SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, DC 20549

                          FORM 10-QSB

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

         For the quarterly period ended August 31, 2007

     [ ] TRANSITION REPORT UNDER 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 Small Business Issuer as Specified in its Charter)

New Jersey                                              22-2547226
(State or Other Jurisdiction                      (I.R.S. Employer
of Incorporation or                                 Identification
Organization)                                              Number)

                      358-364 Adams Street
                    Newark, New Jersey 07105
            (Address of Principal Executive Offices)

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

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

                  Yes   [  X   ] No   [     ]

Indicate by check mark whether the Issuer 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  Issuers
classes of common equity, as of the latest practicable date:

Common, no par value per share: 11,966,355 outstanding as of
October 10, 2007

<PAGE>


                          EPOLIN, INC.

                        TABLE OF CONTENTS

                                                         Page
PART I - FINANCIAL INFORMATION

Item 1.        Financial Statements.                      3
Item 2.        Management's Discussion
               and Analysis or Plan of Operation.         3
Item 3.        Controls and Procedures.                   9

PART II - OTHER INFORMATION

Item 1.        Legal Proceedings.                         10
Item 2.        Unregistered Sales of Equity Securities
               and Use of Proceeds.                       10
Item 3.        Default upon Senior Securities.            10
Item 4.        Submission of Matters to a Vote
               of Security Holders.                       10
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 or Plan of
          Operation.

     The following discussion should be read in conjunction with
the Financial Statements included 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 28, 2007.  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 six months
ended August 31, 2007, approximately 40.1% of sales were to three
customers.  Two of these customers, located in the Eastern United
States, accounted for 33.0% of sales.  During the six months
ended August 31, 2006, approximately 40.8% of sales were to four
customers.  Two of these customers, located in the Eastern United
States, accounted for 26.9% of sales.  The loss of one or more
key customers could have a material adverse effect on the
Company.

Results of Operations

     The following tables set forth operations data for the three
months ended August 31, 2007 and 2006 and six months ended August
31, 2007 and 2006.

<PAGE>

                         Three Months Ended August 31,

                               2007          2006          % change

Sales                      $1,092,558     $950,911          14.9%

Gross profit                  644,658      517,784          24.5%

Gross profit percentage          59.0%        54.5%          4.5%

Selling, general &
administrative                343,000      352,379          -2.7%

Operating income              301,658      165,405          82.4%
Other Income                   21,244       29,424         -27.8%

Income before taxes           322,902      194,829          65.7%

Income taxes                  126,038       73,780          70.8%

Net income (after taxes)   $  196,864     $121,049          62.6%



                         Six Months Ended August 31,

                               2007          2006          % change

Sales                      $1,934,559   $2,044,981          -5.4%

Gross profit                1,158,003    1,172,936          -1.3%

Gross profit percentage          59.8%        57.4%          2.4%

Selling, general &
administrative                638,999      648,495          -1.5%

Operating income              519,004      524,441          -1.0%
Other Income                   36,184       39,466          -8.3%

Income before taxes           555,188      563,907          -1.5%

Income taxes                  205,548      216,959          -5.3%

Net income (after taxes)  $   349,640    $ 346,948           0.8%


Sales

     For the three months ended August 31, 2007, sales were
$1,093,000 as compared to $951,000 for the three months ended
August 31, 2006, an increase of $142,000 or 14.9%.  Sales
decreased to $1,935,000 for the six months ended August 31, 2007
from $2,045,000 for the six months ended August 31, 2006, a
decrease of $110,000 or 5.4%.  Sales in the eye protection
market, which represent our oldest and traditional market,
increased by $26,000 and $122,000 for the  three and six months
ended August 31, 2007 compared to the prior years periods.  Sales
in the ink and coating market increased by $140,000 for the three
months ended August 31, 2007 compared to the three months ended
August 31, 2006, although for the six month period ended August
31, 2007, sales decreased by $164,000 compared to the prior year
six month period.  Sales in the light management market were
relatively stagnant from period to period.  Sales increased in
this market by $5,000 for the three month period ended August 31,
2007 and decreased by $29,000 for the six month period ended
August 31, 2007 compared to the prior year.  The decrease in
sales in the ink and coating market

<PAGE>


for the six months ended
August 31, 2007 was primarily due to the major decline in sales
of security inks for the credit card market which had been a key
area of our growth prior to the early part of fiscal 2007.
Nevertheless, we did begin to see a turnaround in this market in
the second quarter of fiscal 2008 which resulted in the $140,000
increase in this market for the three months ended August 31,
2007 compared to the prior year.

