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 May 31, 2003

     [ ] 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: 11,876,855 outstanding
     as of May 31, 2003 (excluding 689,645 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 Company's 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, 2003.  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 May 31, 2003, the Company reported
sales   of  approximately  $687,000  as  compared  to  sales   of
approximately $698,000 during the quarter ended May 31,  2002,  a
decrease of approximately $11,000 or 1.6%.

     Operating  income for the three months ended  May  31,  2003
decreased  to  approximately $266,000, as compared  to  operating
income  of approximately $325,000 for the three months ended  May
31,  2002,  a decrease of approximately $59,000.  This change  was
due   primarily   to   an  increase  in  selling,   general   and
administrative expenses for the three months ended May  31,  2003
as  compared to the three months ended May 31, 2003.  During  the
three  months ended May 31, 2003, the Company's selling,  general
and  administrative  expenses  were  approximately  $193,000,  as
compared  to  selling,  general and  administrative  expenses  of
approximately $139,000 for the three months ended May  31,  2002.
Such  increase  was  primarily due to an increase  in  legal  and
accounting fees and increases in consulting fees.  Cost of  sales
for  the  three  months  ended  May 31,  2003  was  approximately
$228,000,  as  compared to cost of sales during the three  months
ended May 31, 2002 of approximately $234,000.

     During  the  three  months ended May 31, 2003,  the  Company
realized  approximately $3,000 in interest income as compared  to
approximately $6,000 in interest income for the comparable period
of the prior fiscal year.

     During  the quarter ended May 31, 2003, the Company reported
income  before  taxes of approximately $281,000  as  compared  to
income  before  taxes  of approximately $337,000  for  the  three
months   ended  May  31,  2002.   Net  income  after  taxes   was
approximately  $164,000 or $.01 per share for  the  three  months
ended  May  31,  2003 as compared to net income  after  taxes  of
approximately  $197,000 or $.02 per share for  the  three  months
ended May 31, 2002.

Liquidity and Capital Resources

     On  May  31,  2003,  the  Company  had  working  capital  of
approximately   $2,114,000,  an   equity   to   debt   ratio   of
approximately  4.2 to 1, and stockholders equity of approximately
$2,733,000.   On  May  31,  2003, the Company  had  approximately
$1,160,000  in  cash  and  cash  equivalents,  total  assets   of
approximately  $3,387,000 and total liabilities of  approximately
$654,000.

     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  2004
approximately $55,000 in renovation costs to improve the exterior
of its facility in Newark, New Jersey.  Other than the foregoing,
the  Company  does  not anticipate making any  other  significant
capital  expenditures in fiscal 2004 as it believes  its  present
machinery  and  equipment,  in  conjunction  with  the   interior
renovations previously done to its facility in Newark, New Jersey
in fiscal 2003, will be sufficient to meet its near term needs.

      Inflation has not significantly impacted the Company's
operations.

      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  Company's
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.

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 28, 2003, a total of 32,500
shares  were repurchased at a cumulative cost of $18,624.  During
the   three  months  ended  May  31,  2003,  10,000  shares  were
repurchased at a cumulative cost of $6,180.   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  the fiscal year ended February 28, 2003, the Company
paid  two cash dividends, the first being $.04 per share in  July
2002  and  the second being $.03 per share in January 2003.   The
Company  anticipates that it will pay another dividend in  August
2003.   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.


Item 3.   Controls and Procedures.

     The  Company's  Chief Executive Officer and Chief  Financial
Officer   have  evaluated  the  effectiveness  of  the  Company's
disclosure  controls and procedures (as such term is  defined  in
Rules  13a-14(c) and 15d-14(c) under the Securities Exchange  Act
of  1934, as amended (the "Exchange Act")) as of a date within 90
days prior to the filing date of this quarterly report. Based  on
such  evaluation, such officers have concluded that the Company's
disclosure controls and procedures are effective in alerting them
on a timely basis to material information relating to the Company
(including its consolidated subsidiaries) required to be included
in  the Company's periodic filings under the Exchange Act.  There
have  not  been any significant changes in the Company's internal
controls or in other factors that could significantly affect such
controls subsequent to the date of this evaluation.

