UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, DC 20549

                           FORM 10-Q

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

        For the quarterly period ended November 30, 2008

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

  For the transition period from            to ______

                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                           Identification No.)
organization)

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

                         (973) 465-9495
      (Registrant's Telephone Number, Including Area Code)

                         Not applicable
 (Former Name, Former Address and Former Fiscal Year, if Changed
                       Since Last Report)


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 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 by Rule 12b-2 of the Exchange Act).
                         Yes   [    ] No   [  X  ]

State the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date: no
par value per share: 12,066,355 outstanding as of January 1,
2009.

<PAGE>
                          EPOLIN, INC.

                        TABLE OF CONTENTS

                                                  Page
PART I - FINANCIAL INFORMATION

     Item 1.  Financial Statements.                 3
     Item 2.  Management's Discussion and           3
              Analysis of Financial Condition
              and Results of Operations.
     Item 3.  Quantitative and Qualitative          8
              Disclosures About Market Risk.
     Item 4T. Controls and Procedures.              8


PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings.                   10
     Item 2.  Unregistered Sales of Equity         10
              Securities and Use of Proceeds.
     Item 3.  Default upon Senior Securities.      10
     Item 4.  Submission of Matters to a Vote of   10
              Security Holders.
     Item 5.  Other Information.                   10
     Item 6.  Exhibits.                            10

SIGNATURES                                         11

<PAGE>


                 PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.

      See  the Consolidated Financial Statements annexed to  this
report.


Item  2.    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.

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 under the caption "Uncertainties and
Risk Factors" in Part I, Item 1 "Description of Business" of the
Company's Form 10-KSB for the year ended February 29, 2008.  The
Company does not intend to update these forward-looking
statements.

Executive Overview

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

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

     We sell our products to manufacturers of plastics/resins,
credit cards, electronics, glass and other basic materials.  Our
customers are located in all regions of the world, although a
material portion of our business is dependent on certain domestic
customers, the loss of which could have a material effect on
operations.  As the service economy continues to dwarf the
manufacturing sector in the United States, we now offer our
customers added service in the form of formulated inks and
resins.  This has resulted in increasing our worldwide sales of
these products and, we believe, lessens the threat of competition
from lower cost dyes manufactured abroad.  During the nine months
ended November 30, 2008, approximately 31.0% of sales were to
three customers.  During the nine months ended November 30, 2007,
approximately 37.9% of sales were to three customers.  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 three
and six months ended November 30, 2008 and 2007.

<PAGE>



                    Three Months Ended November 30,

                          2008        2007          %
                                                  change

Sales                   $733,045     $826,610     -11.3%

Gross profit             415,891      584,926     -28.9%

Gross profit               56.7%       70.7%      -14.0%
percentage

Selling, general &       321,330      301,151       6.7%
administrative

Operating income          94,561      283,775     -66.7%
Other Income               9,372       81,305     -88.5%

Income before taxes      103,933      365,080     -71.5%

Income taxes              28,952      147,166     -80.3%

Net income (after        $74,981     $217,914     -65.6%
taxes)

                    Nine Months Ended November 30,

                       2008          2007           %
                                                  change

Sales                 $2,497,516   $2,761,168      -9.5%

Gross profit           1,413,855    1,742,928     -18.9%

Gross profit               56.6%        63.1%      -6.5%
percentage

Selling, general &       945,395      940,149       0.6%
administrative

Operating income         468,460      802,779     -41.6%
Other Income              49,381      117,489     -58.0%


Income before taxes      517,841      920,268     -43.7%

Income taxes             187,021      352,714     -47.0%

Net income (after       $330,820     $567,554     -41.7%
taxes)


Sales

     For the three months ended November 30, 2008, sales were
$733,000 as compared to $827,000 for the three months ended
November 30, 2007, a decrease of $94,000 or 11.3%.  Sales
decreased to $2,498,000 for the nine months ended November 30,
2008 from $2,761,000 for the nine months ended November 30, 2007,
a decrease of $263,000 or 9.5%.

     Such decreases in sales for the three and nine months ended
November 30, 2008 compared to the prior year periods is primarily
due to our ink and coating sales which have deteriorated
significantly in recent periods.  For the three months ended
November 30, 2008, sales in the ink and coating market decreased
$424,000 compared to the three months ended November 30, 2007,
while sales for the nine months ended November 30, 2008 decreased
$371,000 compared to the nine months ended November 30, 2007.
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.

<PAGE>

     While sales in the ink and coating market have been
declining, sales in the eye protection market and light
management market have been relatively strong.  Sales in the eye
protection market, which represents our oldest and most
traditional market, increased $107,000 or 10.8% for the nine
months ended November 30, 2008 compared to the prior year period.
Sales in the light management market increased $12,000 or 2.0% in
the nine months ended November 30, 2008 compared to the prior
year period.