     Sales overseas decreased in Asia and Europe for the six
months ended August 31, 2007 while sales slightly increased in
the United States for such six month period compared to the prior
year.   For the six months ended August 31, 2007, sales in Asia
decreased to $257,000 from $352,000 for the three months ended
August 31, 2006, and, in Europe, sales decreased to $112,000 for
the six months ended August 31, 2007 from $139,000 for the prior
year.  In the United States, sales increased to $1,565,000 for
the six months ended August 31, 2007 from $1,548,000 for the six
months ended August 31, 2006.

Gross Profit

     Gross profit, defined as sales less cost of sales, was
$645,000 or 59.0% of sales for the three months ended August 31,
2007 compared to $518,000 or 54.5% of sales for the three months
ended August 31, 2006.  For the six months ended August 31, 2007,
gross profit was $1,158,000 or 59.8% of sales compared to
$1,173,000 or 57.4% of sales for the six months ended August 31,
2006.  In terms of absolute dollars, gross profit increased
$127,000 for the three months ended August 31, 2007 compared to
the prior year period, and decreased $15,000 for the six months
ended August 31, 2007 compared to the prior year period.

     Cost of sales was $448,000 for the three months ended August
31, 2007 which represented 41.0% of sales compared to $433,000
for the three months ended August 31, 2006 which represented
45.5% of sales.  For the six months ended August 31, 2007, cost
of sales was $777,000 which represented 40.2% of sales, compared
to $872,000 for the six months ended August 31, 2006 which
represented 42.6% of sales.  Total cost of materials decreased
$19,000 in the six months ended August 31, 2007 compared to the
prior year period.  Total factory overhead also decreased by
$76,000 in the six months ended August 31, 2007 compared to the
prior year period, primarily due to decreases in research and
development salaries and decreases in applied factory overhead.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses, although
relatively unchanged, decreased to $343,000 or 31.4% of sales,
for the three months ended August 31, 2007 from $352,000 or 37.1%
of sales for the three months ended August 31, 2006, a decrease
of $9,000.  Selling, general and administrative expenses
decreased to $639,000 or 33.0% for the six months ended August
31, 2007 from $648,000 or 31.7% of sales for the six months ended
August 31, 2006, a decrease of $9,000.  Such minor decrease in
absolute dollars in selling, general and administrative expenses
for the six months ended August 31, 2007 compared to the prior
year period was primarily due to decreases in officer salaries
and employee benefits offset by increases in applied factory
overhead and administrative salaries.

Operating Income

     Operating income in terms of absolute dollars, increased to
$302,000 for the three months ended August 31, 2007 from $165,000
for the prior year period, an increase of $137,000, although
operating income for the six months ended August 31, 2007
decreased to $519,000 from $524,000 for the prior year period, a
decrease of $5,000.  Such change in the three and six month
periods was primarily due to the increase in sales in the second
quarter of fiscal 2008 compared to the first quarter of fiscal
2008.  As a percentage of sales, operating income increased to
27.6% of sales for the three months ended August 31, 2007 from
17.4% of sales for the three months ended August 31, 2006.  For
the six months ended August 31, 2007, operating income increased
as a percentage of sales to 26.9% from 25.7% for the six months
ended August 31, 2006.

Other Income

     Total other income for the three months ended August 31,
2007 was $21,000 as compared to $29,000 for the three months
ended August 31, 2006.  Total other income for the six months
ended August 31, 2007 was $36,000 as compared to $39,000 for the
six months ended August 31, 2006.  We realized rental income of
$9,000 and $9,000 for the three and six months ended August 31,
2007 compared to rental income of $7,500 and $12,000 for the
comparable periods of 2006.  Our interest income was $12,000 and
$27,000 for the three and six months ended August 31, 2007

<PAGE>

compared to $22,000 and $27,000 for the prior year periods.

Net Income

     During the three months ended August 31, 2007, we reported
income before taxes of $323,000 as compared to income before
taxes of $195,000 for the three months ended August 31, 2006.
During the six months ended August 31, 2007, we reported income
before taxes of $555,000 as compared to income before taxes of
$564,000 for the six months ended August 31, 2006.  Income taxes
were $126,000 and $206,000 for the three and six months ended
August 31, 2007 compared to income taxes of $74,000 and $217,000
for the three and six months ended August 31, 2006.  The changes
in income taxes were generally attributed to changes from period
to period in sales and expenses.  Net income after taxes was
$197,000 or $0.02 per share for the three months ended August 31,
2007 as compared to net income after taxes of $121,000 or $0.01
per share for the three months ended August 31, 2006.   For the
six months ended August 31, 2007, net income after taxes was
$350,000 or $0.03 per share as compared to net income after taxes
of $347,000 or $0.03 per share for the six months ended August
31, 2006.