<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 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 terms 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).   All   such
settlement  payments have been made, and the 126,500 shares  have
been  bought back.  The Company will be reimbursed a  portion  of
the  settlement  payments from its insurance  company  which  has
agreed,  subject  to its final review of the executed  settlement
documents,  to  reimburse  the  Company  approximately  $125,000.
Although the Company has denied and continues to deny all  claims
asserted  in  the lawsuit, Management determined, in  conjunction
with advice of counsel, that it was in the best interests of  the
Company and its stockholders to settle the action on the terms as
agreed   taking  into  account  various  factors  including   the
uncertainty  and risks inherent in any litigation.   The  Company
does  not  believe that the terms of the settlement  will  likely
have  a  material  adverse effect on its 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 May 31, 2003.

             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: July 15, 2003           By: /s/ Murray S. Cohen
                                       Murray S. Cohen,
                                       Chairman of the Board
                                       and Chief Executive
                                       Officer



Dated: July 15, 2003           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  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
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
indicated  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: July 15, 2003                /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
indicated  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: July 15, 2003          /s/ James Ivchenko
                                 James Ivchenko
                                 President (Principal Financial
                                 Officer)

<PAGE>



                   EPOLIN, INC. AND SUBSIDIARY

                      FINANCIAL STATEMENTS

                 THREE MONTHS ENDED MAY 31, 2003
                        AND MAY 31, 2002

<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                   8 - 16
Statements



<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 May 31, 2003 and 2002 and the
related  Consolidated Statements of Income, Stockholders'  Equity
and Cash Flows for the three 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  May  31,
2003  financial statements in order for them to be in  conformity
with generally accepted accounting principles.


IWA FINANCIAL CONSULTING LLC

July 7, 2003

<PAGE>
                           EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                May 31,
                                                        ------------------------
Current assets:                                            2003          2002
                                                        ----------    ----------
  Cash and cash equivalents                             $1,159,636     1,627,451
  Accounts receivable                                      476,232       401,804
  Inventories                                              643,375       632,468
  Notes receivable                                           4,349            --
  Prepaid expenses                                         128,368        27,878
  Deferred tax assets-current portion                        2,198         1,758
                                                        ----------    ----------

     Total current assets                                2,414,158     2,691,359
                                                        ----------    ----------

Plant, property and equipment - at cost:
  Land                                                      81,000        81,000
  Building                                                 369,000       369,000
  Machinery and equipment                                  226,081       216,527
  Furniture and fixtures                                    12,223        12,223
  Leasehold improvements                                   560,400       484,221
                                                        ----------    ----------

     Total                                               1,248,704     1,162,971

Less:  Accumulated depreciation and amortization           693,928       667,165
                                                        ----------    ----------

     Net plant, property and equipment                     554,776       495,806
                                                        ----------    ----------

Other assets:
  Deferred tax assets-non current portion                  273,170       284,817
  Cash value - life insurance policy                       144,413       116,815
                                                        ----------    ----------

     Total other assets                                    417,583       401,632
                                                        ----------    ----------

     Total                                              $3,386,517     3,588,797
                                                        ==========    ==========


        The accompanying notes are an integral part of these statements.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                            May 31,
                                                                    -----------------------
                                                                       2003         2002
                                                                    ----------   ----------
<S>                                                                 <C>              <C>
Current liabilities:
  Accounts payable                                                  $   14,306       12,384
  Accrued expenses                                                     176,847       39,896
  Taxes payable:
    Payroll                                                              1,737        2,532
    Income                                                             107,400      173,525
                                                                    ----------   ----------

    Total current liabilities                                          300,290      228,337
                                                                    ----------   ----------

Other liabilities:
  Deferred compensation                                                353,578      329,499
  Loans payable-officers                                                    --           --
                                                                    ----------   ----------