     Sales overseas increased in Asia and Europe for the nine
months ended November 30, 2008 while sales decreased in the
United States for the nine months ended November 30, 2008,
compared to the prior year period.  For the nine months ended
November 30, 2008, sales in Asia increased to $436,000 from
$371,000 while in Europe, sales increased to $336,000 from
$158,000 for the prior year period.  In the United States, sales
decreased to $1,725,000 in the nine months ended November 30,
2008 from $2,231,000 in the nine months ended November 30, 2007.

Gross Profit

     Gross profit, defined as sales less cost of sales, was
$416,000 or 56.7% of sales for the three months ended November
30, 2008, compared to $585,000 or 70.7% of sales for the three
months ended November 30, 2007.  For the nine months ended
November 30, 2008, gross profit was $1,414,000 or 56.6% of sales,
compared to $1,743,000 or 63.1% of sales for the nine months
ended November 30, 2007.  In terms of absolute dollars, gross
profit decreased $169,000 for the three months ended November 30,
2008 compared to the prior year period, and decreased $329,000
for the nine months ended November 30, 2008 compared to the nine
months ended November 30, 2007.

     Cost of sales was $317,000 for the three months ended
November 30, 2008 which represented 43.3% of sales compared to
$242,000 for the three months ended November 30, 2007 which
represented 29.3% of sales.  For the nine months ended November
30, 2008, cost of sales was $1,084,000 which represented 43.4% of
sales, compared to $1,018,000 for the nine months ended November
30, 2007 which represented 36.9% of sales.  Total cost of
materials increased $54,000 in the nine months ended November 30,
2008 compared to the prior year period.  Total factory overhead
increased $12,000 in the nine months ended November 30, 2008
compared to the prior year period.  Although there were increases
in research and development salaries, these increases were
substantially offset by decreases in applied factory overhead,
laboratory supplies and other miscellaneous costs.  There were
also increases of $14,000 in research and development supplies.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses increased to
$321,000 for the three months ended November 30, 2008 compared to
$301,000 for the three months ended November 30, 2007, an
increase of $20,000, while selling, general and administrative
expenses increased to $945,000 for the nine months ended November
30, 2008 from $940,000 for the nine months ended November 30,
2007, an increase of $5,000.  Such increase was primarily due to
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 in the nine months ended
November 30, 2008 offset by increases in professional fees,
directors fees (non-cash compensation resulting from the grant of
shares), travel, office supplies, miscellaneous expenses and
applied factory overhead.  In addition, we incurred a placement
fee of $12,000 in the nine months ended November 30, 2007 for
which there was no comparable item in the nine months ended
November 30, 2008.

Operating Income

     Operating income, in terms of absolute dollars, decreased to
$95,000 for the three months ended November 30, 2008 from
$284,000 for the three months ended November 30, 2007, a decrease
of $189,000, while operating income decreased to $468,000 for the
nine months ended November 30, 2008 from $803,000 for the prior
year period, a decrease of $335,000.  Such change in the three
and nine months periods was primarily due to the decrease in
sales for the three and nine months ended November 30, 2008
compared to the three and nine months ended November 30, 2007.
As a percentage of sales, operating income was 13.0% of sales for
the three months ended November 30, 2008 compared to 34.3% of
sales for the three months ended November 30, 2007.  For the nine
months ended November 30, 2008 compared to the prior year period,
operating income decreased as a percentage of sales to 18.7% from
29.1%.

<PAGE>

Other Income

     Total other income was $9,000 and $49,000 for the three and
nine months ended November 30, 2008 compared to $81,000 and
$117,000 for the three and nine months ended November 30, 2007.
During the quarter ended November 30, 2007, we received an
insurance reimbursement of $61,000 for which there was not a
comparable item during the nine months ended November 30, 2008.
We realize rental income of $4,500 and $13,500 for the three and
nine months ended November 30, 2008 and 2007.  Our interest
income was $5,000 and $36,000 for the three and nine months ended
November 30, 2008 compared to $16,000 and $43,000 for the prior
year periods.

Net Income

     During the three months ended November 30, 2008, we reported
income before taxes of $104,000 as compared to income before
taxes of $365,000 for the three months ended November 30, 2007, a
decrease of $261,000.  During the nine months ended November 30,
2008, we reported income before taxes of $518,000 as compared to
income before taxes of $920,000 for the nine months ended
November 30, 2007, a decrease of $402,000.  Income taxes were
$29,000 and $187,000 for the three and nine months ended November
30, 2008 while income taxes were $147,000 and $353,000 for the
comparable periods of 2007.  The changes in income taxes were
generally attributed to changes from period to period in sales
and expenses.  Net income after taxes was $75,000 or $0.01 per
share for the three months ended November 30, 2008 as compared to
net income after taxes of $218,000 or $0.02 per share for the
three months ended November 30, 2007.  For the nine months ended
November 30, 2008, net income after taxes was $331,000 or $0.03
per share as compared to net income after taxes of $568,000 or
$0.05 per share for the nine months ended November 30, 2007.

