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, 2002

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

    For the transition period from            to


                 Commission file number 0-17741


                          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   [      ]

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: 11,881,855 outstanding
   as of August 31, 2002 (excluding 647,145 treasury shares)

<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.

Introduction

     Epolin, Inc. (the "Company") is a manufacturing and research
and  development company which was incorporated  in the State  of
New  Jersey in May 1984.   The Company is principally engaged  in
the  commercial development, production and sale of near infrared
dyes  to  the optical industry for laser protection, for welding,
for security inks and other dye applications as well as specialty
chemicals.

     This report contains certain forward-looking statements  and
information  that  reflect the Companys  expectations  about  its
future  operating  results, performance  and  opportunities  that
involve  substantial risks and uncertainties.  When used in  this
document, the words "anticipate",  "believe", "estimate", "plan",
"intend" and "expect" and similar expressions, as they relate  to
Epolin,  Inc.  or  its management are intended to  identify  such
forward-looking statements.  These forward-looking statements are
based  on information currently available to the Company and  are
subject  to  a number of risks, uncertainties, and other  factors
that  could  cause  the  Company's actual  results,  performance,
prospects  and  opportunities  to differ  materially  from  those
expressed  in,  or implied by, these forward-looking  statements.
Certain of these risks and uncertainties are discussed under  the
caption   "Forward-Looking  Statements"  in  Part   I,   Item   1
"Description of Business" of the Company's Annual Report on  Form
10-KSB  for the year ended February 28, 2002.  Except as required
by the Federal Securities Law, the Company does not undertake any
obligation  to  release publicly any revisions  to  any  forward-
looking  statements to reflect events or circumstances after  the
date of this report.

Results of Operations

     During  the  quarter  ended August  31,  2002,  the  Company
reported sales of approximately $736,000 as compared to sales  of
approximately $813,000 during the quarter ended August 31,  2001,
a  decrease  of  approximately $77,000 or 9.5%.  During  the  six
months  ended  August  31, 2002, the Company  reported  sales  of
approximately  $1,435,000 as compared to sales  of  approximately
$1,443,000  during  the  six months  ended  August  31,  2001,  a
decrease of approximately $8,000 or 0.6%.

     Operating  income for the three and six months ended  August
31,  2002  decreased  to  approximately  $256,000  and  $581,000,
respectively, from operating income of approximately $501,000 and
$881,000, respectively, for the three and six months ended August
31,  2001.   This change resulted primarily from an  increase  in
cost  of sales for the three and six months ended August 31, 2002
compared to the comparable periods of the prior fiscal year and a
less  significant increase in selling, general and administrative
expenses  for the three and six months ended August 31,  2002  as
compared to the three and six months ended August 31, 2001.  Cost
of  sales for the three and six months ended August 31, 2002  was
approximately $263,000 and $497,000, respectively, as compared to
cost  of  sales during the three and six months ended August  31,
2001  of  approximately $118,000 and $213,000.  Such  change  was
primarily due to the following factors.  For the six months ended
August  31,  2002 as compared to the same period  for  the  prior
year,  there  was  a negative factor

<PAGE>

of $191,000  mainly  due  to
inventory valuation changes, accounted for by a decrease in  cost
of  goods  sold of $152,000 as of August 31, 2001 and an increase
in  cost  of  goods sold of $39,000 as of August 31, 2002.  Other
factors  which contributed to the increase in cost of goods  sold
for  the  six months ended August 31, 2002 compared  to  the  six
months  ended August 31, 2001 included reallocation of  officers'
salaries  of  approximately $124,000 from SG&A  to  research  and
development and an approximate $23,000 increase in allocation  of
operating  expenses  to  factory overhead,  partially  offset  by
decreases in specialty chemical costs and laboratory salaries.

     During  the three and six months ended August 31, 2002,  the
Companys  selling,  general  and  administrative  expenses   were
approximately $217,000 and $357,000, respectively, as compared to
selling,  general  and administrative expenses  of  approximately
$194,000  and $349,000 for the three and six months ended  August
31, 2001.

     During  the three and six months ended August 31, 2002,  the
Company  realized approximately $7,000 and $13,000, respectively,
in  interest  income  as  compared to approximately  $14,000  and
$32,000  in  interest income for the comparable  periods  of  the
prior fiscal year.

     During  the  quarter  ended August  31,  2002,  the  Company
reported  income  before  taxes  of  approximately  $263,000   as
compared to income before taxes of approximately $514,000 for the
three  months  ended August 31, 2001.  For the six  months  ended
August  31,  2002, the Company reported income  before  taxes  of
approximately  $600,000  as compared to income  before  taxes  of
approximately $914,000 for the six months ended August 31,  2001.
Net  income  after taxes was approximately $152,000 or  $.01  per
share  for the three months ended August 31, 2002 as compared  to
income  after taxes of approximately $311,000 or $.03  per  share
for  the three months ended August 31, 2001.  For the six  months
ended  August  31, 2002, net income after taxes was approximately
$350,000 or $.03 per share as compared to net income after  taxes
of  approximately $540,000 or $.05 per share for  the  comparable
period of the prior fiscal year.