    Total other liabilities                                            353,578      329,499
                                                                    ----------   ----------

        Total liabilities                                              653,868      557,836
                                                                    ----------   ----------

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;
    12,566,500 and 12,529,000 shares issued and outstanding
    at 2003 and 2002, respectively                                   2,304,558    2,295,183
  Paid-in capital                                                        6,486        6,486
  Retained earnings                                                    616,562      899,445
                                                                    ----------   ----------

        Total                                                        2,927,606    3,201,114
  Less: Treasury stock-at cost                                         194,957      170,153
                                                                    ----------   ----------

    Total stockholders' equity                                       2,732,649    3,030,961
                                                                    ----------   ----------

    Total                                                           $3,386,517    3,588,797
                                                                    ==========   ==========
</TABLE>

        The accompanying notes are an integral part of these statements.



<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                    THREE MONTHS ENDED MAY 31, 2003 AND 2002



                                                          2003          2002
                                                       -----------   -----------

Sales                                                  $   686,767       698,356
                                                       -----------   -----------

Cost of sales and expenses:
  Cost of sales                                            227,751       234,447
  Selling, general and administrative                      192,588       139,194
                                                       -----------   -----------

     Total                                                 420,339       373,641
                                                       -----------   -----------

Operating income                                           266,428       324,715
                                                       -----------   -----------

Other income:
  Rental income                                             12,000            --
  Interest                                                   2,842         6,088
  Gain on sale of assets                                        --         6,200
                                                       -----------   -----------
     Total other income                                     14,842        12,288
                                                       -----------   -----------

Income before taxes                                        281,270       337,003

Income taxes                                               117,408       139,521
                                                       -----------   -----------

Net income                                             $   163,862       197,482
                                                       ===========   ===========


Per share data:
  Basic earnings per common share                             0.01          0.02
                                                       ===========   ===========

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

  Weighted average number of common shares outstanding  11,878,485    11,881,855
                                                       ===========   ===========


        The accompanying notes are an integral part of these statements.



<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                    THREE MONTHS ENDED MAY 31, 2003 AND 2002


<TABLE>
<CAPTION>
                                           Additional      Retained
                              Common        Paid-in-       Earnings       Treasury      Stockholders'
                              Stock         Capital        Deficit          Costs          Equity
                           ------------   ------------   ------------   ------------    ------------
<S>                        <C>                   <C>          <C>           <C>            <C>
Balance - March 1, 2002    $  2,295,183          6,486        701,963       (170,153)      2,833,479

Net income                           --             --        197,482             --         197,482
                           ------------   ------------   ------------   ------------    ------------

Balance - May 31, 2002     $  2,295,183          6,486        899,445       (170,153)      3,030,961
                           ============   ============   ============   ============    ============



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
                           ============   ============   ============   ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.



<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    THREE MONTHS ENDED MAY 31, 2003 AND 2002


<TABLE>
<CAPTION>
                                                                   2003          2002
                                                                ----------    ----------
<S>                                                             <C>              <C>
Cash flows from operating activities:
  Net income                                                    $  163,862       197,482
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                   6,508         6,266
     Deferred tax expense                                           10,008         4,221
     Obligation under deferred compensation agreement                6,020         6,019
     Gain on sale of assets                                             --        (6,200)
  (Increase) decrease in:
     Accounts receivable                                          (104,771)      (35,969)
     Inventories                                                   (14,063)       10,169
     Prepaid expenses                                               12,614        13,252
     Notes receivable                                                9,790            --
  Increase (decrease) in:
     Accounts payable                                                7,896        (8,190)
     Accrued expenses                                               17,925      (109,510)
     Taxes payable                                                 106,997        65,711
                                                                ----------    ----------

        Net cash provided by operating activities                  222,786       143,251
                                                                ----------    ----------

Cash flows from investing activities:
  Increase in cash value - life insurance policy                   (15,827)       (5,885)
  Sale of equipment                                                     --         8,000
  Payments for equipment                                           (10,620)      (35,790)
                                                                ----------    ----------

         Net cash used by investing activities                     (26,447)      (33,675)
                                                                ----------    ----------
</TABLE>

        The accompanying notes are an integral part of these statements.