     Net income in the future will be dependent upon our ability
to increase revenues faster than increases, if any, in our
selling, general and administrative expenses, research and
development expenses and other expenses.  Prior to fiscal 2007,
sales had grown for a number of consecutive years.  In fiscal
2007, however, sales decreased by $91,000 compared to fiscal 2006
and, in fiscal 2008, sales decreased by $17,000 compared to
fiscal 2007.   While sales have decreased, net income did improve
in fiscal 2008 by $101,000 compared to fiscal 2007 and net income
increased by $29,000 in fiscal 2007 compared to fiscal 2006.
During the first nine months of fiscal 2009, however, sales
decreased by $263,000 and net income decreased to a lesser extent
by $237,000 compared to the first nine months of 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 the first nine months of
fiscal 2009 in which sales decreased $263,000 or 9.5% compared to
the first nine months of 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 source of
business for us, we may not be able achieve the same type of
growth in the security inks market in the future.  Nevertheless,
we are confident that with our core group of products, we will be
able to maintain sales in our principal markets, 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 has begun to explore strategic alternatives for the
Company.  There can be no assurance that the process will result
in a transaction that our Board determines is in the best
interests of the Company and its stockholders.  The Company does
not currently intend to publicly disclose further information
regarding the status of its review 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 November 30, 2008, we
had working capital of $2,648,000, a debt to equity ratio of 0.15
to 1, and stockholders' equity of $3,552,000 compared to working
capital of $3,007,000 a debt to equity ratio of 0.14 to 1, and
stockholders equity of $3,911,000 on February 29, 2008.  On
November 30, 2008, we had $1,624,000 in cash and cash
equivalents, total assets of $4,098,000 and total liabilities of
$545,000, 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.

<PAGE>

     Net cash provided by operating activities for the nine
months ended November 30, 2008 was $445,000 which was primarily
the result of net income of $331,000, plus decreases in accounts
receivable of $187,000 and increases in accounts payable of
$23,000, offset by increases in inventories of $73,000 and
prepaid taxes of $90,000, and decreases in accrued expenses of
$11,000 and taxes payable of $37,000.  Net cash provided by
operating activities for the nine months ended November 30, 2007
was $637,000 which was primarily the result of net income of
$568,000, plus an increase in taxes payable of $82,000, offset by
increases in inventories of $51,000, decreases in accounts
payable of $40,000 and in accrued expenses of $8,000.  Net cash
used by investing activities for the nine months ended November
30, 2008 was $82,000 due to equipment purchases of $74,000 and an
increase in cash value of a life insurance policy of $9,000,
while net cash used by investing activities was $73,000 for the
nine months ended November 30, 2007 due to equipment purchases of
$105,000 offset by a decrease in cash value of a life insurance
policy of $31,000.  For the nine months ended November 30, 2008,
net cash used by financing activities was $718,000 and was
$239,000 for the nine months ended November 30, 2007 which was
due to the payment of dividends in each 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 the balance of
fiscal 2009 and beyond will depend primarily upon level of sales
of our products, inventory levels, product development, sales and
marketing expenditures and capital expenditures.

     Inflation has not significantly impacted our operations.

Significant Accounting Policies

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

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

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

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

     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.

<PAGE>

     Stock-based Compensation - Prior to March 1, 2006, we
accounted for stock based compensation under Statement of
Financial Accounting Standards No. 123 Accounting for Stock-Based
Compensation (FAS 123). As permitted under this standard,
compensation cost was recognized using the intrinsic value method
described in Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25). Effective
March 1, 2006, we have adopted Statement of Financial Accounting
Standards ("SFAS") No. 123(R), "Share-Based Payment". SFAS 123R
revises SFAS No. 123 and supersedes APB 25 to require companies
to measure and recognize in operations the cost of employee
services received in exchange for an award of equity instruments
based on the grant-date fair value. In accordance with the
provisions of the Securities and Exchange Commission Staff
Accounting Bulletin No. 107, we have adapted the modified-
prospective transition method.  Prior periods were not restated
to reflect the impact of adopting the new standard.  As a result
of the adoption of FAS 123R, stock-based compensation expense
recognized for the period ended November 30, 2007 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.

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 has been paid in each of January 2007 and January 2008.
In addition to the foregoing, and considering our cash position,
the Board of Directors recently declared a supplemental special
cash dividend of $0.04 per share which was payable in August
2008.  We have not declared  another special cash dividend in
January 2009 similar to the special cash dividends we have paid
in January of prior years.