     Management  believes  that future business  look  promising.
The  Company is confident that it can continue to take  advantage
of its market position in terms of availability of dyes and their
performance.   Management  believes  that  the  Companys   newest
products,  such as security inks, came along just as  the  market
recognized  the  need  for  stronger security  measures.   Credit
cards,  proprietary packaging, official documents  and  personnel
badges  can use the near infrared inks the Company makes  because
they  provide  a  convenient and rapid addition to  the  security
features  already in place.  No assurance can be given,  however,
that this trend will continue or that the Company will be able to
successfully penetrate this market.

Liquidity and Capital Resources

     On  August  31,  2002, the Company had  working  capital  of
approximately   $2,091,000,  an   equity   to   debt   ratio   of
approximately  6.0 to 1, and stockholders equity of approximately
$2,708,000.   On  August 31, 2002, the Company had  approximately
$1,222,000  in  cash  and  cash  equivalents,  total  assets   of
approximately  $3,159,000 and total liabilities of  approximately
$450,000.

     The Company believes that its available cash, cash flow from
operations and projected revenues will be sufficient to fund  the
Companys operations for more than the next 12 months.

     The  Company  anticipates that it will incur in fiscal  2003
between approximately $75,000 and $100,000 in renovation costs to
its  facility  in Newark, New Jersey in order to expand  research
and  development  activities.   Other  than  the  foregoing,  the
Company   does  not  anticipate  making  any  other   significant
additional  capital expenditures in the immediate  future  as  it
believes its present machinery and equipment, in conjunction with
the  above mentioned renovations, will be sufficient to meet  its
near term needs.

<PAGE>

     Inflation  has  not  significantly  impacted  the   Companys
operations.

Other Information

     In  August  2001,  the  Board of Directors  of  the  Company
authorized a 500,000 share stock repurchase program.  Pursuant to
the  repurchase program, the Company may purchase up  to  500,000
shares  of  its common stock  in the open market or in  privately
negotiated  transactions  from time  to  time,  based  on  market
prices.  The Company indicated that the timing of the buyback  of
the  Companys  shares will be dictated by overall  financial  and
market  conditions  and  other  corporate  considerations.    The
repurchase  program  may  be suspended  without  further  notice.
During the fiscal year ended February 28, 2002, a total of 30,000
shares  were  repurchased at a cumulative cost  of  $14,837.   No
shares  were repurchased during the six months ended  August  31,
2002.   Under  a previous stock repurchase program authorized  in
March  1998,  which  permitted the Company to  repurchase  up  to
$150,000 of the Companys outstanding shares of common stock,  the
Company had repurchased from April 1998 through December  2000  a
total of 574,700 shares at a cumulative cost of $148,641.

     During  the  quarter  ended August  31,  2002,  the  Company
declared  a  $.04 per share dividend which was paid on  July  31,
2002.   During  the  fiscal year ended  February  28,  2002,  the
Company  paid two cash dividends, the first being $.03 per  share
in  June  2001  (which represented the first  time  that  a  cash
dividend  was paid by the Company) and the second being $.04  per
share in February 2002.

<PAGE>

                  PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

     In  December  2000, two individuals (each a former  director
and  former  employee  of  the Company) instituted  suit  in  the
Superior Court of New Jersey, Bergen County-Law Division, against
the  Company  and  the  other directors of the  Company  alleging
claims  pursuant to their past employment as well as a derivative
claim,  as minority stockholders.  Such claims include breach  of
contract, civil rights, age discrimination, wrongful termination,
infliction  of  emotional distress and a  shareholder  derivative
claim.  Such litigation is currently in the discovery stage.  The
Company  believes such claims are without merit and is  defending
such matter vigorously.

     As  a  result of certain information recently discovered  by
the  Company,  the Company intends to commence a separate  action
against  such  two individuals and other parties in which  action
the  Company  intends  to  allege, among other  things,  tortious
interference  with business relations, violation  of  non-compete
agreements  and breaches of fiduciary duty to the  Company.   The
Company intends to pursue this matter vigorously.

     While  the  outcome of such actions cannot be  predicted  at
this  time taking into account the uncertainty and risks inherent
in   any   litigation,   management  believes,   based   on   its
understanding   and   evaluation  of  the  relevant   facts   and
circumstances, that such actions will not likely have a  material
adverse  effect on the Company's results of operations, financial
position or cash flows.  Other than the foregoing, there  are  no
other material pending legal proceedings to which the Company  is
a party or to which any of its property is subject.


Item 2.  Changes in Securities.

          None.


Item 3.  Defaults Upon Senior Securities.

          None.


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

          None.


Item 5.  Other Information.

          None.


<PAGE>

Item 6.  Exhibits and Reports on Form 8-K.

          (a)  Exhibits.