     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.  Although sales have
grown in recent years, we experienced a decrease in sales in 2007
compared to the prior year (a decrease of $91,000), primarily due
to the downturn we experienced in the third and fourth quarters
of fiscal 2007.  Such decrease in sales continued into the first
quarter of fiscal 2008.   Nevertheless, sales improved in the
second quarter of fiscal 2008 which resulted in the $76,000
increase in net income for the three months ended August 31, 2007
compared to the three months ended August 31, 2006.

Operations Outlook

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

     With regard to the net income we have achieved in recent
years, we recognize that net income has not increased like our
revenues have increased.   When we began to reassess our
direction in fiscal 2005, we placed an emphasis on sales growth
which was achieved, although as mentioned above, it has now taken
a downturn.  We recognize that we still have to gain more control
over our costs and expenses so that we can improve our overall
results.  This is something we are currently undertaking and we
have already instituted certain measures in this regard.  Some of
these measures have already had a positive effect such as the
overall decrease in selling, general and administrative for
fiscal 2007 compared to fiscal 2006.

<PAGE>

Liquidity and Capital Resources

     Our primary source of funds is cash flow from operations in
the normal course of selling products.  On August 31, 2007, we
had working capital of $2,842,000, a debt to equity ratio of 0.14
to 1, and stockholders equity of $3,773,000 compared to working
capital of $2,717,000, a debt to equity ratio of 0.14 to 1, and
stockholders equity of $3,616,000 on August 31, 2006.  On August
31, 2007, we had $1,548,000 in cash and cash equivalents, total
assets of $4,301,000 and total liabilities of $527,000, compared
to $1,667,000 in cash and cash equivalents, total assets of
$4,131,000 and total liabilities of $514,000 on August 31, 2006.

     Net cash provided by operating activities for the six months
ended August 31, 2007 was $82,000 which was primarily the result
of net income of $350,000, plus decreases in prepaid expenses of
$11,000 and inventories of $15,000, and increases in taxes
payable of $27,000, offset by increases in accounts receivable of
$298,000 and decreases in accrued expenses of 50,000 and accounts
payable of $13,000.   Net cash provided by operating activities
for the six months ended August 31, 2006 was $441,000 which was
primarily the result of net income of $347,000, plus decreases in
accounts receivable of $58,000, inventories of $27,000 and
prepaid expenses of $44,000, offset by a decrease in accrued
expenses of $151,000.  Net cash used by investing activities for
the six months ended August 31, 2007 was $46,000 for the six
months ended August 31, 2007 due to equipment purchases of
$81,000 offset by a decrease in cash value of a life insurance
policy of $35,000, while net cash used by investing activities
was $55,000 for the six months ended August 31, 2006 due to
equipment purchases of $48,000 and an increase in cash value of a
life insurance policy of $7,000.   For the six months ended
August 31, 2007, net cash used by financing activities was
$239,000 and was $235,000 for the six months ended August 31,
2006 which was primarily due to the payment of dividends which
occurred in both the first three months of fiscal 2008 and the
first three months of fiscal 2007.

     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
our contemplated cash requirements for more than the next 12
months.  Our contemplated cash requirements for the balance of
fiscal 2008 and beyond will depend primarily upon level of sales
of our products, inventory levels, product development, sales and
marketing expenditures and capital expenditures.

     Inflation has not significantly impacted our operations.

Significant Accounting Policies

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

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

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

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

<PAGE>

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

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

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

Other Information

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

     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.  During the six
months ended August 31, 2007, no repurchases were made under this
program.  To date, a total of 331,500 shares have been
repurchased at a cumulative cost of $195,766.

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

Off-Balance Sheet Arrangements

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

<PAGE>


Item 3.   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 August 31, 2007, these disclosure controls
and procedures were effective to ensure that all information
required to  be disclosed by us in the reports that we file or
submit under the Exchange Act is: (i) recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rule and forms; and (ii) accumulated and
communicated to our management, including our Principal Executive
Officer and Principal Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.

     There have been no 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.

<PAGE>

                   PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

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


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

     None.


Item 3.  Defaults Upon Senior Securities.

     None.


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

     On August 16, 2007,  an  annual  meeting   of stockholders
was held to elect five Directors  to  serve as the Board of
Directors of the Company until the next Annual   Meeting  of
Stockholders  and   until   their successors shall be elected and
shall qualify.  At such meeting, Murray S. Cohen, James
Ivchenko,  Morris  Dunkel, James R.  Torpey, Jr. and Herve A.
Meillat, each an incumbent director, were duly elected as
directors of the Company.  Murray S. Cohen received 8,355,650
affirmative votes and 35,300 negative votes; James Ivchenko
received 8,380,050 affirmative votes and 10,900 negative votes;
Morris Dunkel received 8,378,950 affirmative votes and 12,000
negative votes; James  R. Torpey, Jr. received 8,316,450
affirmative votes and 74,500 negative votes; and, Herve A.
Meillat received 8,323,350 affirmative votes and 67,600 negative
votes.


