================================================================================

                       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 March 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 0-8161


                                  DIONICS, INC.
        (Exact name of Small Business Issuer as Specified in its Charter)


Delaware                                                            11-2166744
(State or Other Jurisdiction                                  (I.R.S. Employer
of Incorporation or                                             Identification
Organization)                                                          Number)

                               65 Rushmore Street
                            Westbury, New York 11590
                    (Address of Principal Executive Offices)

                                 (516) 997-7474
                (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 |_| No |X|

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date:

             Common, $.01 par value per share: 3,683,678 outstanding
              as of May 1, 2004 (excluding 164,544 treasury shares)

================================================================================
<PAGE>

                                EXPLANATORY NOTE

      Dionics, Inc. is filing this Amendment No. 1 on Form 10-QSB/A (the
"Amendment") to its Quarterly Report on Form 10-QSB for the quarterly period
ended March 31, 2004 (the "Original Report") to replace the financial statements
included in the Original Report with the financial statements attached to the
Amendment. The Amendment does not amend, update, or change any other items or
disclosures contained in the Original Report.
<PAGE>

                                  DIONICS, INC.
                              FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003

<PAGE>

                                  DIONICS, INC.
                          INDEX TO FINANCIAL STATEMENTS


Contents                                                                    Page

Balance Sheet at March 31, 2004 and December 31, 2003                        2

Statements of Operations for the quarters
ended March 31, 2004 and 2003                                                4

Statements of Cash Flows for the quarters
ended March 31, 2004 and 2003                                                5

Notes to Financial Statements                                                6
<PAGE>

                                  DIONICS, INC.
                                  BALANCE SHEET


                                     ASSETS

                                                    MARCH 31,       DECEMBER 31,
                                                      2004              2003
                                                      ----              ----
                                                   (Unaudited)       (Audited)

Current assets:

Cash                                               $   39,900       $   13,300
Trade accounts receivable, net                         83,600           54,400
Inventories                                           309,500          368,500
Prepaid expenses                                       12,800           24,300
                                                   ----------       ----------

Total current assets                                  445,800          460,500

Property and equipment, net                            69,000           70,800

Other assets:

Deferred mortgage fees and other assets                36,500           39,700

Total Assets                                       $  551,300       $  571,000
                                                   ==========       ==========

The accompanying notes are an integral part of the financial statements.


                                        2
<PAGE>

                                  DIONICS, INC.
                                  BALANCE SHEET
                                   (Continued)

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                     MARCH 31,      DECEMBER 31,
                                                       2004             2003
                                                       -----            ----
                                                    (Unaudited)      (Audited)

Current liabilities:

Accounts payable                                    $    98,900     $   137,200
Accrued expenses                                         68,300          36,300
Current maturities of long term debt                      8,700          46,300
                                                    -----------     -----------

Total current liabilities                               175,900         219,800

Notes Payable-Non current:
Long-Term Debt less Current Maturities                  672,300         670,900
Deferred Compensation Payable                           501,000         501,000
                                                    -----------     -----------

Total Liabilities                                     1,349,200       1,391,700

Stockholders' deficit:

Common stock par value $.01; 5,000,000 shares
  authorized, 3,848,222 issued and
  outstanding on March 31, 2004 and
  December 31, 2003                                      38,400          38,400
Additional paid in capital                            1,522,800       1,522,800
Accumulated deficit                                  (2,138,500)     (2,161,300)
Less: Treasury Stock at Cost
  164,544 Shares                                       (220,600)       (220,600)
                                                    -----------     -----------

Total stockholders' deficit                            (797,900)       (820,700)
                                                    -----------     -----------

Total liabilities andstockholders' deficit          $   551,300     $   571,000
                                                    ===========     ===========

The accompanying notes are an integral part of the financial statements.


                                        3
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

                                                         Three Months Ended
                                                              March 31,
                                                       2004             2003
                                                       ----             ----

Sales                                              $   366,500      $   163,100
Cost of sales                                          249,200          160,000
                                                   -----------      -----------

Gross Profit                                           117,300            3,100

Other costs:
Selling, general and Administration                     86,100           86,800
                                                   -----------      -----------

Total other costs                                       86,100          (86,800)
                                                   -----------      -----------

Gain (Loss) from operations                             31,200          (83,700)

Other income and (expense):

Interest income                                             --            1,200
Interest expense                                        (7,600)         (11,300)
                                                   -----------      -----------

Net gain (loss) for the period before
  income taxes                                          23,600          (93,800)

Income tax expense                                      (4,240)            (800)
Benefit of Income tax carryforward                       3,440               --
                                                   -----------      -----------

Net gain (loss)                                         22,800      $   (94,600)
                                                   ===========      ===========

Basic gain (loss) per common share                 $      .006      $     (.026)
                                                   ===========      ===========

Weighted average number
  of common shares outstanding                       3,683,678        3,683,678
                                                   ===========      ===========

The accompanying notes are an integral part of the financial statements.