     In August 2001, our Board of Directors authorized a 500,000
share stock repurchase program.  Pursuant to the repurchase
program, the Company may purchase up to 500,000 shares of its
common stock in the open market or in privately negotiated
transactions from time to time, based on market prices.  The
Company indicated that the timing of the buyback of the Company's
shares will be dictated by overall financial and market
conditions and other corporate considerations.   The repurchase
program may be suspended without further notice.  There were no
repurchases made by the Company of shares of its Common Stock
during the fiscal year ended February 29, 2008 and the first nine
months of fiscal 2009.   In prior years, since the adoption of
the program, a total of 331,500 shares were repurchased at a
cumulative cost of $195,766.

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

     Morris Dunkel, a director of the Company, died on August 22,
2008.  The Board of Directors has made no decision as to when the
resulting vacancy on the Board will be filled.

Off-Balance Sheet Arrangements

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


Item  3.   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 4T.   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, our
Principal Executive Officer and Principal Financial Officer have
concluded that, as of November 30, 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.

<PAGE>

     There have been no significant changes in our internal
controls over financial reporting that occurred during the fiscal
quarter covered by this report that have materially affected, or
are reasonably likely to materially affect, our internal control
over financial reporting.


                   PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

     There are no material pending legal proceedings to which we
are a party or to which any of our property is subject.


Item 2.  Unregistered Sales of Equity Securities and Use of
         Proceeds.

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


Item 3.  Defaults Upon Senior Securities.

     None.


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

     None.


Item 5.  Other Information.

     None.


Item 6.  Exhibits.

     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)

<PAGE>


                           SIGNATURES

     Pursuant to the requirements 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)


Dated: January 12, 2009           By:  /s/ Greg Amato
                                       Greg Amato,
                                       Chief Executive Officer



Dated: January 12, 2009           By:  /s/ James Ivchenko
                                        James Ivchenko,
                                        President
                                        (Principal Financial Officer)


<PAGE>








                           EPOLIN, INC. AND SUBSIDIARY

                  CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

                                NINE MONTHS ENDED

                           NOVEMBER 30, 2008 AND 2007














<PAGE>

                                    CONTENTS

                                                                          Page
                                                                          ----

Consolidated Financial Statement (unaudited):

    Consolidated Balance Sheets (unaudited)                               2 - 3

    Consolidated Statements of Income (unaudited)                         4 - 5

    Consolidated Statement of Stockholders' Equity (unaudited)              6

    Consolidated Statements of Cash Flows (unaudited)                       7

Notes to Consolidated Financial Statements (unaudited)                    8 - 24


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                             November 30,
                                                                2008          February 29,
                                                             (Unaudited)          2008
                                                           --------------    --------------
<S>                                                        <C>                    <C>
Current assets:
 Cash and cash equivalents                                 $    1,624,467         1,980,142
 Accounts receivable                                              431,907           618,445
 Inventories                                                      715,438           642,529
 Prepaid expenses                                                  60,950            60,412
 Prepaid taxes                                                     90,450                --
 Deferred tax assets-current portion                               18,770            25,182
                                                           --------------    --------------

    Total current assets                                        2,941,982         3,326,710
                                                           --------------    --------------

Plant, property and equipment - at cost:
 Land                                                              81,000            81,000
 Building and improvements                                        767,300           710,758
 Laboratory equipment                                             191,638           189,300
 Furniture and office equipment                                   230,597           215,764
 Leasehold improvements                                           458,495           458,495
                                                           --------------    --------------

    Total                                                       1,729,030         1,655,317

 Less:  Accumulated depreciation and amortization                 878,172           800,593
                                                           --------------    --------------

    Net plant, property and equipment                             850,858           854,724
                                                           --------------    --------------

Other assets:
 Deferred tax assets-non current portion                           94,747            94,973
 Cash value - life insurance policy                               209,972           201,369
                                                           --------------    --------------

    Total other assets                                            304,719           296,342
                                                           --------------    --------------

      Total                                                $    4,097,559         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


                                                                       November 30,
                                                                          2008          February 29,
                                                                       (Unaudited)          2008
                                                                     --------------    --------------
<S>                                                                  <C>                        <C>
Current liabilities:
  Accounts payable                                                   $       32,382             9,660
  Accrued expenses                                                          259,348           270,755
  Taxes payable:
    Payroll                                                                   1,889             1,889
    Income                                                                       --            37,400
                                                                     --------------    --------------

        Total current liabilities                                           293,619           319,704


Other liabilities - Deferred compensation                                   251,712           246,683
                                                                     --------------    --------------