Item 5.  Other Information.

      None.


Item 6.  Exhibits.

          31.1 Certification of Principal 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

     In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   EPOLIN, INC.
                                   (Registrant)



Dated: October 15, 2007            By: /s/ Greg Amato
                                   Greg Amato,
                                   Chief Executive Officer



Dated: October 15, 2007            By: /s/ James Ivchenko
                                   James Ivchenko,
                                   President
                                   (Principal Financial Officer)


<PAGE>








                           EPOLIN, INC. AND SUBSIDIARY

                              FINANCIAL STATEMENTS

                    SIX MONTHS ENDED AUGUST 31, 2007 AND 2006







<PAGE>

                                    CONTENTS

                                                                            Page
                                                                            ----

Accountant's Review Report                                                  1

Consolidated Financial Statements:

    Consolidated Balance Sheets                                           2 - 3

    Consolidated Statements of Income                                     4 - 5

    Consolidated Statements of Stockholders' Equity                         6

    Consolidated Statements of Cash Flows                                   7

Notes to Consolidated Financial Statements                                8 - 21



<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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


         We have reviewed the accompanying Consolidated Balance Sheets of Epolin
Inc. and Subsidiary as of August 31, 2007 and 2006 and the related Consolidated
Statements of Income, Stockholders' Equity, and Cash Flows for the six-month
periods then ended. These interim financial statements are the responsibility of
the Company's management.

         We conducted our review in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

         Based on our review, we are not aware of any material modifications
that should be made to the accompanying interim financial statements for them to
be in conformity with U.S. generally accepted accounting principles.






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


September 27, 2007




                                       1
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                     August 31,
                                                           ----------------------------
                                                               2007            2006
                                                           ------------    ------------
<S>                                                        <C>                <C>
Current assets:
  Cash and cash equivalents                                $  1,547,558       1,666,834
  Accounts receivable                                           845,179         637,607
  Inventories                                                   636,198         621,112
  Prepaid expenses                                               66,559          19,037
  Prepaid taxes                                                     527              --
  Deferred tax assets-current portion                            14,347           6,358
                                                           ------------    ------------

    Total current assets                                      3,110,368       2,950,948
                                                           ------------    ------------
Plant, property and equipment - at cost:
  Land                                                           81,000          81,000
  Building and improvements                                     710,758         707,561
  Laboratory equipment                                          280,368         266,263
  Furniture and office equipment                                234,105         117,491
  Leasehold improvements                                        456,790         449,190
                                                           ------------    ------------

    Total                                                     1,763,021       1,621,505

  Less:  Accumulated depreciation and amortization              901,306         822,945
                                                           ------------    ------------

    Net plant, property and equipment                           861,715         798,560
                                                           ------------    ------------
Other assets:
  Deferred tax assets-non current portion                       135,988         159,479
  Cash value - life insurance policy                            192,664         221,557
                                                           ------------    ------------

    Total other assets                                          328,652         381,036
                                                           ------------    ------------

      Total                                                $  4,300,735       4,130,544
                                                           ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        2
<PAGE>
<TABLE>
<CAPTION>

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

                         LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                              August 31,
                                                                     ----------------------------
                                                                         2007            2006
                                                                     ------------    ------------
<S>                                                                  <C>                   <C>
Current liabilities:
  Accounts payable                                                   $     38,431          30,767
  Accrued expenses                                                        194,691         156,460
  Taxes payable:
    Payroll                                                                 1,889           1,653
    Income                                                                 33,294          45,130
                                                                     ------------    ------------

       Total current liabilities                                          268,305         234,010


Other liabilities - Deferred compensation                                 259,035         280,178
                                                                     ------------    ------------

       Total liabilities                                                  527,340         514,188
                                                                     ------------    ------------
Commitments and Contingencies

Stockholders' equity:
  Preferred stock, $15.513 par value; 940,000 shares authorized;
    none issued
  Preferred stock, series A convertible non-cumulative,
    $2.50 par value; redemption price and liquidation preference;
    60,000 shares authorized; 5,478 shares issued and redeemed
  Common stock, no par value; 20,000,000 shares authorized;
    12,915,000 and 12,890,000 shares issued, and 11,966,355
    shares outstanding at 2007 and 2006, respectively                   2,364,693       2,357,193
    Additional paid-in capital                                             73,486          49,913
    Retained earnings                                                   1,686,298       1,539,332
                                                                     ------------    ------------

       Total                                                            4,124,477       3,946,438
    Less: Treasury stock - at cost                                        351,082         330,082
                                                                     ------------    ------------

       Total stockholders' equity                                       3,773,395       3,616,356
                                                                     ------------    ------------