                                        4
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

                                                            Three Months Ended
                                                                March 31,
                                                            2004         2003
                                                            ----         ----
Cash flows from operating activities:

Net income(loss)                                         $ 22,800     $ (94,600)
Adjustments to reconcile
  net income to net cash provided
  by operating activities:

Depreciation and amortization                               2,600         1,600

Change in assets and liabilities:
Accounts receivables                                      (29,200)       20,400
Prepaid expenses                                           11,500       (18,300)
Inventories and parts                                      59,000       (15,000)
Other assets                                                2,400           800
Accounts payable                                          (38,300)      (34,700)
Accrued expenses                                           32,000        40,100
Deferred Compensation                                          --       255,800
                                                         --------     ---------

Net cash provided by operations                          $ 62,800     $ 156,100

Cash f1ows in investing activities:
  Purchase of Equipment                                        --       (10,400)
                                                         --------     ---------

Net cash provided (used) in investing activities               --       (10,400)

Cash flows (used in) financing activities:
Repayment of debt                                         (36,200)      (21,700)
                                                         --------     ---------
Net cash used in financing activities                     (36,200)      (21,700)

Net increase in cash                                       26,600       124,000

Cash- beginning of period                                  13,300        28,200
                                                         --------     ---------

Cash- end of period                                      $ 39,900     $ 152,200
                                                         ========     =========

The accompanying notes are an integral part of the financial statements.


                                        5
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of Financial Statements

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 reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Cash and cash equivalents.

Holdings of highly liquid investments with maturities of three months or less,
when purchased, are considered to be cash equivalents. The carrying amount
reported in the balance sheet for cash and cash equivalents approximates its
fair values. The amount of federally insured cash deposits was $39,900 as of
March 31, 2004 and $13,300 on December 31, 2003

Fair Values of Financial Instruments.

The carrying amount of trade accounts receivable, accounts payable, prepaid and
accrued expenses, bonds and notes payable, and amounts due to shareholders, as
presented in the balance sheet, approximates fair value.

Accounts Receivable

Accounts for which no payments have been received for three consecutive months
are considered delinquent and a reserve is setup for them. Customary collection
efforts are initiated and an allowance for uncollectible accounts is set up and
the related expense is charged to operations.

Inventories

Inventories are stated at the lower of cost (which represents cost of materials
and manufacturing costs on a first-in, first-out basis) or market. Cost is
determined principally on the average actual cost method. Finished goods and
work-in-process inventories include material, labor, and overhead costs. Factory
overhead costs are allocated to inventory manufactured in-house based upon cost
of materials. Dionics monitors usage reports to determine if the carrying value
of any items should be adjusted down due to lack of demand for the item. Dionics
adjusts down the inventory for estimated obsolescence or unmarketable inventory
equal to difference between the cost of inventory and the estimated market value
based upon assumptions about future demand and market conditions. If actual
market conditions are less favorable than those projected by management,
additional inventory write-down may be required.

Inventories are comprised of the following:


                                               March 31,   December 31,
                                                 2004          2003
                                                 ----          ----
                                                           (Audited)
                                                           ---------

             Raw materials (net of reserves)   $ 49,600     $ 76,700
             Work in process                    179,500      216,000
             Manufacturing Supplies              34,000       42,700

             Finished goods                      46,400       33,100
                                               --------     --------

             Total                             $309,500     $368,500
                                               ========     ========


                                        6
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Notes Payable

The Company accounts for all note liabilities that are due and payable in one
year as short-term notes.

Long-Lived Assets- Property, Plant And Equipment

These assets are recorded at cost less depreciation and amortization.
Depreciation and amortization are accounted for on the straight-line method
based on estimated useful lives. The amortization of leasehold improvements is
based on the shorter of the lease term or the life of the improvement.
Betterments and large renewals, which extend the life of the asset, are
capitalized whereas maintenance and repairs and small renewals are expenses, as
incurred. The estimated useful lives are: machinery and equipment, 7-15 years;
buildings, 30 years; and leasehold improvements, 10-20 years.

