SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, DC 20549

                          FORM 10-QSB/A
                        (Amendment No. 1)

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

          For the quarterly period ended May 31, 2004

     [ ] 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: 11,840,355
                 outstanding as of May 31, 2004

<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.

Executive Overview

     Epolin,  Inc.  (the  "Company") is  a  specialized  chemical
company   primarily  engaged  in  the  manufacturing,  marketing,
research  and  development  of dyes and  dye  formulations.   The
Company's  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.   The  Company  also  manufactures
specialty   chemicals   for  certain   United   States   chemical
manufacturers.

      The  Company has succeeded in growing over the last  decade
based  on  the development, application and manufacture  of  near
infrared  dyes.  Although the Company does not rely upon  patents
for  protection  of  its  dye business, no  competitors,  to  the
Company's  knowledge, actively market near infrared dyes  without
bundling the dyes as part of another product.  The Company's dyes
can  be uniquely formulated to each customer's specifications and
manufactured  in  the Company's own facility.  In  addition,  the
Company  holds  a broad range of dyes in inventory for  immediate
sale.

       The  Company  sells  its  products  to  manufacturers   of
plastics/resins, credit cards, electronics, glass and other basic
materials.  The Company's customers are located in all regions of
the  world, although 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.   As  the  service
economy continues to dwarf the manufacturing sector in the United
States,  the  Company  anticipates  that  its  products  will  be
increasingly  used by manufacturers located abroad.   During  the
three  months  ended May 31, 2004, approximately 51.6%  of  sales
were  to four customers.  Two of these customers, located in  the
eastern United States, accounted for 39.0% of sales.  During  the
three  months  ended May 31, 2003, approximately 52.2%  of  sales
were to four customers.  Three of three customers, located in the
eastern United States, accounted for 37.6% of sales.

      We  recently  contracted with an outside firm  to  help  us
develop  a  business plan that could serve as a guide for  future
growth  of  the Company.  Management realized that  some  of  our
product  line  was reaching maturity and it was of importance  to
know  where we could direct our resources for greatest impact  on
the marketplace.

      For  example,  the areas in which we achieved  our  initial
growth  had  been  in sales to the welding industry  for  use  in
safety  lenses  and  shields. We continue to  maintain  a  strong
presence as a dye supplier to this market segment. However, as an
outcome of automation and a slowdown in economic activity in  the
heavy industry sector, demand worldwide has reached a plateau. As
a  result,  much of the industry has moved overseas to  producers
mostly in the Far East.  To maintain our hold on these markets we
now  offer fully formulated dye packages which can be used by the
lens  manufacturer simply by adding the package to  polycarbonate
and  injection  molding the final product. Greater  emphasis  has
recently been placed on sales

<PAGE>

and marketing in order to grow  our
business in security inks and coatings. We are also working  with
customers who bring to our attention unique requirements for near
infrared  dyes.   In  our  research and development  efforts  our
chemists  have  developed a number of heat stable and  compatible
visible  light  dyes  which can be used in combination  with  the
infrared dyes. We have also been able to duplicate the laminating
conditions   used   by  credit  card  manufacturers   for   color
development  and  to confirm that the cards produced  from  these
inks will meet ISO and industry standards.

Results of Operations

      The following table sets forth operations data expressed as
a percentage of sales.

                                          Three   Months
                                              Ended

                                       May 31,        May 31,
                                        2004           2003

Sales                                   100%           100%

Cost of sales and expenses:
  Cost of sales                         44.0           33.2
  Selling, general
  and  administrative                   39.2           28.0

     Total                              83.2           61.2

Operating Income                        16.8           38.8

Income before taxes                     19.1           41.0

Net  income  (after  taxes
and extraordinary  item)                10.5           23.9

Sales

      Sales decreased to $464,000 for the three months ended  May
31, 2004 from $687,000 for the three months ended May 31, 2003, a
decrease  of $223,000 or 32.5%, which decrease was primarily  due
to a reduced level of orders from many of the Company's customers
during the quarter ended May 31, 2004.