         Total                                                       $  4,300,735       4,130,544
                                                                     ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                    SIX MONTHS ENDED AUGUST 31, 2007 AND 2006


                                                               2007            2006
                                                           ------------    ------------
<S>                                                        <C>                <C>
Sales                                                      $  1,934,559       2,044,981
                                                           ------------    ------------

Cost of sales and expenses:
  Cost of sales                                                 776,556         872,045
  Selling, general and administrative                           638,999         648,495
                                                           ------------    ------------

    Total                                                     1,415,555       1,520,540
                                                           ------------    ------------

Operating income                                                519,004         524,441
                                                           ------------    ------------
Other income:
  Rental income                                                   9,000          12,000
  Interest                                                       27,184          27,466
                                                           ------------    ------------

    Total                                                        36,184          39,466
                                                           ------------    ------------

Income before taxes                                             555,188         563,907

Income taxes                                                    205,548         216,959
                                                           ------------    ------------
Net income                                                 $    349,640         346,948
                                                           ============    ============

Per share data:
  Basic earnings per common share                          $       0.03            0.03
                                                           ============    ============
  Fully diluted earnings per common share                  $       0.03            0.03
                                                           ============    ============
  Weighted average number of common shares outstanding       11,966,355      11,966,355
                                                           ============    ============
  Fully diluted number of common shares outstanding          12,003,424      12,053,560
                                                           ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        4
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                   THREE MONTHS ENDED AUGUST 31, 2007 AND 2006

                                                               2007            2006
                                                           ------------    ------------
<S>                                                        <C>                  <C>
Sales                                                      $  1,092,558         950,911
                                                           ------------    ------------
Cost of sales and expenses:
  Cost of sales                                                 447,900         433,127
  Selling, general and administrative                           343,000         352,379
                                                           ------------    ------------

    Total                                                       790,900         785,506
                                                           ------------    ------------

Operating income                                                301,658         165,405
                                                           ------------    ------------
Other income:
  Rental income                                                   9,000           7,500
  Interest                                                       12,244          21,924
                                                           ------------    ------------

    Total                                                        21,244          29,424
                                                           ------------    ------------

Income before taxes                                             322,902         194,829

Income taxes                                                    126,038          73,780
                                                           ------------    ------------

Net income                                                 $    196,864         121,049
                                                           ============    ============
Per share data:
  Basic earnings per common share                          $       0.02            0.01
                                                           ============    ============
  Fully diluted earnings per common share                  $       0.02            0.01
                                                           ============    ============
  Weighted average number of common shares outstanding       11,966,355      11,966,355
                                                           ============    ============
  Fully diluted number of common shares outstanding          12,003,424      12,053,560
                                                           ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        5
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    SIX MONTHS ENDED AUGUST 31, 2007 AND 2006




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

Dividends paid                          --           --           --     (239,327)           --           --      (239,327)

Common stock issued for
 stock option                       31,000        8,710       33,000           --            --           --        41,710

Valuation of options expensed           --           --       10,427           --            --           --        10,427

Treasury stock purchased                --           --           --           --         5,000       (4,550)       (4,550)

Net income                              --           --           --      346,948            --           --       346,948
                                ----------   ----------   ----------   ----------   -----------   ----------    ----------

Balance - August 31, 2006       12,890,000   $2,357,193       49,913    1,539,332       923,645     (330,082)    3,616,356
                                ==========   ==========   ==========   ==========   ===========   ==========    ==========



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

Dividends paid                          --           --           --     (239,327)           --           --      (239,327)

Valuation of options expensed           --           --       11,375           --            --           --        11,375

Net income                              --           --           --      349,640            --           --       349,640
                                ----------   ----------   ----------   ----------   -----------   ----------    ----------

Balance - August 31, 2007       12,915,000   $2,364,693       73,486    1,686,298       948,645     (351,082)    3,773,395
                                ==========   ==========   ==========   ==========   ===========   ==========    ==========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        6
<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    SIX MONTHS ENDED AUGUST 31, 2007 AND 2006

                                                                    2007            2006
                                                                ------------    ------------
<S>                                                             <C>                  <C>
Cash flows from operating activities:
  Net income                                                    $    349,640         346,948
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                    42,455          28,798
     Deferred tax expense                                             12,378          10,485
     Stock based compensation                                         11,375          43,427
     Obligation under deferred compensation agreement                (26,829)        (26,314)
  (Increase) decrease in:
     Accounts receivable                                            (298,227)         58,044
     Inventories                                                      15,450          26,761
     Prepaid expenses                                                 11,208          44,035
     Prepaid taxes                                                     1,393           1,599
  Increase (decrease) in:
     Accounts payable                                                (13,351)         18,956
     Accrued expenses                                                (50,214)       (150,595)
     Taxes payable                                                    26,758          39,276
                                                                ------------    ------------