        Total liabilities                                                   545,331           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 November 30, 2008 and
    February 29, 2008, repectively                                        2,364,693         2,364,693
    Additional paid-in capital                                              104,820            76,820
    Retained earnings                                                     1,433,797         1,820,958
                                                                     --------------    --------------

        Total                                                             3,903,310         4,262,471
Less: Treasury stock - at cost                                              351,082           351,082
                                                                     --------------    --------------

     Total stockholders' equity                                           3,552,228         3,911,389
                                                                     --------------    --------------

        Total                                                        $    4,097,559         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 (Unaudited)
                  NINE MONTHS ENDED NOVEMBER 30, 2008 AND 2007

                                                               2008            2007
                                                           ------------    ------------
<S>                                                        <C>                <C>
Sales                                                      $  2,497,516       2,761,168
                                                           ------------    ------------
Cost of sales and expenses:
  Cost of sales                                               1,083,661       1,018,240
  Selling, general and administrative                           945,395         940,149
                                                           ------------    ------------

    Total                                                     2,029,056       1,958,389
                                                           ------------    ------------

Operating income                                                468,460         802,779
                                                           ------------    ------------
Other income:
  Rental income                                                  13,500          13,500
  Miscellaneous                                                      --          61,281
  Interest                                                       35,881          42,708
                                                           ------------    ------------

    Total                                                        49,381         117,489
                                                           ------------    ------------

Income before taxes                                             517,841         920,268

Income taxes                                                    187,021         352,714
                                                           ------------    ------------

Net income                                                 $    330,820         567,554
                                                           ============    ============
Per share data:
  Basic earnings per common share                          $       0.03            0.05
                                                           ============    ============

  Fully diluted earnings per common share                  $       0.03            0.05
                                                           ============    ============

  Weighted average number of common shares outstanding       11,999,446      11,966,355
                                                           ============    ============

  Fully diluted number of common shares outstanding          12,039,882      12,003,424
                                                           ============    ============

</TABLE>

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

                                        4
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                  THREE MONTHS ENDED NOVEMBER 30, 2008 AND 2007

                                                               2008            2007
                                                           ------------    ------------
<S>                                                             <C>             <C>
Sales                                                      $    733,045         826,610
                                                           ------------    ------------
Cost of sales and expenses:
  Cost of sales                                                 317,154         241,684
  Selling, general and administrative                           321,330         301,151
                                                           ------------    ------------

    Total                                                       638,484         542,835
                                                           ------------    ------------

Operating income                                                 94,561         283,775
                                                           ------------    ------------
Other income:
  Rental income                                                   4,500           4,500
  Miscellaneous                                                      --          61,081
  Interest                                                        4,872          15,724
                                                           ------------    ------------

    Total                                                         9,372          81,305
                                                           ------------    ------------

Income before taxes                                             103,933         365,080

Income taxes                                                     28,952         147,166
                                                           ------------    ------------

Net income                                                 $     74,981         217,914
                                                           ============    ============
Per share data:
  Basic earnings per common share                          $       0.01            0.02
                                                           ============    ============

  Fully diluted earnings per common share                  $       0.01            0.02
                                                           ============    ============

  Weighted average number of common shares outstanding       12,066,355      11,966,355
                                                           ============    ============

  Fully diluted number of common shares outstanding          12,106,791      12,003,424
                                                           ============    ============
</TABLE>

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

                                        5
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
                       NINE MONTHS ENDED NOVEMBER 30, 2008

                                                           Additional
                               Number of       Common       Paid-in-      Retained      Treasury     Treasury     Stockholders'
                             Shares Issued     Stock        Capital       Earnings       Shares       Stock          Equity
                             -------------   ----------   ------------   ----------    ----------   ----------    ------------
<S>                            <C>          <C>                <C>       <C>             <C>         <C>            <C>
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                              --           --             --      330,820            --           --         330,820
                              ------------   ----------   ------------   ----------    ----------   ----------    ------------

Balance - November 30, 2008     13,015,000   $2,364,693        104,820    1,433,797       948,645     (351,082)      3,552,228
                              ============   ==========   ============   ==========    ==========   ==========    ============
</TABLE>

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

                                        6
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                  NINE MONTHS ENDED NOVEMBER 30, 2008 AND 2007


                                                                         2008            2007
                                                                     ------------    ------------
<S>                                                                  <C>                  <C>
Cash flows from operating activities:
  Net income                                                         $    330,820         567,554
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                         77,579          65,160
     Deferred tax expense                                                   6,638          21,754
     Stock based compensation                                              28,000          13,042
     Obligation under deferred compensation agreement                       5,029         (24,244)
  (Increase) decrease in:
     Accounts receivable                                                  186,538           2,788
     Inventories                                                          (72,909)        (50,993)
     Prepaid expenses                                                        (538)          5,216
     Prepaid taxes                                                        (90,450)          1,920
  Increase (decrease) in:
     Accounts payable                                                      22,722         (40,050)
     Accrued expenses                                                     (11,407)         (7,595)
     Taxes payable                                                        (37,400)         82,221
                                                                     ------------    ------------