          99.1 Certification pursuant  to  U.S.C.  Section
               1350,  as  adopted  pursuant  to  Section  906
               of  the Sarbanes-Oxley Act of 2002

          (b)  Reports on Form 8-K.

          Listed  below are reports on Form 8-K filed during  the
          fiscal quarter ended August 31, 2002.
          Form 8-K (dated August 16, 2001).  Items 4 and 7.  Changes
          Registrant's Certifying Accountant.

<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, 2002       By:       /s/ Murray S. Cohen
                                        Murray S. Cohen,
                                        Chairman of the Board
                                        and Chief Executive Officer



Dated:  October  15,  2002    By:       /s/  James Ivchenko
                                        James Ivchenko,
                                        President (Principal Financial
                                        Officer)


<PAGE>


                         CERTIFICATIONS

I, Murray S. Cohen, certify that:

1.   I  have  reviewed this quarterly report on  Form  10-QSB  of
Epolin, Inc.;

2.    Based  on  my  knowledge,  this quarterly report  does  not
contain any untrue statement of a material fact or omit to  state
a  material fact necessary to make the statements  made, in light
of  the   circumstances  under which such statements  were  made,
not  misleading  with  respect to  the  period  covered  by  this
quarterly report;

3.    Based  on my  knowledge,  the  financial  statements,   and
other  financial information  included  in this quarterly report,
fairly   present    in  all  material  respects   the   financial
condition,   results  of  operations  and  cash  flows   of   the
registrant   as  of, and for,  the  periods  presented   in  this
quarterly  report;

4.     The  registrants  other  certifying  officers  and  I  are
responsible for establishing and maintaining disclosure  controls
and  procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and have:

     (a)   designed  such disclosure controls and  procedures  to
ensure  that  material information relating  to  the  registrant,
including its consolidated subsidiaries, is made known to  us  by
others  within those entities, particularly during the period  in
which this quarterly report is being prepared;

     (b)    evaluated   the  effectiveness  of  the   registrants
disclosure  controls and procedures as of a date within  90  days
prior   to  the  filing  date  of  this  quarterly  report   (the
"Evaluation Date"); and

     (c)   presented  in  this quarterly report  our  conclusions
about the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;

5.    The  registrant's  other certifying  officers  and  I  have
disclosed,   based  on  our  most  recent  evaluation,   to   the
registrant's  auditors  and the audit  committee  of  registrants
board   of   directors  (or  persons  performing  the  equivalent
functions):

     (a)  all significant deficiencies in the design or operation
of   internal   controls   which  could  adversely   affect   the
registrant's  ability  to record, process, summarize  and  report
financial  data and have identified for the registrants  auditors
any material weaknesses in internal controls; and

     (b)   any  fraud,  whether  or not material,  that  involves
management or other employees who have a significant role in  the
registrant's internal controls; and

6.    The  registrant's  other certifying  officers  and  I  have
indicted  in  this  quarterly report whether or  not  there  were
significant changes in internal controls or in other factors that
could  significantly affect internal controls subsequent  to  the
date  of  our  most recent evaluation, including  any  corrective
actions  with  regard  to significant deficiencies  and  material
weaknesses.


Date: October 15, 2002             /s/ Murray S. Cohen
                                   Murray S. Cohen
                                   Chairman of the Board and
                                   Chief   Executive
                                   Officer (Principal Executive
                                   Officer)

<PAGE>

I, James Ivchenko, certify that:

1.   I  have  reviewed this quarterly report on  Form  10-QSB  of
Epolin, Inc.;

2.    Based  on  my  knowledge,  this quarterly report  does  not
contain any untrue statement of a material fact or omit to  state
a  material fact necessary to make the statements  made, in light
of  the   circumstances  under which such statements  were  made,
not  misleading  with  respect to  the  period  covered  by  this
quarterly report;

3.    Based  on my  knowledge,  the  financial  statements,   and
other  financial information  included  in this quarterly report,
fairly   present    in  all  material  respects   the   financial
condition,   results  of  operations  and  cash  flows   of   the
registrant   as  of, and for,  the  periods  presented   in  this
quarterly  report;

4.    The  registrant's  other  certifying  officers  and  I  are
responsible for establishing and maintaining disclosure  controls
and  procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and have:

     (a)   designed  such disclosure controls and  procedures  to
ensure  that  material information relating  to  the  registrant,
including its consolidated subsidiaries, is made known to  us  by
others  within those entities, particularly during the period  in
which this quarterly report is being prepared;

     (b)    evaluated   the  effectiveness  of  the   registrants
disclosure  controls and procedures as of a date within  90  days
prior   to  the  filing  date  of  this  quarterly  report   (the
"Evaluation Date"); and

     (c)   presented  in  this quarterly report  our  conclusions
about the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;

5.    The  registrant's  other certifying  officers  and  I  have
disclosed,   based  on  our  most  recent  evaluation,   to   the
registrants auditors and the audit committee of registrants board
of directors (or persons performing the equivalent functions):

     (a)  all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability  to record, process, summarize and report financial  data
and  have  identified for the registrant's auditors any  material
weaknesses in internal controls; and

     (b)   any  fraud,  whether  or not material,  that  involves
management or other employees who have a significant role in  the
registrant's internal controls; and

6.    The  registrant's  other certifying  officers  and  I  have
indicted  in  this  quarterly report whether or  not  there  were
significant changes in internal controls or in other factors that
could  significantly affect internal controls subsequent  to  the
date  of  our  most recent evaluation, including  any  corrective
actions  with  regard  to significant deficiencies  and  material
weaknesses.


