-financial assets and liabilities. The adoption of FAS 157 for financial
assets and liabilities did not have an impact on the Company's consolidated
financial position or results of operations. For additional information on the
fair value of financial assets and liabilities, see Note N - Fair Value
Measurements.

         Also, effective March 1, 2008, the Company adopted SFAS No. 159 "The
Fair Value Option for Financial Assets and Financial Liabilities" ("FAS 159")
which allows an entity the irrevocable option to elect fair value for the
initial and subsequent measurement for certain financial assets and liabilities
on a contract-by-contract basis. As of February 28, 2009, the Company has not
elected the fair value option for any additional financial assets and
liabilities beyond those already prescribed by accounting principles generally
accepted in the United States.

         In October 2008, the FASB issued Staff Position No. FAS 157-3,
"Determining the Fair Value of a Financial Asset in a Market That Is Not Active
("FSP FAS 157-3")." FSP FAS 157-3 clarifies the application of FAS 157 in a
market that is not active and defines additional key criteria in determining the
fair value of a financial asset when the market for that financial asset is not
active. FSP FAS 157-3 applies to financial assets within the scope of accounting
pronouncements that require or permit fair value measurements in accordance with
FAS 157. FSP FAS 157-3 was effective upon issuance and the application of FSP
FAS 157-3 did not have a material impact on our consolidated financial
statements.


                                       12
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C - Income Taxes:

1. Federal and State deferred tax assets include:
<TABLE>
<CAPTION>

                                                           February 28,    February 29,
                                                               2009            2008
                                                           ------------    ------------
<S>                                                        <C>                    <C>
         Temporary differences:
              Accelerated amortization                     $      2,629           2,696
              Deferred compensation                              95,198         101,405
              Stock-based compensation                           16,054          16,054
                                                           ------------    ------------
                    Total                                       113,881         120,155

         Current portion                                         18,377          25,182
                                                           ------------    ------------

         Non-current portion                               $     95,504          94,973
                                                           ============    ============
</TABLE>

2. Income tax expense: February 28, February 29,
<TABLE>
<CAPTION>

                                                               2009            2008
                                                           ------------    ------------
<S>                                                        <C>                  <C>
         Current:
              Federal                                      $    108,635         275,000
              State                                              24,202          86,897
                                                           ------------    ------------

                    Total current                               132,837         361,897
                                                           ------------    ------------
         Deferred:
              Federal                                             3,718          36,602
              State                                               2,556           5,956
                                                           ------------    ------------

                    Total deferred                                6,274          42,558
                                                           ------------    ------------

                        Total                              $    139,111         404,455
                                                           ============    ============
</TABLE>

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

                                                           February 28,    February 29,
                                                               2009            2008
                                                           ------------    ------------
<S>                                                        <C>                  <C>
         Computed at the statutory rate                    $    158,671         349,705
         State income taxes (net)                                24,202          86,897
         (Increase) Decrease in deferred tax asset                6,274          42,558
         General business credits                               (29,944)        (42,993)
         Other reconciling items                                (20,092)        (31,712)
                                                           ------------    ------------

                    Effective tax                          $    139,111         404,455
                                                           ============    ============
</TABLE>

                                       13
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D - Treasury Stock:

Consists of 948,645 shares at a net cost of $351,082, as of February 28, 2009
and February 29, 2008, respectively. There were no purchases of treasury shares
made during the years ended February 28, 2009 and February 29, 2008.

NOTE E - Economic Dependency:

         A material portion of the Company's business is dependent on certain
domestic customers, the loss of which could have a material effect on
operations. During the year ended February 28, 2009, approximately 31.0% of
sales were to three customers. 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.

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, and continuing
on a month-to-month basis thereafter. 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 $460,682 and
$392,992 were included in cost of sales for the years ended February 28, 2009
and February 29, 2008, respectively. Expenditures for the fiscal year ended 2010
are projected to remain at approximately the same level as in fiscal 2009.

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 $42,915 and
$54,257 for the years ended February 28, 2009 and February 29, 2008,
respectively.

                                       14
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - Employee Benefits (continued):

Stock Option Plan - 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. From inception through February
28, 2009, options granted totaled 1,242,000, options exercised totaled 686,000;
options cancelled or expired for all years totaled 240,000.