<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    THREE MONTHS ENDED MAY 31, 2003 AND 2002



                                                       2003             2002
                                                    -----------      -----------
Cash flows from financing activities:
  Treasury stock purchased                               (6,180)              --
                                                    -----------      -----------

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

Increase (decrease) in cash                             190,159          109,576

Cash and cash equivalents:
  Beginning                                             969,477        1,517,875
                                                    -----------      -----------

  Ending                                            $ 1,159,636        1,627,451
                                                    ===========      ===========

Supplemental information:
  Income taxes paid                                 $        --           70,477
                                                    ===========      ===========


        The accompanying notes are an integral part of these statements.



<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 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 $1,059,640 and $1,511,536 at  May  31,
2003 and 2002, 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 - 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  on  the  straight-line and declining balance  methods,
based upon the estimated useful lives of the assets.

Depreciation and amortization expense totaled $6,508  and  $6,266
for the three months ended May 31, 2003 and 2002, respectively.

<PAGE>


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



                      CONDENSED CONSOLIDATING BALANCE SHEET

<TABLE>
<CAPTION>
                                                   Epolin
                                    Epolin         Holding      Eliminations    Consolidated
                                 ------------    ------------   ------------    ------------
<S>                              <C>                  <C>           <C>            <C>
Current assets                   $  2,312,519         101,639             --       2,414,158
Non-current assets                  1,070,978         493,929       (592,548)        972,359
                                 ------------    ------------   ------------    ------------
    Total                        $  3,383,497         595,568       (592,548)      3,386,517
                                 ============    ============   ============    ============

      Total liabilities               650,848         151,689       (148,669)        653,868
                                 ------------    ------------   ------------    ------------

Stockholders' equity:
  Common stock                      2,304,558              --             --       2,304,558
  Additional paid-in capital            6,486              --             --           6,486
  Retained earnings                   616,562         443,879       (443,879)        616,562
  Treasury stock                     (194,957)             --             --        (194,957)
                                 ------------    ------------   ------------    ------------

    Total stockholders' equity      2,732,649         443,879       (443,879)      2,732,649
                                 ------------    ------------   ------------    ------------

      Total                      $  3,383,497         595,568       (592,548)      3,386,517
                                 ============    ============   ============    ============
</TABLE>


                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

<TABLE>
<CAPTION>
                                                       Epolin
                                         Epolin        Holding      Eliminations    Consolidated
                                      ------------   ------------   ------------    ------------
<S>                                   <C>                  <C>           <C>             <C>
Sales                                 $    686,767             --             --         686,767
Other revenue                                   --         36,435        (24,435)         12,000
                                      ------------   ------------   ------------    ------------
    Total                                  686,767         36,435        (24,435)        698,767
                                      ------------   ------------   ------------    ------------

Cost of sales                              227,751             --             --         227,751
Selling, general and administrative        213,772          3,251        (24,435)        192,588
                                      ------------   ------------   ------------    ------------

    Total                                  441,523          3,251        (24,435)        420,339

Operating income                           245,244         33,184             --         278,428

Other income - interest                      2,450            392             --           2,842
                                      ------------   ------------   ------------    ------------

Income before taxes                        247,694         33,576             --         281,270

Income taxes                               114,388          3,020             --         117,408
                                      ------------   ------------   ------------    ------------

Net income                            $    133,306         30,556             --         163,862
                                      ============   ============   ============    ============
</TABLE>


<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 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  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 May 31, 2003 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  $ 540 and $1,235 for the three months ended May 31, 2003  and
2002, respectively.

Regulations  -  The  Company  expended  approximately  $6,043  to
maintain  compliance  with certain Federal  and  State  and  City
government  regulations  relative  to  the  production  of   near
infrared dyes and specialty chemicals.