Date: October 15,  2002        /s/ James Ivchenko
                                   James Ivchenko
                                   President (Principal Financial
                                   Officer)

<PAGE>

EPOLIN, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED AUGUST 31, 2002
AND AUGUST 31, 2001

<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 - 8

Notes to Consolidated Financial Statements               9 - 17


<PAGE>

ACCOUNTANT'S REVIEW REPORT




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

We  have  reviewed  the accompanying Consolidated  Balance
Sheets  of Epolin Inc. and Subsidiary as of August 31,  2002
and 2001   and   the  related  Consolidated  Statements  of
Income, Stockholders' Equity and Cash Flows for the six months
then ended in  accordance  with Statements on Standards for
Accounting  and Review  Services  issued by the American
Institute  of  Certified Public  Accountants.  All information
included in these financial statements  is  the representation
of the management  of  Epolin, Inc. and Subsidiary.

A  review  consists  principally of inquiries  of  Company
personnel  and  analytical procedures applied to financial
data. It  is  substantially less in scope than an audit  in
accordance with  generally  accepted auditing standards,  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 August
31, 2002  financial statements in order for them to be in
conformity with generally accepted accounting principles.


IWA FINANCIAL CONSULTING LLC

September 20, 2002

<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                                August 31,
                                                         -----------------------
Current assets:                                             2002         2001
                                                         ----------   ----------
   Cash and cash equivalents                             $1,221,649    1,590,314
   Accounts receivable                                      363,365      642,332
   Inventories                                              603,116      653,205
   Prepaid expenses                                          16,284       12,333
   Deferred tax assets-current portion                        1,758        8,379
                                                         ----------   ----------

      Total current assets                                2,206,172    2,906,563
                                                         ----------   ----------

Plant, property and equipment - at cost:
   Land                                                      81,000       81,000
   Building                                                 369,000      369,000
   Machinery and equipment                                  220,567      242,136
   Furniture and fixtures                                    12,223       12,223
   Leasehold improvements                                   534,287      432,037
                                                         ----------   ----------

      Total                                               1,217,077    1,136,396

   Less: Accumulated depreciation and amortization          674,069      684,129
                                                         ----------   ----------

      Net plant, property and equipment                     543,008      452,267
                                                         ----------   ----------

Other assets:
   Deferred tax assets-non current portion                  286,685      228,896
   Cash value - life insurance policy                       122,700      116,051
                                                         ----------   ----------

      Total other assets                                    409,385      344,947
                                                         ----------   ----------

         Total                                           $3,158,565    3,703,777
                                                         ==========   ==========



        See accountant's review report and notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>
                                 EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS (CONTINUED)

                            LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                            August 31,
                                                                     -----------------------
                                                                        2002         2001
                                                                     ----------   ----------
<S>                                                                  <C>           <C>
Current liabilities:
   Accounts payable                                                  $    5,769       60,324
   Accrued expenses                                                      91,767       86,552
   Taxes payable:
      Payroll                                                             6,334        1,065
      Income                                                             11,080      187,990
                                                                     ----------   ----------

      Total current liabilities                                         114,950      335,931
                                                                     ----------   ----------

Other liabilities:
   Deferred compensation                                                335,519      311,440
   Loans payable-officers                                                    --       10,319
                                                                     ----------   ----------

      Total other liabilities                                           335,519      321,759
                                                                     ----------   ----------

         Total liabilities                                              450,469      657,690
                                                                     ----------   ----------

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;
     12,529,000 and 12,179,000 shares issued and outstanding
     at 2002 and 2001, respectively                                   2,295,183    2,248,308
   Paid-in capital                                                        6,486        6,486
   Retained earnings                                                    576,580      946,609
                                                                     ----------   ----------

         Total                                                        2,878,249    3,201,403
   Less: Treasury stock-at cost                                         170,153      155,316
                                                                     ----------   ----------

      Total stockholders' equity                                      2,708,096    3,046,087
                                                                     ----------   ----------

         Total                                                       $3,158,565    3,703,777
                                                                     ==========   ==========
</TABLE>



        See accountant's review report and notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>
                            EPOLIN, INC. AND SUBSIDIARY

                         CONSOLIDATED STATEMENTS OF INCOME

                     SIX MONTHS ENDED AUGUST 31, 2002 AND 2001



                                                              2002          2001
                                                          -----------   -----------

<S>                                                       <C>             <C>
Sales                                                     $ 1,434,764     1,443,112
                                                          -----------   -----------