Deferred Compensation Plan

Future payments required under a plan of deferred compensation adopted in 1987,
and revised in 2000, as well as interest accrued thereon have been charged to
operations over the period of expected service.

Bad Debt

The Company maintained an allowance for doubtful accounts of $7,300 at March 31,
2004 and December 31, 2003..

Deferred Mortgage Costs

Costs related to the new First Union Business Capital Mortgage and prior costs
related to the paid off mortgage with D.A.N. Joint Venture are being amortized
over ten years as follows:

                                          March 31,    December 31,
                                            2004           2003
                                            ----           ----
                                                        (Audited)
                                                        ---------

             Cost                         $ 52,000      $ 52,000
             Accumulated Amortization      (17,200)      (16,400)
                                          --------      --------

                                          $ 34,800      $ 35,600
                                          ========      ========

Amortization for the quarter ended March 31, 2004 was $800 and $3,300 for the
year ended December 31, 2003.

Major Customers

In the first quarter ended March, 31, 2004, approximately $148,000, 40% of total
sales were to our largest customer, Advanced Manufacturing Corporation.


                                        7
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

Net Gain/Loss Per Common share

Basic earnings per share ("EPS") are computed based on the weighted average
number of common shares outstanding for the period. Diluted EPS gives effect to
all dilutive potential shares outstanding (i.e., options and warrants) during
the period. The assumed exercise of outstanding stock options have been excluded
from the calculations of loss per share as their effect is anti-dilutive, in
2003.

For the quarter ended March 31, 2004, basic gain per share of Dionics, Inc. was
$.006 per share. For the year 2003 basic loss per share of Dionics, Inc. was
$(.08) per share.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

Recently Issued Accounting Standards

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - An Amendment
of ARB Opinion No. 43, Chapter 4" ("SFAS 151"). SFAS 151 amends the guidance in
ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted
material (spoilage). Among other provisions, the new rule requires that items
such as idle facility expense, excessive spoilage, double freight, and
rehandling costs be recognized as current period charges regardless of whether
they meet the criterion of "so abnormal" as stated in ARB No. 43. Additionally,
SFAS 151 requires that the allocation of fixed production overheads to the costs
of conversion be based on the normal capacity of the production facilities. SFAS
151 is effective for fiscal years beginning after June 15, 2005. We have
considered SFAS 151 and have determined that this pronouncement will not
materially impact our consolidated results of operations.

In December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
Payment" ("SFAS 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") and supercedes APB Opinion No. 25, "Accounting for
Stock Issued to Employees. "SFAS 123R requires that all share-based payments to
employees, including grants of employee stock options, be recognized in the
financial statements based on their fair values, beginning with the first
interim or annual period after June 15, 2005, with early adoption encouraged.
The pro forma disclosures previously permitted under SFAS 123, no longer will be
an alternative to financial statement recognition. We are required to adopt SFAS
123R in the third quarter of 2005. Under SFAS 123R, we must determine the
appropriate fair value model to be used in valuing share-based payments, the
amortization method for compensation cost and the transition method to be used
at the date of adoption. Upon adoption, we may choose from two transition
methods: the modified-prospective transition approach or the
modified-retroactive transition approach. Under the modified-prospective
transition approach we would be required to recognize compensation cost for
awards that were granted prior to, but not vested as of the date of adoption.
Prior periods remain unchanged and pro forma disclosures previously required by
SFAS No. 123 continue to be required.


                                        8
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Standards  (Continued)

Under the modified-retrospective transition method, we would be required to
restate prior periods by recognizing compensation cost in the amounts previously
reported in the pro forma disclosure under SFAS No. 123. Under this method, we
would be permitted to apply this presentation to all periods presented or to the
start of the fiscal year in which SFAS No. 123R is adopted. We would also be
required to follow the same guidelines as in the modified-prospective transition
method for awards granted subsequent to adoption and those that were granted and
not yet vested. We are currently evaluating the requirements of SFAS 123R and
its impact on our consolidated results of operations and earnings per share. We
have not yet determined the method of adoption or the effect of adopting SFAS
123R, and it has not been determined whether the adoption will result in amounts
similar to the current pro forma disclosures under SFAS 123.

NOTE 2. DESCRIPTION OF BUSINESS

Background

Dionics, Inc., a Delaware corporation, is located at 65 Rushmore Street,
Westbury, NY. Dionics, Inc., designs, manufactures and sells silicon
semi-conductor electronic products, individual discrete components,
multi-component integrated circuits and multi-component hybrid circuits.