Cost of Sales and Expenses

      Cost  of sales decreased $24,000, to $204,000 for the three
months  ended  May 31, 2004 from  $228,000 for the  three  months
ended May 31, 2003.  Selling, general and administrative expenses
decreased   to $182,000 for the three months ended May  31,  2004
from $193,000 for the three months ended May 31, 2003, a decrease
of  $11,000.   The  total of cost of sales and expenses  for  the
three  months  ended  May 31, 2004 was $386,000  as  compared  to
$420,000  for the three months ended May 31, 2003, a decrease  of
$34,000.  Such decrease was due to the reduced cost of sales  and
selling, general and administrative expenses for the three months
ended  May  31, 2004 compared to the comparable period of  fiscal
2003.

Operating Income

      Operating  Income for the three months ended May  31,  2004
decreased to $78,000 from $266,000 for the three months ended May
31,  2003, a decrease of $188,000.  This change was primarily due
to  the  reduced  level of sales achieved by the Company  in  the
first quarter of fiscal 2005 compared to the first quarter of the
prior year.

<PAGE>

Other Income

      Total other income for the three months ended May 31,  2004
was $10,000 as compared to $15,000 for the three months ended May
31,  2003.  The Company realized $9,000 in rental income for  the
three  months ended May 31, 2004 as compared to $12,000 in rental
income  for  the  three  months ended May  31,  2003.   Effective
November  1,  2002,  the Company began to sublease  approximately
2,500  square feet of its space to a non-related party to operate
an  optics  and  security inks laboratory at an  annual  rent  of
$36,000.  The Company's interest income decreased from $3,000  in
the three months ended May 31, 2003 to $1,000 in the three months
ended May 31, 2004 primarily as a result of reduced cash on  hand
and lower interest rates available for cash on hand.

Income

      During  the  three months ended May 31, 2004,  the  Company
reported  income  before taxes of $88,000 as compared  to  income
before taxes of $281,000 for the three months ended May 31, 2003.
Income taxes were $40,000 for the three months ended May 31, 2004
compared  to  $117,000 for the three months ended May  31,  2003.
Net  income  after taxes was $49,000 or $0.00 per share  for  the
three  months ended May 31, 2004 as compared to net income  after
taxes  of $164,000 or $0.01 per share for the three months  ended
May 31, 2003.

      Net income in the future will be dependent upon our ability
to increase revenues faster than we increase our selling, general
and administrative expenses, research and development expense and
other  expenses.  We anticipate such expenses will  remain  at  a
fairly  constant  level  in near term.  Although  we  suffered  a
setback  in  sales in the first quarter of fiscal  2005,  we  are
confident that business will improve.  We are encouraged that  we
have  recently shipped development quantities of dyes to  certain
new customers which we hope will lead to new ongoing business for
the  Company's products.  No assurance can be given however  that
that  such  will be the case or that our sales will  continue  to
improve  from  the reduced level of sales we experienced  in  the
first quarter of 2005.

Liquidity and Capital Resources

      The  Company's  primary source of funds is cash  flow  from
operations in the normal course of selling products.  On May  31,
2004,  the Company had working capital of $1,949,000, a  debt  to
equity   ratio  of  0.18  to  1,  and  stockholders'  equity   of
$2,667,000.   On May 31, 2004, the Company had $817,000  in  cash
and  cash  equivalents,  total assets  of  $3,151,000  and  total
liabilities of $484,000.

      The  Company anticipates, based on currently proposed plans
and assumptions relating to its operations, that its current cash
and  cash  equivalents together with projected  cash  flows  from
operations  and projected revenues will be sufficient to  satisfy
its  contemplated  cash requirements for more than  the  next  12
months.

      Inflation  has  not  significantly impacted  the  Company's
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  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  fiscal  year ended February 29,  2004,  a  total  of
184,000 shares were repurchased at a cumulative cost of $103,405.
During  the  three months ended May 31, 2004, no

<PAGE>

repurchases  of
shares  were made by the Company.  During the fiscal  year  ended
February 28, 2003, a total of 32,500 shares were repurchased at a
cumulative  cost  of $18,624 while during the fiscal  year  ended
February 28, 2002, a total of 30,000 shares were repurchased at a
cumulative  cost  of $14,837.  Under a previous stock  repurchase
program authorized in March 1998, which permitted the Company  to
repurchase up to $150,000 of the Company's 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 fiscal 2004, the Company paid two cash dividends, the
first  being  $.02 per share in August 2003 and the second  being
$.02  per shares in February 2004.  During the fiscal year  ended
February 28, 2003, the Company also paid two cash dividends,  the
first being $.04 per share in July 2002 and the second being $.03
per  share in January 2003.  Prior thereto, and during the fiscal
year  ended  February 28, 2002, the Company also  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.