        Net cash provided by operating activities                     82,036         441,420
                                                                ------------    ------------
Cash flows from investing activities:
  (Increase) decrease in cash value - life insurance policy           34,594          (6,646)
  Payments for equipment                                             (81,091)        (48,152)
                                                                ------------    ------------

        Net cash used by investing activities                        (46,497)        (54,798)
                                                                ------------    ------------
Cash flows from financing activities:
  Issuance of common stock                                                --           8,710
  Treasury stock purchased                                                --          (4,550)
  Dividends paid                                                    (239,327)       (239,327)
                                                                ------------    ------------
        Net cash used by financing activities                       (239,327)       (235,167)
                                                                ------------    ------------

Increase (decrease) in cash                                         (203,788)        151,455

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

  Ending                                                        $  1,547,558       1,666,834
                                                                ============    ============
Supplemental information:
  Income taxes paid                                             $    166,482         166,955
                                                                ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        7
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006


Note A - Organization:

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

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

Note B - Summary of Significant Accounting Policies:

Basis of Presentation - The 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 28, 2007. 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 six-month interim period ended August
31, 2007 are not necessarily indicative of the results of operations for the
fiscal year ending February 28, 2008.

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 57.9% of the
Company's trade receivables at August 31, 2007.

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
                            AUGUST 31, 2007 AND 2006

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

Principles of Consolidation - The accompanying Consolidated Financial Statements
include the accounts of the Company and Subsidiary. Inter-company transactions
and balances have been eliminated in consolidation. Condensed consolidating
financial statements as of August 31, 2007 and for the six months then ended
are:
<TABLE>
<CAPTION>

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                          Epolin           Epolin
                                           Inc.         Holding, Corp.    Eliminations     Consolidated
                                       -------------    -------------    -------------    -------------
<S>                                     <C>                 <C>             <C>            <C>
Current assets                         $   2,861,158          249,210               --        3,110,368
Non-current assets                         1,439,577          639,075         (888,285)       1,190,367
                                       -------------    -------------    -------------    -------------
     Total                             $   4,300,735          888,285         (888,285)       4,300,735
                                       =============    =============    =============    =============

  Total liabilities                    $     527,340           24,435          (24,435)         527,340
                                       -------------    -------------    -------------    -------------

Stockholders' equity:
  Common stock                             2,364,693               --               --        2,364,693
  Additional paid-in capital                  73,486               --               --           73,486
  Retained earnings                        1,686,298          863,850         (863,850)       1,686,298
  Treasury stock                            (351,082)              --               --         (351,082)
                                       -------------    -------------    -------------    -------------

  Total stockholders' equity               3,773,395          863,850         (863,850)       3,773,395
                                       -------------    -------------    -------------    -------------

     Total                             $   4,300,735          888,285         (888,285)       4,300,735
                                       =============    =============    =============    =============
<CAPTION>

                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                          Epolin           Epolin
                                           Inc.         Holding, Corp.    Eliminations     Consolidated
                                       -------------    -------------    -------------    -------------
<S>                                     <C>                 <C>             <C>            <C>
Sales                                  $   1,934,559               --               --        1,934,559
Other revenue- rental income                      --           57,870          (48,870)           9,000
                                       -------------    -------------    -------------    -------------
     Total                                 1,934,559           57,870          (48,870)       1,943,559
                                       -------------    -------------    -------------    -------------

Cost of sales                                776,556               --               --          776,556
Selling, general and administrative          674,409           13,460          (48,870)         638,999
                                       -------------    -------------    -------------    -------------

     Total                                 1,450,965           13,460          (48,870)       1,415,555
                                       -------------    -------------    -------------    -------------

Operating income                             483,594           44,410               --          528,004

Other income - interest                       20,133            7,051               --           27,184
                                       -------------    -------------    -------------    -------------
Income before taxes                          503,727           51,461               --          555,188

Income taxes                                 202,378            3,170               --          205,548
                                       -------------    -------------    -------------    -------------
Net income                             $     301,349           48,291               --          349,640
                                       =============    =============    =============    =============
</TABLE>

                                        9
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006


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

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

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

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

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

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

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

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

         Depreciation and amortization expense totaled $42,455 and $28,798 for
the six months ended August 31, 2007 and 2006, 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
                            AUGUST 31, 2007 AND 2006

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 $20,516 through August 31, 2007
and $12,700 through August 31, 2006, 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 $4,278 and $7,006 for the
six months ended August 31, 2007 and 2006, respectively.