NOTE 3. TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable were as follows:

                                                March 31,    December 31,
                                                  2004           2003
                                                  ----           ----
                                                              (Audited)
                                                              ---------

      Trade accounts receivable                 $ 90,900      $ 61,700
      Less: allowance for doubtful accounts       (7,300)       (7,300)
                                                --------      --------

      Trade accounts receivable, net            $ 83,600      $ 54,400
                                                ========      ========

At March 31, 2004 and December 31, 2003 trade accounts receivable were pledged
as collateral in connection with bank loans.

There was no bad debt expense for the periods ended March 31, 2004 and December
31, 2003.


                                       9
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

                                                     March 31,     December 31,
                                                       2004            2003
                                                       ----            ----
                                                                    (Audited)
                                                                    ---------

     Equipment                                      $ 1,199,700    $ 1,199,700
     Building                                           122,000        122,000
     Furniture and Fixtures                             233,300        233,300
     Leasehold Improvements                             169,400        169,400

     Land                                                40,000         40,000
                                                    -----------    -----------
                                                      1,764,500      1,764,400

         Less: accumulated depreciation              (1,695,400)    (1,693,600)
                                                    -----------    -----------

         Net property, plant, and equipment         $    69,000    $    70,800
                                                    ===========    ===========

Depreciation expenses for the quarter ended March 31, 2004 and for the year
ended December 31, 2003 were $1,800 and $6,700, respectively.

NOTE 5. DEFERRED COMPENSATION PAYABLE

In 1987 we entered into an agreement, amended in 1997 and 1999, which provides
for a 72-month schedule of payments to our chief executive officer.

In connection with the refinancing of the Wachovia Small Business Capital
(formerly First Union Small Business Capital), a modified deferred compensation
payment schedule commencing January 1, 1999 was agreed to by us and our chief
executive officer.

We have executed a mortgage subordinate to the existing first and second
mortgage secured by land and building at 65 Rushmore Street, Westbury, NY in
favor of the chief executive officer to insure amounts due him on the deferred
compensation agreement.

A new 72-month schedule consists of a 24-month period of reduced consecutive
monthly payments, to be followed by an 18-month period of no payments except for
monthly interest. At the end of the 42nd month, the total of the delayed
payments becomes due followed by 30 months of principal and interest payments.

Notwithstanding the above schedule for payments, other than a life insurance
policy to cover death benefits, we have not specifically designated funds with
which to meet these payment requirements. In view of its continuing total
indebtedness as well as our need for operating capital, there can be no
assurance that we will be able to satisfy the terms of this new agreement in
full or in part. Should such unfavorable circumstances occur, the terms of the
agreement may have to again be renegotiated to better match our then -current
financial circumstances.

Under the standby agreement of the SBA Loan the chief executive will take no
action on the deferred compensation unless authorized by the lender.

The previously mentioned life insurance policy had a cash surrender value at
March 31, 2004 of $122,700 and is shown net of loans in the amount of $121,300
under other assets.


                                       10
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6. LONG-TERM DEBT

As of March 31, 2004 and December 31, 2003, our long-term debt includes a
mortgage and notes payable as follows:

                                                    March 31,       December 31,
                                                      2004              2003
                                                      ----              ----
                                                                     (Audited)
                                                                     ---------

Mortgage payable (a)                               $ 367,400          $ 368,000
Term loans                                                --             35,000
Lease                                                  7,800              8,400
SBA - Loan (a)                                       305,800            305,800
                                                   ---------          ---------
                                                     681,000            717,200

Less: current maturities                              (8,700)           (42,400)
                                                   ---------          ---------

                                                   $ 672,300          $ 674,800
                                                   =========          =========

(a) - these mortgage amounts were paid off in April 2005 with the sale of the
building

As of December 31, 2003, principal payments over the next five years and in
total are:

                        Year         Payments
                        ----         --------

                        2004         $ 42,400
                        2005           63,600
                        2006           66,300
                        2007           69,500
                        2008           70,100
                     After 2008       405,300
                                     --------
                                     $717,200
                                     ========

Mortgage Payable

In 1998, a loan agreement was entered into between us and Wachovia Small
Business Capital (formerly the First Union Business Capital). The loan amount
was $384,700 which requires 360 monthly self-liquidating payments in the amount
of $2,900. Interest is calculated on the unpaid principal balance at an initial
rate of 8.23% per annum. The interest rate on the loan is variable depending on
an independent index related to the yield of United States Treasury Notes. This
rate change will occur once every 60 months.