         A summary of the status of the Company's 1998 stock option plan as of
February 28, 2009, and the changes during the years ended February 28, 2009 and
February 29, 2008 is presented below:

                                                             Weighted-Average
Fixed Options:                             Shares             Exercise Price
--------------                             -------            -------------
Balance - February 29, 2008                316,000                $.50
                                           =======

Balance - February 28, 2009                316,000                $.50
                                           =======

Exercisable at February 28, 2009           316,000                $.50
                                           =======


Stock Option and Stock-Based Employee Compensation - On November 1, 2004, the
Company entered into an "Option Agreement and Investment Agreement" with Gregory
Amato, CEO, 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.

                                       15
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - Employee Benefits (continued):

Stock Option Plans - The following table summarizes information about fixed
stock options outstanding at February 28, 2009:
<TABLE>
<CAPTION>

                     Outstanding Options                                Exercisable Options
   --------------------------------------------------------     -------------------------------
                            Number       Weighted-Average         Number
      Range of           Outstanding         Remaining          Exercisable     Weighted-Average
   Exercise Price        at 02/28/09      Contractual Life      at 02/28/09      Exercise Price
   --------------        -----------      ----------------      -----------      --------------
<S>                        <C>                  <C>                <C>                 <C>
        $.41               116,000              5.0                116,000             .23
         .51               100,000              0.7                100,000             .25
         .54               200,000              1.3                200,000             .52
</TABLE>


Stock Option and Stock-Based Compensation Plan - On June 18, 2008, the Company's
Board of Directors approved and adopted the Epolin, Inc. 2008 Stock Incentive
Plan (the "2008 Plan"), and authorized us to issue up to 1,500,000 shares of our
Common Stock under the 2008 Plan (subject to adjustment to take account of stock
dividends, stock splits, recapitalizations and similar corporate events). Under
the 2008 Plan, the Company will have the right to issue stock options, stock
appreciation rights, restricted stock, Common Stock or convertible securities
that may or may not be subject to restrictions or forfeiture, restricted stock
units, performance shares and performance units. With the adoption of the new
2008 Plan, the 1998 Plan will terminate, and the Company will no longer be able
to grant options under it. However, options that have already been granted under
the 1998 Plan will continue to be outstanding.

         The purpose of the Plan is to provide officers, other employees and
directors of, and consultants to, the Company, an incentive to (a) enter into
and remain in the Company's service or to provide services to the Company, (b)
enhance the Company's long term performance, (c) acquire a proprietary interest
in the Company.

         The Compensation Committee or another committee of our Board of
Directors (or if there is no committee, the Board of Directors itself) will
administer the Plan. It will determine the persons to whom awards will be made,
the types of awards that will be made to particular persons, the numbers of
shares to which awards will relate, the dates when awards will vest in whole or
in part and the other terms of awards, including the payments, if any, that
participants will have to make to benefit from awards.

         The 2008 Plan provides that on September 1 of each year, commencing
September 1, 2008, each person who serves as a Director on such date shall
automatically receive a stock award of 25,000 shares of Common Stock. The dollar
value of the shares of Common Stock to be granted on September 1 of each year is
calculated based upon the fair market value of our Common Stock at the date of
grant.

                                       16
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE H - Employee Benefits (continued):

Stock Option and Stock-Based Compensation Plan
----------------------------------------------

         In connection with this plan, compensation in the amount of $28,000 was
charged to selling, general and administrative expenses for the year ended
February 28, 2009.

NOTE I - 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 28,    February 29,
                                                     2009            2008
                                                 ------------    ------------
         United States                           $  2,114,706       2,837,852
         Asia                                         578,060         481,355
         Europe                                       398,173         273,183
         Other nations                                    600             550
                                                 ------------    ------------

           Total                                 $  3,091,539       3,592,940
                                                 ============    ============

         Two customers, located in the United States and Asia, accounted for
more than 10% of revenues from continuing operations. These customers accounted
for 21.8% of sales of infrared dies.

         Long-lived assets include net plant, property and equipment. The
Company had long-lived assets of $900,125 and $854,724 located in the United
States at February 28, 2009 and February 29, 2008, respectively.