Cost of sales and expenses:
   Cost of sales                                              497,349       212,897
   Selling, general and administrative                        356,582       348,978
                                                          -----------   -----------

      Total                                                   853,931       561,875
                                                          -----------   -----------

Operating income                                              580,833       881,237
                                                          -----------   -----------

Other income:
   Interest                                                    12,771        32,348
   Gain on sale of assets                                       6,200            --
                                                          -----------   -----------
      Total other income                                       18,971        32,348
                                                          -----------   -----------

Income before taxes                                           599,804       913,585

Income taxes                                                  249,913       373,220
                                                          -----------   -----------

Net income                                                $   349,891       540,365
                                                          ===========   ===========


Per share data:
   Basic earnings per common share                               0.03          0.05
                                                          ===========   ===========

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

   Weighted average number of common shares outstanding    11,881,855    11,715,872
                                                          ===========   ===========
</TABLE>



        See accountant's review report and notes to financial statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                   THREE MONTHS ENDED AUGUST 31, 2002 AND 2001



                                                         2002            2001
                                                     -----------     -----------

Sales                                                $   736,408         813,191
                                                     -----------     -----------

Cost of sales and expenses:
   Cost of sales                                         262,902         118,184
   Selling, general and administrative                   217,388         194,493
                                                     -----------     -----------

      Total                                              480,290         312,677
                                                     -----------     -----------

Operating income                                         256,118         500,514
                                                     -----------     -----------

Other income - interest                                    6,683          13,768
                                                     -----------     -----------

Income before taxes                                      262,801         514,282

Income taxes                                             110,392         202,801
                                                     -----------     -----------

Net income                                           $   152,409         311,481
                                                     ===========     ===========


Per share data:
   Basic earnings per common share                          0.01            0.03
                                                     ===========     ===========

   Fully diluted earnings per common share                  0.01            0.03
                                                     ===========     ===========

   Weighted average number of
     common shares outstanding                        11,881,855      11,715,872
                                                     ===========     ===========



             See accompanying notes and accountant's review report.


<PAGE>

<TABLE>
<CAPTION>
                                  EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                           SIX MONTHS ENDED AUGUST 31, 2002 AND 2001



                                         Additional
                              Common      Paid-in-     Retained      Treasury    Stockholders'
                               Stock      Capital      Earnings        Costs        Equity
                            ----------   ----------   ----------    ----------    ----------

<S>                         <C>               <C>        <C>           <C>         <C>
Balance - March 1, 2001     $2,229,658        6,486      754,225      (155,316)    2,835,053

Dividends Paid                      --           --     (347,981)           --      (347,981)

Common stock issued             13,025           --           --            --        13,025

Net income                          --           --      540,365            --       540,365
                            ----------   ----------   ----------    ----------    ----------

Balance - August 31, 2001   $2,242,683        6,486      946,609      (155,316)    3,040,462
                            ==========   ==========   ==========    ==========    ==========




Balance - March 1, 2002     $2,295,183        6,486      701,963      (170,153)    2,833,479

Dividends Paid                      --           --     (475,274)           --      (475,274)

Net income                          --           --      349,891            --       349,891
                            ----------   ----------   ----------    ----------    ----------

Balance - August 31, 2002   $2,295,183        6,486      576,580      (170,153)    2,708,096
                            ==========   ==========   ==========    ==========    ==========
</TABLE>



        See accountant's review report and notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>
                              EPOLIN, INC. AND SUBSIDIARY

                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                       SIX MONTHS ENDED AUGUST 31, 2002 AND 2001


                                                                   2002         2001
                                                                ---------    ---------
<S>                                                             <C>            <C>
Cash flows from operating activities:
  Net income                                                    $ 349,891      540,365
  Adjustments to reconcile net income to net cash provided by
   operating activities:
    Depreciation and amortization                                  13,170       11,115
    Deferred tax expense                                            2,353        3,503
    Obligation under deferred compensation agreement               12,038       12,038
    Gain on sale of assets                                         (6,200)          --
  (Increase) decrease in:
    Accounts receivable                                             2,470     (336,049)
    Inventories                                                    39,521     (151,613)
    Prepaid expenses                                               24,845       16,790
  Increase (decrease) in:
    Accounts payable                                              (14,805)      50,131
    Accrued expenses                                              (57,639)     (47,606)
    Taxes payable                                                 (92,931)     154,630
                                                                ---------    ---------

      Net cash provided by operating activities                   272,713      253,304
                                                                ---------    ---------

Cash flows from investing activities:
  Increase in cash value - life insurance policy                  (11,770)     (10,000)
  Sale of equipment                                                 8,000           --
  Payments for equipment                                          (89,895)     (14,115)
                                                                ---------    ---------

      Net cash used by investing activities                       (93,665)     (24,115)
                                                                ---------    ---------
</TABLE>



        See accountant's review report and notes to financial statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    SIX MONTHS ENDED AUGUST 31, 2002 AND 2001