Term loans agreements with D.A.N. Joint Venture, dated 1999, were restructured
and replaced by a new term loan in the principal amount of $283,900, ("Term Loan
A") structured over two five-year periods. During the first five-year period
ended March 31, 1999 the Company paid interest only. During the second five-year
period commencing April 1, 1999, the balance due was to be repaid over 60 equal
monthly installments, plus interest at prime plus two percent on the unpaid
balance. The monthly payments are $6,423. The principal balance as of December
31, 2003 was $22,000.


                                       11
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6. LONG-TERM DEBT (Continued)

Term Loans

D.A.N. Joint Venture and the Company also re-financed and amount of $167,500
stemming from the original mortgage amount, (Term Loan - C). Term Loan - C, is
structured over two five-year periods, subject to the same terms noted above in
Term Loan - A. The principal balance as of December 31, 2003 was $13,000.
Monthly payments for this loan are $3,800.

Small Business Administration Loan

On October 20, 2002, the Company was approved with the Small Business
Administration for a loan in the amount of $305,800. Interest will accrue at the
rate of 4% per annum. Monthly payments of $5,600 will begin 25 months from the
date of the promissory note. Each payment will be applied first to interest
accrued to the date of receipt of each payment, and the balance, if any, will be
applied to the principal. Interest will accrue only on funds actually advanced
from the date of each advance, but in no case sooner than 24 months from the
date of the promissory note. Dionics, Inc. will provide the deed of
trust/mortgage on real estate located at 65 Rushmore Street, Westbury, NY 11590,
as collateral.

NOTE 7. COLLATERIALIZED ASSETS

The Wachovia Small Business Capital and the SBA Loans are secured by a First
Mortgage and a Second Mortgage, respectively on the Company's Westbury Property.
All of the Company's assets other than the Westbury Property, are pledged to the
remaining loans due to D.A.N. Joint Venture.

NOTE 8. STOCK OPTION PLAN

The Company has an employee incentive compensation plan (the "Plan") pursuant to
which the Company's board of directors may grant stock options to officers and
key employees. In September 1997, the Board of Directors of the Company adopted
the 1997 Incentive Stock Option Plan (The "1997 Plan") for employees of the
Company to purchase up to 250,000 shares of common stock of the Company. Options
granted under the 1997 plan are "incentive stock options" as defined in Section
422 of the Internal Revenue Code. Any stock options granted under the 1997 Plan
shall be granted at no less than 100% of the fair market value of the Common
Stock of the Company at the time of the grant. As of December 31, 2003, options
to acquire 192,500 shares of Common Stock have been granted under the 1997 Plan
which includes (i) 120,000 options originally granted on September 11, 1997 and
repriced on February 21, 2002 in order to reduce the exercise price from $.38 to
$.10 per share and (ii) 68,500 additional options granted on February 21, 2002
with an exercise price of $.10 per share and (iii) 4,000 additional options
granted on April 8, 2002 with an exercise price of $.20 per share. As of
December 31, 2003, 57,500 options were available for future grant. Since the
average market price of the Company's Common Stock was below the exercise option
for the three months ended March 31, 2004, the options were anti-dilutive.

                                      Weighted
                                      Average
            Number of options        Remaining       Exercise
          Currently Exercisable    Estimated Life      Price
          ---------------------    --------------      -----

                 188,500                5.31          $ 0.10
                   4,000                8.27            0.20
                 -------                ----            ----

                 192,500                5.37            0.10
                 =======                ====            ====


                                       12
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 9. TAXES AND NET OPERATING LOSS CARRYFORWARDS

As of December 31, 2003, the components of deferred tax assets were as follows:

Deferred tax assets:

                  Accounts receivable allowance       $   3,000
                  Net operating loss carryforward       465,000
                                                      ---------

                  Total gross deferred tax assets       468,000
                  Less: Valuation allowance            (468,000)
                                                      ---------

                  Net deferred tax assets             $      --
                                                      =========

Dionics had net operating losses (NOLs) of approximately $1,366,200 at December
31, 2003. These NOLs and corresponding estimated tax assets, computed at a 34%
tax rate, expire as follows:

                 Year loss    Expiration       Loss      Estimated
                 Incurred        Date         Amount     Tax Asset
                 --------        ----         ------     ---------

                   1992          2007      $  115,200      39,000
                   2001          2021         373,000     127,000
                   2002          2022         603,000     205,000
                   2003          2023         275,000      94,000
                                           ----------      ------

                  Total                    $1,366,200    $465,000
                                           ==========    ========

Under the provisions of SFAS 109, NOLs represent temporary differences that
enter into the calculation of deferred tax assets. Realization of deferred tax
assets associated with the NOL is dependent upon generating sufficient taxable
income prior to their expiration.