<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 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,  2003,  approximately 42.2% of sales were to four  customers.
Three  of these customers, located in the Eastern United  States,
accounted for 37.6% of sales for the three months ended  May  31,
2003.  During  the three months ended May 31, 2002, approximately
54.6%  of  sales  were  to four customers, three  of  which  were
located  in the Eastern United States and accounted for 43.6%  of
sales for the three months ended May 31, 2002.

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 is recorded on the balance sheet as  a
note receivable, payable $2,500 a month including interest of  6%
a year.

NOTE E - INVENTORIES:

                                    2003     2002
Raw materials and supplies     $  46,149    66,333
Work in process                  163,831   130,537
Finished goods                   433,395   435,598

     Total                      $643,375   632,468

NOTE F - INCOME TAXES:
                                             2003       2002
1.  Federal and State deferred tax assets include:

Temporary differences - principally from
accelerated amortization of leasehold
improvements for book purposes and
deferred compensation                      $275,368    286,575

Current portion                               2,198      1,758

Non-current portion                        $273,170    284,817


<PAGE>


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


NOTE F - INCOME TAXES (continued):

2.  Income tax expense:

                                            2003      2002
     Current:
     Federal                              $83,200   104,770
     State                                 24,200    30,530

       Total current                      107,400   135,300

  Deferred:
     Federal                                8,200     3,338
     State                                  1,808       883

       Total deferred                      10,008     4,221

           Total                         $117,408   139,521


NOTE G - EMPLOYEE BENEFITS:

Simplified  Employee  Pension Plan  -  Effective  June  1,  1994,
covering   all  eligible  participating  employees  as   defined.
Employer  contributions totaled $9,959 and $6,607 for  the  three
months ended May 31, 2003 and 2002, 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.

Employee  Option Plan - The Company previously adopted  The  1986
Stock  Option  Plan. As of April 1996, no options  were  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 May 31, 2003.

<PAGE>

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


NOTE G - EMPLOYEE BENEFITS (continued):

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 totaling 400,000  were
exercised throughout the year ended February 28, 2003.

No options were exercised during the current quarter.


Options granted as of May 31, 2003:

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
 25,000     $.30     December 1, 2002   December 1, 2007


There are 620,000 options attributable to future grants.

NOTE H - TREASURY STOCK:

Consists  of 689,645 shares as of May 31, 2003 at a net  cost  of
$194,957.

The  Company  made  purchases of 10,000 shares during  the  three
months ended May 31, 2003.

NOTE I - RESEARCH AND DEVELOPMENT:

Amounts  of $89,029 and $68,160 were included in cost  of  sales
for  the three months ended May 31, 2003 and 2002, respectively.
All costs were borne by the Company.

<PAGE>

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


NOTE J - ACQUISITIONS:

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

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:


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.

Rental   expense   charged   to   operations,   eliminated    in
consolidation,  amounted to $24,435 for the three  months  ended
May 31, 2003 and 2002, respectively.

Future minimum payments for the current option period:

   Fiscal years ending February:
             2004                $73,305
             2005                 97,740
             2006                 97,740
             2007                 97,740
             2008                 65,160


<PAGE>


                   EPOLIN, INC. AND SUBSIDIARY
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 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. 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. 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
Subsequent Events.

Deferred  compensation of $6,020 was charged to  operations  for
the three months ended May 31, 2003 and 2002, 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, 2003


NOTE L - COMMITMENTS AND CONTINGENCIES (continued):


SUBSEQUENT EVENT:

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 terms 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).   All   such
settlement  payments have been made, and the 126,500 shares  have
been bought back. The Company will be reimbursed a portion of the
settlement payments from it's insurance company which has agreed,
subject to its final review of the executed settlement documents,
to reimburse the company approximately $125,000. The Company does
not  believe that the terms of the settlement will likely have  a
material  adverse effect on its 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.