                                       11
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

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
August 31, 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 six and three months ended August 31, 2007 and 2006, the
Company recognized stock-based compensation expenses of $11,375 and $10,427 and
$5,687 and $5,213, 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 six months ended August 31, 2007 and 2006 was $.21 and
$.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:

        Six months ended August 31,                      2007         2006
                                                      ----------   ----------
        Weighted average expected life in years                4            3
        Dividends per share                                 0.04         0.02
        Volatility                                           6.0%         6.0%
        Risk-free interest rate                              4.9%         4.5%


                                       12
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006


Note C - Inventories:
                                                             August 31,
                                                      -----------------------
                                                         2007          2006
                                                      ----------   ----------
         Raw materials and supplies                   $   63,255       60,192
         Work in process                                 200,189      172,615
         Finished goods                                  372,754      388,305
                                                      ----------   ----------

         Total                                        $  636,198      621,112
                                                      ==========   ==========

Note D - Income Taxes:

1.  Federal and State deferred tax assets include:
                                                         2007         2006
                                                      ----------   ----------
         Temporary differences:
           Accelerated amortization                   $   22,108       40,747
           Deferred compensation                         113,608      120,477
           Stock based compensation                       14,619        4,613
                                                      ----------   ----------
              Total                                      150,335      165,837

         Current portion                                  14,347        6,358
                                                      ----------   ----------
         Non-current portion                          $  135,988      159,479
                                                      ==========   ==========

2. Income tax expense:
                                                         2007         2006
                                                      ----------   ----------
         Current:
           Federal                                    $  150,600      163,110
           State                                          42,570       43,364
                                                      ----------   ----------

              Total current                              193,170      206,474
                                                      ----------   ----------
         Deferred:
           Federal                                        10,171       10,315
           State                                           2,207          170
                                                      ----------   ----------

              Total deferred                              12,378       10,485
                                                      ----------   ----------

                Total                                 $  205,548      216,959
                                                      ==========   ==========

                                       13
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

Note E - Treasury Stock:

         Consists of 948,645 shares at a net cost of $351,082 and 923,645 shares
at a net cost of , as of August 31, 2007 and 2006, respectively.

         The Company purchased 5,000 shares during the six months ended August
31, 2006.

Note F - 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 six months ended August 31, 2007, approximately 40.1% of
sales were to three customers. Two of these customers, located in the Eastern
United States, accounted for 33.0% of sales. During the six months ended August
31, 2006, approximately 40.8% of sales were to four customers, two of these
customers, located in the Eastern United States, accounted for 26.9% of sales.

Note G - Rental Income Under Sublease:

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

Note H - 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 $197,660 and
$239,194 were included in cost of sales for the six months ended August 31, 2007
and 2006, respectively. Expenditures for fiscal year 2008 are projected to
remain at approximately the same level as in fiscal 2007.

Note I - 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 $24,782 and
$24,507 for the six months ended August 31, 2007 and 2006, respectively.

                                       14
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

Note I - Employee Benefits (continued):

Stock Option Plan - The Company previously adopted The 1986 Stock Option Plan.
As of April 1996, under the terms of the Plan, options may no longer be granted.
On December 1, 1995, options to acquire up to 490,000 shares of the Company's
common stock were granted. Options exercised for all prior years totaled
455,000. Options cancelled for all prior years totaled 35,000. There were no
outstanding options as of August 31, 2007.

         The Company adopted the 1998 Stock Option Plan on December 1, 1998.
Under the terms of the plan, the Company reserved 750,000 shares of common stock
for issuance pursuant to the exercise of options to be granted under the Plan,
which do not meet the requirements of Section 422 of the Code. On September 15,
2001, the Board of Directors increased the reserve to 1,500,000. Options granted
expire five or ten years after the date granted and are subject to various
vesting periods as follows: (1) none exercisable prior to the first anniversary
of the date of grant, and (2) certain options will become exercisable as to 50%
of the shares underlying the option on each of the first and second
anniversaries of the date granted (3) certain options will become exercisable as
to 50% of the shares underlying the option on each of the second and fourth
anniversaries of the date granted. Options exercised through August 31, 2007
totaled 686,000. Options cancelled or expired for all years totaled 240,000. All
cancelled options are available for future grants.

         A summary of the status of the Company's 1998 stock option plan as of
August 31, 2007, and the changes during the six months ended August 31, 2007 is
presented below:

                                                                Weighted-Average
Fixed Options:                                       Shares      Exercise Price
-------------                                      --------      ---------------
Balance - March 1, 2006                             457,000          $.42
     Granted                                             --            --
     Cancelled and expired                          (85,000)          .25
     Exercised                                      (56,000)          .28
                                                   --------
Balance - February 28, 2007                         316,000           .37
     Granted                                             --            --
     Cancelled and expired                               --            --
     Exercised                                           --            --
                                                   --------

Balance - August 31, 2007                           316,000          $.46
                                                   ========

Exercisable at August 31, 2007                      255,000
                                                   ========

                                       15
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

Note I - Employee Benefits (continued):

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

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

         2. Stock-based Employee Compensation - A grant of 100,000 shares of
         restricted common stock one year from the date of the agreement,
         provided the employee is then employed by the Company. In connection
         with this agreement, compensation in the amount of $33,000 was charged
         to selling, general and administrative expenses for the six months
         ended August 31, 2006.