Management believes that there is a risk that certain of these NOLs may expire
unused and, accordingly, has established a valuation allowance against them.
Although realization is not assured for the remaining deferred tax assets, based
on the historical trend in our sales and profitability, sales backlog, and
budgeted sales management believes it is likely that they may not be totally
realized through future taxable earnings. In addition, the net deferred tax
assets could be reduced in the near term if management's estimates of taxable
income during the carryforward period are significantly reduced.

The valuation allowance of $395,000 as of December 31, 2002 increased by $93,000
in 2003. The change in valuation allowance was a consequence of additional net
operating loss of $94,000 in 2003 and a decrease of $1,000 in allowances for
doubtful accounts. The Company believes it is possible that the benefit of these
additional assets may not be realized in the future.


                                       13
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 10. COMMITMENTS AND CONTINGENCIES

The Company has an agreement with its chief executive officer to pay to his
widow or estate for a period of five (5) years following his death an amount per
year equal to the annual salary being earned by him at the time of his death,
provided that he was an employee of the Company at the time of his death. Such
arrangements had previously been funded by life insurance policies owned by
Dionics' on his life; however, currently the policy remains unfunded.

NOTE 11. SUBSEQUENT EVENTS

In August 2004, the Company amended its Certificate of Incorporation filed in
the State of Delaware and effected the "Capitalization Agreement." The
Capitalization Agreement amends the following: (i) increased the number of
authorized shares of Common Stock of the Company from 5,000,000 shares of Common
Stock, $.01 par value, to 50,000,000 shares, and (ii) created a new class
consisting of 1,000,000 shares of Preferred Stock, $.01 par value.

In May 2004, the Company entered into the following investment agreements:

      1.    Stock Purchase Agreement - 2,200,000 shares of Common Stock would be
            issued in consideration for an investment of $110,000. In addition
            to the execution of the agreement, Kenneth Levy will become a
            director of the Company, whereby he will be entitled to acquire
            200,000 shares of Common Stock for $10,000.

      2.    The Kravitz Note - 1,000,000 shares of Common Stock and a three-year
            warrant to acquire an additional 1,000,000 shares exercisable at
            $.05 per share has been issued to the president of the Company,
            Bernard Kravitz, for an investment of $50,000.

In May 2004, the Company issued, under the 2002 Stock Compensation Plan, 172,500
restricted shares of Common Stock to 15 employees equal to the number of options
held by such employees which shares were issued in place of and in cancellation
for all of the Outstanding Options. During the quarter ended June 30, 2004, the
Company agreed to issue a five-year option to a newly retained employee to
acquire up to 105,000 shares of Common Stock at $.15 per share. The Company also
agreed to issue three-year warrants to two persons to acquire up to 5,000 shares
each at $.15 per share.

In April 2005, the Company sold the property located at 65 Rushmore Street,
Westbury, New York for the sum of $990,000. At closing the mortgage held by
Wachovia Small Business Capital in the amount of $361,900 and the mortgage held
by The Small Business Administration in the amount of $307,200 were both paid
off. A mortgage held by Bernard Kravitz in the amount of $25,000 was also paid
off at closing. After all mortgages and commissions were paid at closing the
balance of $168,200 was paid to Dionics, Inc. The Company will continue to
occupy the Premises in accordance with the terms of the Lease between the Seller
and Purchaser dated July 25, 2005. The lease is for a period of seven years with
an annual base rent of $83,300, to be paid with monthly installments as of the
first of each month. A security deposit in the amount of $20,800, representing
an amount equal to three months of the lease term, was required at the signing
of the lease agreement.


                                       14
<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.

                                DIONICS, INC.
                                (Registrant)

Dated: September 26, 2007       By: /s/ Bernard Kravitz
       ------------------           -------------------
                                    Bernard Kravitz, President


Dated: September 26, 2007       By: /s/ Bernard Kravitz
       ------------------           -------------------
                                    Bernard Kravitz, Principal Financial Officer