                                       17
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE J - Accrued Expenses:

         Accrued expenses consisted of the following as of February 28, 2009 and
February 29, 2008, respectively:

                                                 February 28,    February 29,
                                                     2009            2008
                                                 ------------    ------------
         Commissions                             $      8,444              --
         Purchases                                     10,980          12,330
         Employment agreement                         240,000         225,000
         Professional fees                             25,000          28,000
         Pension contribution                              --           5,425
                                                 ------------    ------------
           Total accrued expenses                $    284,424         270,755
                                                 ============    ============

NOTE K - Inventories:
                                                 February 28,    February 29,
                                                     2009            2008
                                                 ------------    ------------
         Raw materials and supplies              $    138,730         123,286
         Work in process                              117,314          45,379
         Finished goods                               411,140         473,864
                                                 ------------    ------------
           Total                                 $    667,184         642,529
                                                 ============    ============


                                       18
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE L - Earnings Per Share:

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


                                                         Years Ended
                                                 ----------------------------
                                                 February 28,    February 29,
                                                     2009            2008
                                                 ------------    ------------
Basic Earnings Per Common Share:

Net income                                       $    327,569         723,627
                                                 ============    ============
Average common shares
  outstanding                                      12,015,944      11,966,355
                                                 ============    ============
Basic earnings per
  common share                                   $       0.03            0.06
                                                 ============    ============
Diluted Earnings Per Common Share:

Net income                                       $    327,569         723,627
                                                 ============    ============
Average common shares
  outstanding                                      12,015,944      11,966,355

Common shares issuable with respect
to options issued to employees
with a dilutive effect                                 40,436          38,618
                                                 ------------    ------------
Total diluted common shares
  outstanding                                      12,056,380      12,004,973
                                                 ============    ============
Diluted earnings per
  common share                                   $       0.03            0.06
                                                 ============    ============

                                       19
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE M - Commitments and Contingencies:

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

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

Rental expense charged to operations, eliminated in consolidation, amounted to
$97,740 for the years ended February 28, 2009 and February 29, 2008,
respectively.

Future minimum payments for the current option period:

          Fiscal Years Ending February:
          -----------------------------
                       2010                                     $24,435
                       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.

         In connection with this agreement, compensation in the amount of $6,706
and $5,171 was charged to selling, general and administrative expenses for the
years ended February 28, 2009 and February 29, 2008, respectively.

         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.

                                       20
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 28, 2009 and February 29, 2008 was $240,000 and $225,000,
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.

                                       21
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE N - Fair Value Measurements:

         Effective March 1, 2008, the Company adopted FAS 157, which defines
fair value as the exchange price that would be received for an asset or paid to
transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market
participants at the measurement date. FAS 157 establishes a three-level fair
value hierarchy that prioritizes the inputs used to measure fair value. This
hierarchy requires entities to maximize the use of observable inputs and
minimize the use of unobservable inputs. The three levels of inputs used to
measure fair value are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices included in Level 1, such
          as quoted prices for similar assets and liabilities in active markets;
          quoted prices for identical or similar assets and liabilities in
          markets that are not active; or other inputs that are observable or
          can be corroborated by observable market data.

Level 3 - Unobservable inputs that are supported by little or no market activity
          and that are significant to the fair value of the assets or
          liabilities. This includes certain pricing models, discounted cash
          flow methodologies and similar techniques that use significant
          unobservable inputs.

All financial assets that are measured at fair value on a recurring basis (at
least annually) have been segregated into the most appropriate level within the
fair value hierarchy based on the inputs used to determine the fair value at the
measurement date. These assets measured at fair value on a recurring basis are
summarized below:
<TABLE>
<CAPTION>

                                            February 28, 2009               February 29, 2008
                                       ----------------------------    ----------------------------
                                         Carrying          Fair          Carrying          Fair
                                          Amount           Value          Amount           Value
                                       ------------    ------------    ------------    ------------
<S>                                    <C>                <C>             <C>             <C>
Assets:
-------
Cash and cash equivalents              $  1,544,966       1,544,966       1,980,142       1,980,142
Other assets:
     Cash value - life insurance            213,452         213,452         201,369         201,369
                                       ------------    ------------    ------------    ------------

Total assets at fair value             $  1,758,418       1,758,418       2,181,511       2,181,511
                                       ============    ============    ============    ============
Liabilities:
------------
Deferred compensation                  $    221,388         221,388         246,683         246,683
                                       ============    ============    ============    ============
</TABLE>

                                       22
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE N - Dividends:

         In July 2008, the Company's Board of Directors declared a cash dividend
of $0.04 per share on all common shares outstanding. The dividend, in the amount
of $478,654 was paid on August 7, 2008 to shareholders of record at the close of
business on July 24, 2008.

         In April 2008, 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, 2008 to shareholders of record at the
close of business on April 30, 2008.

         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.

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.

                                       23