Stock Option Plans - The following table summarizes information about fixed
stock options outstanding at August 31, 2007:
<TABLE>
<CAPTION>

                 Outstanding Options                                Exercisable Options
-------------------------------------------------------     ------------------------------------
                        Number         Weighted-Average         Number
  Range of            Outstanding          Remaining          Exercisable       Weighted-Average
Exercise Price        at 8/31/07       Contractual Life       at 8/31/07         Exercise Price
--------------      --------------     ----------------     ---------------     ----------------
<S> <C>                 <C>                   <C>                <C>                  <C>
    $.41                116,000               6.4                55,000               .41
     .51                100,000               2.2               100,000               .51
     .54                200,000               2.8               200,000               .54

</TABLE>

There are 498,000 options attributable to future grants.

Note J - Segment Reporting:

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

                                       16
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

Note J - Segment Reporting (continued):

Sales by geographic area are as follows:

                                                  Six Months Ended August 31,
                                                 -----------------------------
                                                     2007             2006
                                                 ------------     ------------
         United States                           $  1,565,042        1,548,251
         Asia                                         256,779          352,009
         Europe                                       112,488          138,881
         Other nations                                    250            5,840
                                                 ------------     ------------

         Total                                   $  1,934,559        2,044,981
                                                 ============     ============

         Two customers, located in the Southeastern United States, accounted for
more than 10% of revenues from continuing operations. These customers accounted
for 33.0% of sales of which 13.0% was near infrared dyes and 20.0% was security
inks.

         Long-lived assets include net plant, property and equipment. The
Company had long-lived assets of $861,715 and $798,560 located in the United
States at August 31, 2007 and 2006, respectively.

Note K - Accrued Expenses:

Accrued expenses consisted of the following as of August 31, 2007 and 2006,
respectively:

                                                     2007             2006
                                                 ------------     ------------
Commissions                                      $     12,025               --
Employment agreement                                  146,764          143,149
Insurance                                              29,902               --
Professional fees                                       6,000            6,000
Pension contribution                                       --            3,173
Property taxes                                             --            4,138
                                                 ------------     ------------

Total accrued expenses                           $    194,691          156,460
                                                 ============     ============

                                       17
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

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 August 31,    Six Months Ended August 31,
                                       -----------------------------   -----------------------------
                                            2007            2006            2007            2006
                                       -------------   -------------   -------------   -------------
<S>                                    <C>                   <C>       <C>                   <C>
Basic Earnings Per Common Share:

Net income                             $     196,864         121,049   $     349,640         346,948
                                       -------------   -------------   -------------   -------------
Average common shares
 outstanding                              11,966,355      11,966,355      11,966,355      11,966,355
                                       -------------   -------------   -------------   -------------
Basic earnings per
 common share                          $        0.02            0.01   $        0.03            0.03
                                       -------------   -------------   -------------   -------------

Diluted Earnings Per Common Share:

Net income                             $     196,864         121,049   $     349,640         346,948
                                       =============   =============   =============   =============
Average common shares
 outstanding                              11,966,355      11,966,355      11,966,355      11,966,355

Common shares issuable with respect
to options issued to employees
with a dilutive effect                        37,069          87,205          37,069          87,205
                                       -------------   -------------   -------------   -------------
Total diluted common shares
 outstanding                              12,003,424      12,053,560      12,003,424      12,053,560
                                       -------------   -------------   -------------   -------------
Diluted earnings per
 common share                          $        0.02            0.01   $        0.03            0.03
                                       =============   =============   =============   =============
</TABLE>

                                       18
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

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 $48,870 for the six months ended August 31, 2007 and 2006,
respectively.

Future minimum payments for the current option period:

          Fiscal years ending February:
          -----------------------------
                       2008                                     $48,870
                       2009                                      97,740
                       2010                                      97,740
                       2011                                      65,160

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

         In connection with this agreement, deferred compensation in the amount
of $5,171 and $6,020 was charged to selling, general and administrative expenses
for the six months ended August 31, 2007 and 2006, 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.

                                       19
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

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 August 31, 2007 and 2006 was $146,764 and $143,149, 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.

                                       20
<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 2007 AND 2006

Note N - Dividends:

         In April 2007, the Company's Board of Directors declared a cash
dividend of two cents 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 on
April 30, 2007.

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

Note O - Environmental Matters

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



                                       21