      Murray  S. Cohen, the Company's Chairman of the  Board  and
Chief Executive Officer, recently announced his intention to step
down  as Chief Executive Officer at an undetermined future  date,
while  continuing to remain as Chairman of the  Board  and  Chief
Scientist for the Company.  Dr. Cohen has indicated that he  will
remain  as  Chief  Executive Officer until  such  time  that  the
Company  finds  a suitable replacement and, in this  regard,  the
Board   of   Directors  recently  formed  a   search   committee.
Nevertheless, insofar that the Company is confident that it  will
be  able  to  find a suitable replacement and together  with  Dr.
Cohen's  intention not to step down as Chairman of the Board  and
that he will remain involved with the business as Chief Scientist
for  the Company, the Company believes that such change will  not
have   a  material  adverse  effect  of  the  Company's  business
operations.

Off-Balance Sheet Arrangements

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


Item 3.   Controls and Procedures.

     The   Company's   Chief  Executive  Officer  and   Principal
Financial Officer have reviewed the Company's disclosure controls
and  procedures  as  of  the end of the period  covered  by  this
report.   Based upon this review, such officers believe that  the
Company's  disclosure controls and procedures  are  effective  in
timely  alerting  them  to material information  required  to  be
included  in this report. There have been no significant  changes
in internal control over financial reporting that occurred during
the  fiscal  quarter covered by this report that have  materially
affected,  or  are  reasonably likely to materially  affect,  the
Company's 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.  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.


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

          (a)  Exhibits.

          31.1 Certification of Chief Executive Officer pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of
          the Exchange Act)
          31.2 Certification of Principal Financial Officer pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and
          15d-14 of the Exchange Act)
          32.1 Certification pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

          (b)  Reports on Form 8-K.

          Listed  below are reports on Form 8-K filed during  the
          fiscal quarter ended May 31, 2004.

             None.

<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: December 8, 2004      By:/s/Murray S. Cohen
                             Murray S. Cohen,
                             Chairman of the Board
                             and Chief Executive Officer



Dated: December 8, 2004      By:/s/James Ivchenko
                             James Ivchenko,
                             President (Principal Financial
                             Officer)


<PAGE>

                   EPOLIN, INC. AND SUBSIDIARY

                      FINANCIAL STATEMENTS

            THREE MONTHS ENDED MAY 31, 2004 AND 2003


<PAGE>


                            CONTENTS





                                                  Page

Accountant's Review Report                          1

Consolidated Financial Statements:

    Consolidated Balance Sheets                   2 - 3

    Consolidated Statements of  Income              4

    Consolidated Statements of
    Stockholders' Equity                            5

    Consolidated Statements of
    Cash Flows                                    6 - 7

Notes to Consolidated Financial Statements        8 - 17


<PAGE>


                 ACCOUNTANT'S REVIEW REPORT




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 May 31, 2004  and
2003  and  the  related Consolidated Statements  of  Income,
Stockholders'  Equity  and Cash Flows  for  the  three-month
period  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/ IWA FINANCIAL CONSULTING LLC
IWA FINANCIAL CONSULTING LLC
Livingston, NJ 07039




June 16,2004


<PAGE>



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

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                               May 31,
                                                                     ---------------------------
                                                                         2004           2003
                                                                     ------------   ------------
<S>                                                                  <C>               <C>
Current assets:
 Cash and cash equivalents                                           $    816,692   $  1,159,636
 Accounts receivable                                                      448,406        476,232
 Inventories                                                              817,965        643,375
Notes receivable                                                               --          4,349
 Prepaid expenses                                                          77,881        128,368
 Deferred tax assets-current portion                                        1,376          2,198
                                                                     ------------   ------------