        Net cash provided by operating activities                         444,622         636,773
                                                                     ------------    ------------

Cash flows from investing activities:
  (Increase) decrease in cash value - life insurance policy                (8,603)         31,491
  Payments for equipment                                                  (73,713)       (104,739)
                                                                     ------------    ------------

        Net cash used in investing activities                             (82,316)        (73,248)
                                                                     ------------    ------------

Cash flows used in financing activities:
  Dividends paid                                                         (717,981)       (239,327)
                                                                     ------------    ------------

Increase (decrease) in cash                                              (355,675)        324,198

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

  Ending                                                             $  1,624,467       2,075,544
                                                                     ============    ============
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.

                                        7
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 interim Consolidated Financial Statements presented
herein are unaudited and should be read in conjunction with the Consolidated
Financial Statements presented in the Company's Annual Report on Form 10-KSB for
the fiscal year ended February 29, 2008. Such interim Consolidated Financial
Statements reflect all normal and recurring adjustments that, in the opinion of
management, are necessary for a fair presentation of the financial position,
results of operations and cash flows of the Company for the periods presented.
All significant intercompany accounts and transactions have been eliminated.

         The results of operations for the nine-month interim period ended
November 30, 2008 and 2007 are not necessarily indicative of the results of
operations for the fiscal year ending February 28, 2009.

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 November 30, 2008.

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

                                        8
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 November 30, 2008 and for the
nine months then ended are:

<TABLE>
<CAPTION>

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                          Epolin            Epolin
                                            Inc.         Holding, Corp.     Eliminations      Consolidated
                                       --------------    --------------    --------------    --------------
<S>                                    <C>                      <C>          <C>                <C>
Current assets                         $    2,603,572           338,410                --         2,941,982
Non-current assets                          1,493,987           661,459          (999,869)        1,155,577
                                       --------------    --------------    --------------    --------------
    Total                              $    4,097,559           999,869          (999,869)        4,097,559
                                       ==============    ==============    ==============    ==============

  Total liabilities                    $      545,331            24,435           (24,435)          545,331
                                       --------------    --------------    --------------    --------------

Stockholders' equity:
  Common stock                              2,364,693                --                --         2,364,693
  Additional paid-in capital                  104,820                --                --           104,820
  Retained earnings                         1,433,797           975,434          (975,434)        1,433,797
  Treasury stock                             (351,082)               --                --          (351,082)
                                       --------------    --------------    --------------    --------------

  Total stockholders' equity                3,552,228           975,434          (975,434)        3,552,228
                                       --------------    --------------    --------------    --------------

    Total                              $    4,097,559           999,869          (999,869)        4,097,559
                                       ==============    ==============    ==============    ==============
<CAPTION>

                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                          Epolin            Epolin
                                            Inc.         Holding, Corp.     Eliminations      Consolidated
                                       --------------    --------------    --------------    --------------
<S>                                    <C>                      <C>          <C>                <C>
Sales                                  $    2,497,516                --                --         2,497,516
Rental income                                      --            86,805           (73,305)           13,500
                                       --------------    --------------    --------------    --------------
    Total                                   2,497,516            86,805           (73,305)        2,511,016
                                       --------------    --------------    --------------    --------------

Cost of sales                               1,083,661                --                --         1,083,661
Selling, general and administrative           997,975            20,725           (73,305)          945,395
                                       --------------    --------------    --------------    --------------

    Total                                   2,081,636            20,725           (73,305)        2,029,056
                                       --------------    --------------    --------------    --------------

Operating income                              415,880            66,080                --           481,960
Other income - interest                        29,962             5,919                --            35,881
                                       --------------    --------------    --------------    --------------

Income before taxes                           445,842            71,999                --           517,841
Income taxes                                  180,423             6,598                --           187,021
                                       --------------    --------------    --------------    --------------

Net income                             $      265,419            65,401                --           330,820
                                       ==============    ==============    ==============    ==============
</TABLE>

                                        9
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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.

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.

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 $77,579 and $65,160 for
the nine months ended November 30, 2008 and 2007, respectively.

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

                                       10
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 $24,822 and $24,775 through
November 30, 2008 and 2007, 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 $13,356 and $10,576 for
the nine months ended November 30, 2008 and 2007, respectively.