                                                        2002            2001
                                                    -----------     -----------
Cash flows from financing activities:
  Dividends paid                                       (475,274)       (347,980)
  Proceeds from the issuance of common stock                 --          18,650
                                                    -----------     -----------

    Net cash used by financing activities              (475,274)       (329,330)
                                                    -----------     -----------

Decrease in cash                                       (296,226)       (100,141)

Cash and cash equivalents:
  Beginning                                           1,517,875       1,690,455
                                                    -----------     -----------

  Ending                                            $ 1,221,649       1,590,314
                                                    ===========     ===========

Supplemental information:
  Income taxes paid                                 $   345,182         209,135
                                                    ===========     ===========

  Interest paid                                     $        --             418
                                                    ===========     ===========



        See accountant's review report and notes to financial statements.


<PAGE>





EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002



NOTE A - ORGANIZATION AND BASIS OF PRESENTATION:

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

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

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

Concentrations of Credit Risks - The Company and its
Subsidiary had  cash  deposits of $1,200,025 and $1,490,300 in
a  financial institution  and  a  brokerage house in  excess
of  the  amount insured by agencies of the federal government
at August 31, 2002 and  August  31, 2001, respectively.  In
evaluating this  credit risk,  the Company periodically
evaluates the stability  of  the financial institution and the
brokerage house.

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

Fair  Value  of Financial Instruments - All reported assets
and liabilities, which represent financial instruments,
approximate the carrying values of such amounts.

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

Depreciation and amortization expense totaled $13,170 and
$11,115 for the six months ended August 31, 2002 and 2001,
respectively.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation - The accompanying Consolidated Financial Statements
include the accounts of the Company and Subsidiary. Intercompany transactions
and balances have been eliminated in consolidation. Condensed consolidating
financial statements for the six months ended August 31, 2002:

<TABLE>
<CAPTION>
                               CONDENSED CONSOLIDATING BALANCE SHEET

                                                                                         Epolin
                                      Consolidated    Eliminations       Epolin          Holding
                                      ------------    ------------    ------------    ------------

<S>                                   <C>                 <C>            <C>               <C>
Current assets                        $  2,206,172              --       2,169,874          36,298
Non-current assets                         952,393        (514,044)        988,601         477,836
                                      ------------    ------------    ------------    ------------
    Total assets                      $  3,158,565        (514,044)      3,158,475         514,134
                                      ============    ============    ============    ============

      Total liabilities                    450,469        (151,706)        450,379         151,796
                                      ------------    ------------    ------------    ------------

Stockholders' equity:
  Common stock                           2,295,183              --       2,295,183              --
  Additional paid-in capital                 6,486              --           6,486              --
  Retained earnings                        576,580        (362,338)        576,580         362,338
  Treasury stock                          (170,153)             --        (170,153)             --
                                      ------------    ------------    ------------    ------------

    Total stockholders' equity           2,708,096        (362,338)      2,708,096         362,338
                                      ------------    ------------    ------------    ------------

      Total                           $  3,158,565        (514,044)      3,158,475         514,134
                                      ============    ============    ============    ============
</TABLE>



<TABLE>
<CAPTION>
                            CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                                                                         Epolin
                                      Consolidated    Eliminations       Epolin          Holding
                                      ------------    ------------    ------------    ------------

<S>                                   <C>                  <C>           <C>                <C>
Sales                                 $  1,434,764              --       1,434,764              --
Other revenue                                   --         (48,870)             --          48,870
                                      ------------    ------------    ------------    ------------
    Total                                1,434,764         (48,870)      1,434,764          48,870
                                      ------------    ------------    ------------    ------------

Cost of sales                              497,349              --         497,349              --
Selling, general and administrative        356,582         (48,870)        395,178          10,274
                                      ------------    ------------    ------------    ------------

    Total                                  853,931         (48,870)        892,527          10,274

Operating income                           580,833              --         542,237          38,596

Other income                                18,971              --          18,787             184
                                      ------------    ------------    ------------    ------------

Income before taxes                        599,804              --         561,024          38,780

Income taxes                               249,913              --         246,383           3,530
                                      ------------    ------------    ------------    ------------

Net income                            $    349,891              --         314,641          35,250
                                      ============    ============    ============    ============
</TABLE>


<PAGE>




EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued):

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

Stock  Options  -  As permitted by FASB Statement  of Financial
Accounting  Standards  No. 123, and explained  in  Note  G,
the Company  accounts for employee stock options in accordance
with the  provisions of Accounting Principles Board Opinion
No.  25, under  which  compensation expense is  recognized
only  to  the extent  that the market price for stock options
granted  exceeds the exercise price of the underlying common
stock at the date of grant. As of August 31, 2002, market price
in excess of exercise price  of certain options was deemed
immaterial to the financial statements.