   Total current assets                                                 2,162,320      2,414,158
                                                                     ------------   ------------
Plant, property and equipment - at cost:
 Land                                                                      81,000         81,000
 Building                                                                 369,000        369,000
 Machinery and equipment                                                  254,027        226,081
 Furniture and fixtures                                                    12,223         12,223
 Leasehold improvements                                                   600,679        560,400
                                                                     ------------   ------------

   Total                                                                1,316,929      1,248,704

 Less: Accumulated depreciation and amortization                          724,100        693,928
                                                                     ------------   ------------

   Net plant, property and equipment                                      592,829        554,776
                                                                     ------------   ------------
Other assets:
 Deferred tax assets-non current portion                                  229,065        273,170
 Cash value - life insurance policy                                       166,772        144,413
                                                                     ------------   ------------

   Total other assets                                                     395,837        417,583
                                                                     ------------   ------------

   Total                                                             $  3,150,986   $  3,386,517
                                                                     ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                               May 31,
                                                                     ---------------------------
                                                                         2004           2003
                                                                     ------------   ------------
<S>                                                                  <C>               <C>
Current liabilities:
 Accounts payable                                                    $      6,141   $     14,306
 Accrued expenses                                                         199,430        176,847
 Taxes payable:
   Payroll                                                                  1,719          1,737
   Income                                                                   6,489        107,400
                                                                     ------------   ------------
   Total current liabilities                                              213,779        300,290
                                                                     ------------   ------------

Other liabilities - Deferred compensation                                 270,030        353,578
                                                                     ------------   ------------

     Total liabilities                                                    483,809        653,868
                                                                     ------------   ------------

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;
  12,704,000 and 12,566,500 shares issued, 11,840,355 and
  11,876,855 shares outstanding at 2004 and 2003, respectively          2,333,933      2,304,558
  Paid-in capital                                                           6,486          6,486
  Retained earnings                                                       618,940        616,562
                                                                     ------------   ------------

     Total                                                              2,959,359      2,927,606
  Less: Treasury stock-at cost                                            292,182        194,957
                                                                     ------------   ------------

   Total stockholders' equity                                           2,667,177      2,732,649
                                                                     ------------   ------------

   Total                                                             $  3,150,986   $  3,386,517
                                                                     ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                    THREE MONTHS ENDED MAY 31, 2004 AND 2003

                                                               2004           2003
                                                           ------------   ------------
<S>                                                        <C>             <C>
Sales                                                      $    463,723   $    686,767
                                                           ------------   ------------
Cost of sales and expenses:
 Cost of sales                                                  204,111        227,751
 Selling, general and administrative                            181,550        192,588
                                                           ------------   ------------

   Total                                                        385,661        420,339
                                                           ------------   ------------

Operating income                                                 78,062        266,428
                                                           ------------   ------------
Other income:
 Rental income                                                    9,000         12,000
 Interest                                                         1,284          2,842
                                                           ------------   ------------

   Total other income                                            10,284         14,842
                                                           ------------   ------------

Income before taxes                                              88,346        281,270

Income taxes                                                     39,526        117,408
                                                           ------------   ------------

Net income                                                       48,820        163,862
                                                           ============   ============
Per share data:
 Basic earnings per common share                                   0.00           0.01
                                                           ============   ============

 Fully diluted earnings per common share                           0.00           0.01
                                                           ============   ============

 Weighted average number of common shares outstanding        11,840,355     11,878,485
                                                           ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                    THREE MONTHS ENDED MAY 31, 2004 AND 2003

                                             Additional      Retained
                                Common        Paid-in-       Earnings        Treasury    Stockholders'
                                Stock         Capital        Deficit          Costs         Equity
                             ------------   ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>             <C>           <C>
Balance - March 1, 2003      $  2,304,558   $      6,486   $    452,700   $   (188,777)  $  2,574,967

Treasury stock purchased               --             --             --         (6,180)        (6,180)

Net income                             --             --        163,862             --        163,862
                             ------------   ------------   ------------   ------------   ------------

Balance - May 31, 2003       $  2,304,558   $      6,486   $    616,562   $   (194,957)  $  2,732,649
                             ============   ============   ============   ============   ============


Balance - March 1, 2004      $  2,333,933   $      6,486   $    570,120   $   (292,182)  $  2,618,357