                                       11
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Stock-Based Compensation - Prior to March 1, 2006 the Company accounted for
stock based compensation under Statement of Financial Accounting Standards No.
123 Accounting for Stock-Based Compensation (FAS 123). As permitted under this
standard, compensation cost was recognized using the intrinsic value method
described in Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25). Effective March 1, 2006, the Company has adopted
Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based
Payment". SFAS 123R revises SFAS No. 123 and supersedes APB 25 to require
companies to measure and recognize in operations the cost of employee services
received in exchange for an award of equity instruments based on the grant-date
fair value. In accordance with the provisions of the Securities and Exchange
Commission Staff Accounting Bulletin No. 107, the Company has adapted the
modified-prospective transition method. Prior periods were not restated to
reflect the impact of adopting the new standard. As a result of the adoption of
FAS 123R, stock-based compensation expense recognized for the period ended
November 30, 2007 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 nine and three months ended November 30, 2007, the Company
recognized stock-based compensation expenses of $13,042 and $4,667,
respectively, related to outstanding stock options according to the provisions
of FAS 123R, using the modified-prospective transition method.

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

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

         The weighted average Black-Scholes value of options granted under the
stock plans during the nine months ended November 30, 2008 and 2007 was $.18,
respectively. The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the following weighted
average assumptions used for grants:

                                                    Nine Months Ended
                                                       November 30,
                                                 ------------------------
                                                    2008          2007
                                                 ----------    ----------
Weighted average expected life in years                   3             4
Dividends per share                                    0.06          0.04
Volatility                                              7.0%          6.0%
Risk-free interest rate                                 4.3%          4.9%

                                       12
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 November 30, 2008, 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.

                                       13
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


NOTE C - Income Taxes:

1. Federal and State deferred tax assets include:

                                                November 30,      February 29,
                                                    2008              2008
                                               --------------    --------------
       Temporary differences:
            Accelerated amortization           $       11,877             2,696
            Deferred compensation                      85,586           101,405
                Stock-based compensation               16,054            16,054
                                               --------------    --------------
                Total                                 113,517           120,155

       Current portion                                 18,770            25,182
                                               --------------    --------------

       Non-current portion                     $       94,747            94,973
                                               ==============    ==============

2. Income tax expense:

                                                        November 30,
                                              ---------------------------------
                                                    2008              2008
                                               --------------    --------------
       Current:
            Federal                            $      142,776           262,000
            State                                      37,607            68,960
                                               --------------    --------------

                Total current                         180,383           330,960
                                               --------------    --------------

       Deferred:
            Federal                                     4,179            18,581
            State                                       2,459             3,173
                                               --------------    --------------

                Total deferred                          6,638            21,754
                                               --------------    --------------

                    Total                      $      187,021           352,714
                                               ==============    ==============

                                       14
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE D - Treasury Stock:

Consists of 948,645 shares at a net cost of $351,082, as of November 30, 2008
and February 29, 2008, respectively.

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 nine months ended November 30, 2008, approximately 31.0%
of sales were to three customers. During the nine months ended November 30,
2007, approximately 37.9% of sales were to three customers, two of these
customers, located in the Eastern United States, accounted for 30.0% 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 $342,611 and
$295,584 were included in cost of sales for the nine months ended November 30,
2008 and 2007, respectively. Expenditures for fiscal year 2009 are projected to
remain at approximately the same level as in fiscal 2008.

NOTE H - Employee Benefits:

Simplified Employee Pension Plan - Effective June 1, 1994, the Company provides
a SAR/SEP plan to its employees as a retirement and income tax reduction
facility. Full time employees are eligible to participate immediately. Employees
may make pre-tax and after-tax contributions subject to Internal Revenue Service
limitations. Company contributions range from three to five percent after
completion of one year of service. Employer contributions totaled $40,905 and
$41,116 for the nine months ended November 30, 2008 and 2007, respectively.

                                       15
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 November
30, 2008, 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
November 30, 2008, and the changes during the nine months ended November 30,
2008 is presented below:

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

Balance - November 30, 2008               316,000           $.50
                                          =======

Exercisable at November 30, 2008          316,000
                                          =======


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

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

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

                                       16
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE H - Employee Benefits (continued):

Stock Option Plans - The following table summarizes information about fixed
stock options outstanding at November 30, 2008:
<TABLE>
<CAPTION>

                Outstanding Options                             Exercisable Options
 ----------------------------------------------------     -------------------------------
                       Number        Weighted-Average       Number
    Range of        Outstanding         Remaining         Exercisable     Weighted-Average
 Exercise Price     at 11/30/08      Contractual Life     at 11/30/08      Exercise Price
 --------------     ------------     ----------------     ------------     --------------
<S>                   <C>                  <C>              <C>                 <C>
     $.41             116,000              5.2              116,000             .41
      .51             100,000              0.9              100,000             .51
      .54             200,000              1.6              200,000             .54
</TABLE>

Stock Option and Stock-Based Compensation 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). Under
the 2008 Plan, we 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 we 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, us and our subsidiaries (including key
employees of companies that develop products that we intend to publish or
distribute) 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.