Use  of  Estimates - The preparation of financial statements
in conformity   with   generally  accepted  accounting
principles requires  management  to  make estimates  and
assumptions  that affect  the  reported  amounts of  assets
and  liabilities  and disclosure of contingent assets and
liabilities at the  date  of the  financial statements and the
amounts of sales and  expenses during  the  reporting period.
Actual results could differ  from those estimates.

Revenue  Recognition - Revenue is recorded on the accrual
basis and is recognized at the point of sale as products are
shipped.

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

Regulations  -  The  Company expended  approximately  $14,326
to maintain  compliance  with certain Federal and  State
government regulations relative to the production of near
infrared dyes  and specialty chemicals.

<PAGE>
EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002



NOTE C - ECONOMIC DEPENDENCY:

A  material  portion of the Company's business  is  dependent
on certain  domestic  customers, the loss  of  which  could
have  a material  effect  on  operations.  During the  six
months  ended August  31,  2002,  approximately 55.4% of  sales
were  to  four customers.    Three of these customers, located
in  the  Eastern United  States,  accounted for 44.1% of
sales.  During  the  six months  ended August 31, 2001,
approximately 58.2% of sales  were to  four  customers,  three
of these customers,  located  in  the Eastern United States,
accounted for 44.7% of sales.





NOTE  D  - INVENTORIES:
                                      2002      2001
Raw materials and supplies         $  48,346    45,191
Work in process                      171,644   244,399
Finished goods                       383,126   363,615

                  Total             $603,116   653,205


NOTE E - INCOME TAXES:
                                      2002       2001

1.  Federal and State deferred tax assets include:

Temporary differences - principally from
accelerated amortization of leasehold
improvements for book purposes and
deferred compensation               $288,44    237,275

Current  portion                      1,758      8,379

Non-current portion                $286,685    228,896

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002



NOTE E - INCOME TAXES (continued):


2.  Income tax expense:

                                        2002     2001
Current:
Federal                              $191,700   286,327
State                                  55,860    83,390

 Total current                        247,560   369,717

Deferred:
Federal                                 1,861     2,771
State                                     492       732

 Total deferred                         2,353     3,503

        Total                        $249,913   373,220

NOTE F - ACCRUED SALARIES:

On April 25, 1995, the Board of Directors authorized the
issuance of 1,000,000 shares of common stock (market value $.04
per share) to  an officer in lieu of $40,000 of his remaining
accrued salary of  $89,948.  The unpaid balance of $49,948 was
paid  during  the period ended February 28, 2001.

NOTE G - EMPLOYEE BENEFITS:

Simplified  Employee  Pension Plan  -  Effective  June  1,
1994, covering   all  eligible  participating  employees  as
defined. Employer  contributions totaled $6,607 and  $4,532
for  the  six months ended August 31, 2002 and August 31, 2001,
respectfully.

Incentive  Compensation  Plan - On  December  1989,  the
Company approved the 1989 Incentive Compensation Plan for the
purpose  of attracting  and  retaining key personnel.  All
employees  of  the Company are eligible to participate in the
plan whereby incentive bonuses  are determined by the Board of
Directors and payable  in shares  of common stock.  Shares
issued are determined  at  fifty percent  of the closing bid
price, vested, and delivered  over  a three-year  period.
During the year  ended  February  28,  1999, 20,000  shares of
common stock were issued covering a  previously awarded bonus
to an employee on May 18, 1998.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002

NOTE G - EMPLOYEE BENEFITS (continued):

Employee  Option Plan - The Company previously adopted  The
1986 Stock  Option  Plan.  As of April 1996, options  were  no
longer granted.   Under the terms of the Plan, options granted
could  be designated as portions, which qualify for incentive
stock  option treatment  under  Section 422A of the Internal
Revenue  Code  of 1986,  as  amended, or options, which do not
qualify. On December 1, 1995, options to acquire up to 490,000
shares of the Company's common  stock were granted and expire
on December 1, 2005. During the  year  ended  February 28,
2002, the Company  issued  185,000 shares  of  common stock to
three employees. Common stock  issued for  all  prior  years
totaled 270,000 shares.  Options  totaling 35,000  expired  for
all prior years. There were  no  outstanding options as of
August 31, 2002.

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  which have been granted expire
five or ten  years  after the  date granted and are subject to
a vesting period as follows: (1) no portion will be exercisable
prior to the first anniversary of  the  date  of grant, and (2)
each of the options will  become exercisable as to 50% of the
shares underlying the option on each of  the  first  and
second anniversaries of  the  date  granted. Options  exercised
through the year ended February 28, 2002  were 400,000.

There  were  no  options exercised during the  six  months
ended August 31, 2002.

Options granted as of August 31, 2002:

Number of     Exercise    Date              Expiration
Shares        Price       Granted           Date
425,000        $.15   December 1, 1998      December 1, 2008
 25,000         .15   February 10, 1999     February 10, 2009
 25,000         .15   February 10, 2000     February 10, 2010
 50,000         .15   September 1, 2001     September 1, 2006
330,000         .25   September 15, 2001    September 15, 2006

There are 645,000 options attributable to future grants.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002


NOTE H - TREASURY STOCK:

Consists of 647,145 shares as of August 31, 2002 at a net cost
of $170,153.