Net income                             --             --         48,820             --         48,820
                             ------------   ------------   ------------   ------------   ------------
Balance - May 31, 2004       $  2,333,933   $      6,486   $    618,940   $   (292,182)  $  2,667,177
                             ============   ============   ============   ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    THREE MONTHS ENDED MAY 31, 2004 AND 2003

                                                                    2004           2003
                                                                ------------   ------------
<S>                                                             <C>                 <C>
Cash flows from operating activities:
 Net income                                                     $     48,820   $    163,862
 Adjustments to reconcile net income to net cash provided by
  operating activities:
   Depreciation and amortization                                       8,019          6,508
   Deferred tax expense                                                2,686         10,008
   Obligation under deferred compensation agreement                    6,019          6,020
 (Increase) decrease in:
   Accounts receivable                                               195,175       (104,771)
   Inventories                                                       (60,198)       (14,063)
   Prepaid expenses                                                   50,154         12,614
 Increase (decrease) in:
   Accounts payable                                                    4,882          7,896
   Accrued expenses                                                   21,340         17,925
   Taxes payable                                                       2,781        106,997
                                                                ------------   ------------

      Net cash provided by operating activities                      279,678        212,996
                                                                ------------   ------------
Cash flows from investing activities:
 Increase in cash value - life insurance policy                           --        (15,827)
   Notes receivable                                                       --          9,790
   Payments for equipment                                            (10,916)       (10,620)
                                                                ------------   ------------

      Net cash used by investing activities                          (10,916)       (16,657)
                                                                ------------   ------------
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                           EPOLIN, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    THREE MONTHS ENDED MAY 31, 2004 AND 2003

                                                                    2004           2003
                                                                ------------   ------------
<S>                                                             <C>                 <C>
Cash flows from financing activities:
 Treasury stock purchased                                                 --         (6,180)
                                                                ------------   ------------

      Net cash used by financing activities                               --         (6,180)
                                                                ------------   ------------

Increase in cash                                                     268,762        190,159

Cash and cash equivalents:
 Beginning                                                           547,930        969,477
                                                                ------------   ------------

 Ending                                                         $    816,692   $  1,159,636
                                                                ============   ============

Supplemental information:
 Income taxes paid                                              $     70,600   $         --
                                                                ============   ============
</TABLE>

        The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>



<PAGE>

                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003



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,  two  officers/stockholders  of  the  Company
controlled it.

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 in a financial institution and brokerage house
in  excess  of  the amount insured by agencies  of  the  federal
government in amounts of $216,692 and $1,059,636 at May 31, 2004
and  2003,  respectively. In evaluating this  credit  risk,  the
Company  periodically evaluates the stability of  the  financial
institution and 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 - 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  and  declining
balance  methods, based upon the estimated useful lives  of  the
various assets.

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 $8,019  and  $6,508
for the three months ended May 31, 2004 and 2003, respectively.

<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    THREE MONTHS ENDED MAY 31, 2004 AND 2003

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 three months ended May 31, 2004 are:

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                                        Epolin
                                          Epolin        Holding      Eliminations   Consolidated
                                       ------------   ------------   ------------   ------------
<S>                                    <C>              <C>           <C>             <C>
Current assets                         $  1,958,377   $    203,943   $         --   $  2,162,320
Non-current assets                        1,186,120        520,437       (717,891)       988,666
                                       ------------   ------------   ------------   ------------
   Total                               $  3,144,497        724,380       (717,891)     3,150,986
                                       ============   ============   ============   ============

  Total liabilities                         477,320        172,772       (166,283)       483,809
                                       ------------   ------------   ------------   ------------

Stockholders' equity:
 Common stock                             2,333,933             --             --      2,333,933
 Additional paid-in capital                   6,486             --             --          6,486
 Retained earnings                          618,940        551,608       (551,608)       618,940
 Treasury stock                            (292,182)            --             --       (292,182)
                                       ------------   ------------   ------------   ------------

  Total stockholders' equity              2,667,177        551,608       (551,608)     2,667,177
                                       ------------   ------------   ------------   ------------

   Total                               $  3,144,497   $    724,380   $   (717,891)  $  3,150,986
                                       ============   ============   ============   ============
</TABLE>
<TABLE>
<CAPTION>