         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.

                                       17
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 nine months
ended November 30, 2008.

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:

                                                      Nine Months Ended
                                                         November 30,
                                                 ----------------------------
                                                     2008            2007
                                                 ------------    ------------
         United States                           $  1,724,971       2,231,348
         Asia                                         435,500         371,177
         Europe                                       336,445         158,393
         Other nations                                    600             250
                                                 ------------    ------------

         Total                                   $  2,497,516       2,761,168
                                                 ------------    ------------

         Two customers, located in the United States and Asia, accounted for
more than 10% of revenues from continuing operations. These customers accounted
for 21.7% of sales of infrared dies.

         Long-lived assets include net plant, property and equipment. The
Company had long-lived assets of $850,858 and $854,724 located in the United
States at November 30, 2008 and February 29, 2008, respectively.

                                       18
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE J - Accrued Expenses:

         Accrued expenses consisted of the following as of November 30, 2008 and
February 29, 2008, respectively:

                                               November 30,      February 29,
                                                   2008              2008
                                              --------------    --------------
         Commissions                          $       14,622                --
         Purchases                                        --            12,330
         Salaries                                     19,880                --
         Employment agreement                        199,801           225,000
         Rent                                          8,145                --
         Professional fees                             6,000            28,000
         Pension contribution                         10,900             5,425
                                              --------------    --------------

           Total accrued expenses             $      259,348           270,755
                                              --------------    --------------

NOTE K - Inventories:

                                               November 30,      February 29,
                                                   2008              2008
                                              --------------    --------------
         Raw materials and supplies           $      183,697           123,286
         Work in process                             122,452            45,379
         Finished goods                              409,289           473,864
                                              --------------    --------------

           Total                              $      715,438           642,529
                                              ==============    ==============

                                       19
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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:
<TABLE>
<CAPTION>

                                         Three Months Ended           Nine Months Ended
                                             November 30,                November 30,
                                      -------------------------   -------------------------
                                          2008          2007          2008          2007
                                      -----------   -----------   -----------   -----------
<S>                                   <C>               <C>       <C>               <C>
Basic Earnings Per Common Share:

Net income                            $    74,981       217,914   $   330,820       567,554
                                      -----------   -----------   -----------   -----------
Average common shares
 outstanding                           12,066,355    11,966,355    11,999,446    11,966,355
                                      -----------   -----------   -----------   -----------
Basic earnings per
 common share                         $      0.01          0.02   $      0.03          0.05
                                      -----------   -----------   -----------   -----------
Diluted Earnings Per Common Share:

Net income                            $    74,981       217,914   $   330,820       567,554
                                      -----------   -----------   -----------   -----------
Average common shares
 outstanding                           12,066,355    11,966,355    11,999,446    11,966,355

Common shares issuable with respect
 to options issued to employees
 with a dilutive effect                    40,436        37,069        40,436        37,069

Total diluted common shares
 outstanding                           12,106,791    12,003,424    12,039,882    12,003,424
                                      ===========   ===========   ===========   ===========
Diluted earnings per
 common share                         $      0.01          0.02   $      0.03          0.05
                                      -----------   -----------   -----------   -----------
</TABLE>

                                       20
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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
$73,305 for the nine months ended November 30, 2008 and 2007, respectively.

Future minimum payments for the current option period:

           Fiscal Years Ending February:
           -----------------------------
                       2009                                     $24,435
                       2010                                      97,740
                       2011                                      65,160


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

         In connection with this agreement, compensation in the amount of $5,031
and $5,171 was charged to selling, general and administrative expenses for the
nine months ended November 30, 2008 and 2007, 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.

                                       21
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 November 30, 2008 and 2007 was $199,801 and $207,088, 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.

                                       22
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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>

                                                          As of November 30, 2008
                                       ------------------------------------------------------------
                                         Level 1          Level 2        Level 3        Fair Value
                                       ------------    ------------    ------------    ------------
<S>                                    <C>              <C>             <C>          <C>
Assets:
-------

Cash and cash equivalents              $  1,624,467              --              --    $  1,624,467

Other assets:
     Cash value - life insurance            209,972              --              --         209,972
                                       ------------    ------------    ------------    ------------

Total assets at fair value             $  1,834,439              --              --    $  1,834,439
                                       ============    ============    ============    ============
Liabilities:
------------

Deferred compensation                  $         --         251,712              --    $    251,712
                                       ============    ============    ============    ============
</TABLE>

                                       23
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 to be payable
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.

                                       24