No purchases were made by the Company during the six months
ended August 31, 2002.

NOTE I - RESEARCH AND DEVELOPMENT:

Amounts  of  $141,019  and  $99,394 were  included  in
selling, general,  and  administrative expenses for the six
months  ended August  31, 2002 and 2001, respectively. All
costs are borne  by the Company.

NOTE J - ACQUISITIONS:

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

NOTE K - COMMITMENTS AND CONTINGENCIES:

On   October  17,  1996,  Epolin  Holding  Corp.,  a  New
Jersey Corporation  controlled by Murray S. Cohen, Ph.D.  and
James  A. Ivchenko,  officers/stockholders of Epolin,  Inc.
purchased  the premises  leased from 350 South Street
Partnership for  $450,000. The  Board  of Directors approved
this transaction in  June  1996 based  upon  the terms of a
$350,000 mortgage obtained  from  the Broad   National   Bank
wherein  personal  guarantees   of   two officers/stockholders
were mandatory. Other  directors  declined participation in
this transaction.

The  down  payment  of $100,000 was borrowed  from  the
Company, evidenced by a five (5) year promissory note of
$75,565 (net of a three (3) months security deposit) payable in
monthly payments of $1,541, including interest at an annual
rate of 8.25%.

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.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002

NOTE K - COMMITMENTS AND CONTINGENCIES (continued):

Rental   expense   charged   to   operations,   eliminated
in consolidation,  amounted to $48,870 for  the  six  months
ended August 31, 2002 and 2001, respectively.

Future minimum payments for the current option period:

Fiscal years ending February:
             2003                $48,870
             2004                 97,740
             2005                 97,740
             2006                 97,740
             2007                 65,160

Deferred  Compensation  -  On December  29,  1995,  the
Company entered  into a deferred compensation agreement with an
officer. This  officer's additional annual compensation of
$19,645  plus interest is deferred until such time the officer
reaches age  65 or  is  terminated. The obligation is being
funded  by  a  life insurance policy. Annual payments to the
officer of $32,000  for ten  consecutive years shall commence
the first day of the month following his 65th birthday or
termination.  On January 1, 1996, the  Company entered into a
deferred compensation agreement with an additional officer
wherein $25,000 per year was accrued. This agreement, with
unfunded accruals of $79,041 terminated on  June 25,  1998,
and  will be paid upon retirement  in  either  equal
consecutive  monthly payments for a period not  exceeding
sixty (60)  months or a single payment equal to the then
present value of  the  account, said selection to be at the
discretion of  the Company. The Company entered into a second
deferred compensation agreement with the same officer on June
25, 1998, which provided for  the  payment  of certain funds
for a period  of  ten  years beginning  two  weeks  after the
date of  his  retirement.  This agreement was terminated March
1, 1999.

Effective   March   1,   1999,  the  Company   adopted
deferred compensation agreements for two of its employees.
Under the term of  the  agreement, each employee would receive
one twenty  sixth (1/26)  of  fifty percent (50%) of their
annual salary (excluding bonuses)  as  of the date of
retirement. Each has a death-vesting schedule.   Management has
elected not to provide any  additional funding  for  either
employee subsequent to  the  date  the  two employees were no
longer employed by the Company.

Deferred  compensation of $12,040 was charged to operations
for the  six  months  ended  August 31, 2002 and  August  31,
2001, respectively.

<PAGE>

EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2002

NOTE K - COMMITMENTS AND CONTINGENCIES (continued):

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

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

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

CONTINGENCIES:

In  December  2000, two individuals (each a former  director
and former  employee of the Company) instituted suit in the
Superior Court  of  New  Jersey, Bergen County-Law Division,
against  the Company  and  the other directors of the Company
alleging  claims pursuant to their past employment as well as a
derivative  claim, as   minority  stockholders.   Such  claims
include  breach   of contract, civil rights, age
discrimination, wrongful termination, infliction  of  emotional
distress and a  shareholder  derivative claim.  Such litigation
is currently in the discovery stage.  The Company  believes
such claims are without merit and is  defending such matter
vigorously.

As  a  result of certain information recently discovered  by
the Company,  the  Company  intends to  commence  a  separate
action against  such  two individuals and other parties in
which  action the  Company  intends  to  allege, among other
things,  tortuous interference  with business relations,
violation  of  non-compete agreements  and breaches of
fiduciary duty to the  Company.   The Company intends to pursue
this matter vigorously.

While  the  outcome of such actions cannot be predicted  at
this time  taking  into account the uncertainty and risks
inherent  in any  litigation, management believes, based on its
understanding and evaluation of the relevant facts and
circumstances, that such actions  will  not likely have a
material adverse effect  on  the Company's  results  of
operations, financial  position  or  cash flows.

Other  than  the foregoing, there are no other materials
pending legal proceedings to which the Company is a party or to
which any of its property is subject.