                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                                        Epolin
                                          Epolin        Holding      Eliminations   Consolidated
                                       ------------   ------------   ------------   ------------
<S>                                    <C>              <C>           <C>             <C>
Sales                                  $    463,723   $         --   $         --   $    463,723
Other revenue                                    --         33,435        (24,435)         9,000
                                       ------------   ------------   ------------   ------------
   Total                                    463,723         33,435        (24,435)       472,723
                                       ------------   ------------   ------------   ------------

Cost of sales                               204,111             --             --        204,111
Selling, general and administrative         202,489          3,496        (24,435)       181,550
                                       ------------   ------------   ------------   ------------

   Total                                    406,600          3,496        (24,435)       385,661

Operating income                             57,123         29,939             --         87,062

Other income - interest                         844            440             --          1,284
                                       ------------   ------------   ------------   ------------

Income before taxes                          57,967         30,379             --         88,346

Income taxes                                 36,746          2,780             --         39,526
                                       ------------   ------------   ------------   ------------

Net income                             $     21,221   $     27,599   $         --   $     48,820
                                       ============   ============   ============   ============
</TABLE>


<PAGE>
                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003

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 and deferred compensation.

Stock Option Plans - The Company measures compensation cost  for
stock options using the intrinsic value method of accounting  as
prescribed by Accounting Principles Board Opinion (APB)  Opinion
No. 25, "Accounting for Stock Issued to Employees." As permitted
by FASB Statement of Financial Accounting Standards No. 123, and
explained in Note G, 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 May 31, 2004 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.

Advertising  Costs  -  Advertising costs, included  in  operating
expenses, are expensed as incurred. Advertising expenses amounted
to  $13,490 and $ 540 for the three months ended May 31, 2004 and
2003, respectively.

Regulations  -  The  Company  expended  approximately  $5,217  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.

<PAGE>

                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003

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 three months ended  May
31,  2004,  approximately 51.6% of sales were to four  customers.
Two  of  these  customers, located in the Eastern United  States,
accounted  for 39.0% of sales. During the three months ended  May
31,  2003,  approximately 52.2% of sales were to four  customers,
three  of these customers, located in the Eastern United  States,
accounted for 37.6% of sales.

NOTE D - RENTAL INCOME UNDER SUBLEASE:

The  Company entered into a sublease agreement with a non-related
party  effective  November 1, 2002 for a  five-year  term  ending
October 31, 2007. Under the terms of the lease, the tenant is  to
pay  a base rent of $36,000 per year. In addition, the tenant  is
to  reimburse the Company for all costs and expenses incurred  by
the Company for improvements to such leased property in excess of
$75,000. The excess amount was recorded on the balance sheet as a
note  receivable.  Payments  on the  note  were  $2,500  a  month
including interest of 6% a year. The note was paid in full as  of
August 31, 2003.

NOTE E - INVENTORIES:

                                        2004     2003
     Raw materials and supplies     $  42,669    46,149
     Work in process                  277,634   163,831
     Finished goods                   497,662   433,395

     Total                           $817,965   643,375


NOTE F - INCOME TAXES:
                                              2004       2003
1.  Federal and State deferred tax assets include:

  Temporary differences - principally from
    accelerated amortization of leasehold
    improvements for book purposes and
     deferred compensation                  $230,441    275,368

  Current portion                              1,376      2,198

  Non-current portion                       $229,065    273,170


<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003




NOTE F - INCOME TAXES (continued):

2.  Income tax expense:
                                                   2004     2003
     Current:
     Federal                                    $28,500    83,200
     State                                        8,340    24,200

       Total current                             36,840   107,400

  Deferred:
     Federal                                      2,124     8,200
     State                                          562     1,808

       Total deferred                             2,686    10,008

           Total                                $39,526   117,408





NOTE G - EMPLOYEE BENEFITS:

Simplified  Employee  Pension Plan  -  Effective  June  1,  1994,
covering   all  eligible  participating  employees  as   defined.
Employer  contributions totaled $10,453 and $9,959 for the  three
months ended May 31, 2004 and 2003, 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
                      MAY 31, 2004 AND 2003


NOTE G - EMPLOYEE BENEFITS (continued):

Employee  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 totaling 35,000 were cancelled in prior years. There were
no outstanding options as of May 31, 2004.

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  a  vesting period  as  follows:  (1)  none
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  for  all
prior  years  totaled 437,500. Options cancelled  for  all  prior
years totaled 75,000.

A summary of the status of the Company's 1998 stock option plan
as of May 31, 2004, and the changes during the three months ended
May 31, 2004 is presented below:


                                        Weighted-Average
Fixed Options:               Shares       Exercise Price
Balance - March 1, 2003     367,500          $ .24
  Granted                   162,000            .30
  Exercised                (137,500)           .25

Balance - February 28, 2004 392,000            .25
  Granted                        -              -
  Exercised                      -              -

Balance - May 31, 2004      392,000           $.29


Exercisable at May 31, 2004    230,000
Weighted-average fair value of
  options granted during the year   $  .25

<PAGE>




                    EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003



NOTE G - EMPLOYEE BENEFITS (continued):


The following table summarizes information about fixed stock
options outstanding at May 31, 2004:

      Outstanding Options
                Number        Weighted-average
Range of        Outstanding   Remaining
Exercise Price  at 5/31/04    Contractual Life

    $.25        205,000        2.3 years
     .30         25,000        3.5
     .35        162,000        9.7


       Exercisable Options
     Number
     Exercisable   Weighted-average
     at 5/31/04    Exercise Price

     205,000         $ .25
      25,000           .30
         -             .35


There are 458,000 options attributable to future grants.


NOTE H - TREASURY STOCK:

Consists  of 863,645 shares as of May 31, 2004 at a net  cost  of
$292,182.

The  Company made no purchases of shares during the three  months
ended May 31, 2004.

NOTE I - RESEARCH AND DEVELOPMENT:

Amounts  of $99,010 and $89,029 were included in cost  of  sales
for  the three months ended May 31, 2004 and 2003, respectively.
All costs were borne by the Company.

NOTE J - ACQUISITIONS:

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

<PAGE>

                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003



NOTE K - 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.


NOTE L - COMMITMENTS AND CONTINGENCIES:

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

LEASE OBLIGATIONS:

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


Rental   expense   charged   to   operations,   eliminated    in
consolidation,  amounted to $97,740 for the three  months  ended
May 31, 2004 and 2003, respectively.

Future minimum payments for the current option period:

   Fiscal years ending February:
             2005                $73,305
             2006                 97,740
             2007                 97,740
             2008                 97,740
             2009                 65,160

<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003


NOTE L - COMMITMENTS AND CONTINGENCIES (continued):


Deferred  Compensation  -  On December  29,  1995,  the  Company
entered  into a deferred compensation agreement with an  officer
whose additional annual compensation of $19,645 plus interest is
deferred  until  he  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 another 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.

Effective   March   1,   1999,  the  Company   adopted   deferred
compensation  agreements for two of its former  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. These agreements are no longer  operative
as  a  result  of the settlement of the lawsuit, which  had  been
instituted by such two former employees, the terms of  which  are
detailed under Note N.

Deferred  compensation of $6,020 was charged to  operations  for
the three months ended May 31, 2004 and 2003, respectively.


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  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%  on  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% on 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.


<PAGE>
                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MAY 31, 2004 AND 2003



NOTE M - STOCK DIVIDENDS:

In  February  2004, the Company's Board of Directors  declared  a
cash  dividend  of  two  cents per share  on  all  common  shares
outstanding.  The  dividend was paid  on  February  27,  2004  to
shareholders of record February 23, 2004.

NOTE N - EXTRAORDINARY ITEM:

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  included  breach   of
contract, civil rights, age discrimination, wrongful termination,
infliction  of  emotional distress and a  shareholder  derivative
claim.  In  June  2003, the Company executed an agreement,  which
settled  the  lawsuit,  and the action has  been  dismissed.  The
settlement included a lump sum payment to the plaintiffs  in  the
amount  of $312,000. In addition, the Company agreed to buy  back
126,500  shares owned by one of the plaintiffs for the  aggregate
amount  of  $69,575  ($0.55 per share)  as  treasury  stock.  The
Company  has been reimbursed a portion of the settlement payments
from its insurance company in the amount of $118,560.

The  lump  sum  payment  resulted in  an  extraordinary  loss  of
$110,261, net of income tax benefit of $83,179.