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

                       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 June 30, 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: 4,956,178 outstanding
                as of August 1, 2004 (excluding 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 June 30, 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
                             JUNE 30, 2004 AND 2003
<PAGE>

                                  DIONICS, INC.
                          INDEX TO FINANCIAL STATEMENTS


Contents                                                                    Page

Balance Sheet at June 30, 2004 and December 31, 2003                          2

Statements of Operations for the three months
ended June 30, 2004 and 2003                                                  4

Statements of Operations for the six months
ended June 30, 2004 and 2003                                                  5

Statements of Cash Flows for the six months
ended June 30, 2004 and 2003                                                  6

Notes to Financial Statements                                                 7
<PAGE>
                                  DIONICS, INC.
                                  BALANCE SHEET


                                     ASSETS

                                                   JUNE 30,         DECEMBER 31,
                                                     2004               2003
                                                     ----               ----
                                                 (UNAUDITED)         (AUDITED)

Current assets:

Cash                                            $   163,700        $    13,300
Trade accounts receivable, net                      124,900             54,400
Inventories                                         291,600            368,500
Prepaid expenses                                     12,100             24,300
                                                -----------        -----------

Total current assets                                592,300            460,500

Property and equipment, net                          67,300             70,800

Other assets:

Deferred mortgage fees and other assets              35,100             39,700
                                                -----------        -----------

Total Assets                                    $   694,700        $   571,000
                                                ===========        ===========

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


                                        2
<PAGE>

                                  DIONICS, INC.
                                  BALANCE SHEET
                                   (Continued)

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                     JUNE 30,       DECEMBER 31,
                                                       2004             2003
                                                       -----            ----
                                                    (UNAUDITED)      (AUDITED)
Current liabilities:

Accounts payable                                   $    70,800      $   137,200
Accrued expenses                                        63,900           36,300
Current maturities of long term debt                    10,000           46,300
                                                   -----------      -----------

Total current liabilities                              144,700          219,800

Notes Payable-Non current:
Long-Term Debt less Current Maturities                 667,100          670,900
Deferred Compensation Payable                          301,000          501,000

Convertible promissory notes payable                   105,000               --
                                                   -----------      -----------
Total Liabilities                                    1,217,800        1,391,700

Stockholders' deficit:

Common stock par value $.01;
  5,000,000 shares authorized,
  4,956,178 and 3,848,222 issued and
  outstanding on June 30, 2004 and
  December 31, 2003, respectively                       51,100           38,400
Additional paid in capital                           1,777,200        1,522,800
Accumulated deficit                                 (2,130,800)      (2,161,300)
Less: Treasury Stock at Cost
  164,544 Shares                                      (220,600)        (220,600)
                                                   -----------      -----------

Total stockholders' deficit                           (523,100)        (820,700)
                                                   -----------      -----------

Total liabilities and stockholders' deficit        $   694,700      $   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 JUNE 30, 2004 AND 2003

                                                          Three Months Ended
                                                               June 30,
                                                          2004          2003
                                                          ----          ----

Sales                                                $   313,900    $   262,600
Cost of sales                                            210,400        167,400
                                                     -----------    -----------

Gross Profit                                             103,500         95,200

Other costs:
Selling, general and Administration                       95,200         99,000
                                                     -----------    -----------

Total other costs                                         95,200         99,000
                                                     -----------    -----------

Gain (Loss) from operations                                8,300         (3,800)

Other income and (expense):

Interest income                                            1,300             --
Interest expense                                          (1,900)       (11,200)
                                                     -----------    -----------

Net gain (loss) for the year before income taxes           7,700        (15,000)
Income tax expense                                            --             --
                                                     -----------    -----------

Net gain (loss)                                      $     7,700    $   (15,000)
                                                     ===========    ===========

Basic gain (Loss) per common share                   $       .00    $        --
                                                     ===========    ===========

Diluted                                              $       .00    $        --
                                                     ===========    ===========

Weighted average number
  of common shares outstanding                         4,956,178      3,683,678
                                                     ===========    ===========

Diluted                                                4,969,435             --
                                                     ===========    ===========

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


                                        4
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                                           Six Months Ended
                                                               June 30,
                                                           2004         2003
                                                           ----         ----


Sales                                                $   680,400    $   425,700
Cost of sales                                            459,600        327,400
                                                     -----------    -----------

Gross Profit                                             220,800         98,300

Other costs:
Selling, general and Administration                      181,300        185,800
                                                     -----------    -----------

Total other costs                                        181,300        185,800
                                                     -----------    -----------

Gain (Loss) from operations                               39,500        (87,500)

Other income and (expense):

Interest income                                            1,300            500
Interest expense                                          (9,500)       (21,800)
                                                     -----------    -----------

Net gain (loss) for the year before income taxes          31,300       (108,800)
Income tax expense                                          (800)          (800)
                                                     -----------    -----------

Net gain (loss)                                      $    30,500    $  (109,600)
                                                     ===========    ===========

Basic gain (Loss) per common share                   $       .00    $    (.2975)
                                                     ===========    ===========

Diluted                                              $        00    $        --
                                                     ===========    ===========

Weighted average number
  of common shares outstanding                         4,956,178      3,683,678
                                                     ===========    ===========

Diluted                                                4,969,435             --
                                                     ===========    ===========

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


                                        5
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                                            Six Months Ended
                                                                June 30,
                                                           2004         2003
                                                           ----         ----
Cash flows from operating activities:

Net income(loss)                                       $  30,500      $(109,600)
Adjustments to reconcile
  net income to net cash provided
  by operating activities:

Depreciation and amortization                              5,200          3,600

Change in assets and liabilities:
Accounts receivables                                     (70,500)         5,900
Prepaid expenses                                          12,200          4,300
Inventories and parts                                     76,900        (25,000)
Other assets                                               2,900          1,500
Accounts payable                                         (66,400)       (27,700)
Accrued expenses                                          27,600         27,100
                                                       ---------      ---------

Net cash provided (used) by operations                 $  18,400      $(119,900)

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

Cash flows (used in) financing activities:
Proceeds from sale of capital stock                       67,100             --
(Repayment) of Debt                                      (40,100)       (53,900)
SBA loan                                                      --        255,800
Issuance of Convertible promissory notes                 105,000             --
                                                       ---------      ---------

Net cash used in financing activities                    132,000        201,900

Net increase in cash                                     150,400         71,600

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

Cash, end of period                                    $ 163,700      $  99,800
                                                       =========      =========

SUPPLEMENTAL INFORMATION:

Non-cash transactions: An executive officer and shareholder
forgave $200,000 in deferred compensation payable owed to him
during the first quarter. The resulting effect was a $200,000
decrease in Deferred Compensation Payable and an increase in
Additional Paid in Capital of $200,000

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


                                        6
<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 $163,700 as of
June 30, 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:

                                                June 30,   December 31,
                                                  2004         2003
                                                  ----         ----
                                                            (Audited)
                                                            ---------

             Raw materials (net of reserves)    $ 42,300    $ 76,700
             Work in process                     193,400     216,000
             Manufacturing Supplies               31,700      42,700
             Finished goods                       24,200      33,100
                                                --------    --------

             Total                              $291,600    $368,500
                                                ========    ========


                                        7
<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 June 30,
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:

                                             June 30,   December 31,
                                               2004        2003
                                               ----        ----
                                                         (Audited)
                                                         ---------

                Cost                         $ 52,000    $ 52,000
                Accumulated Amortization      (18,000)    (16,400)
                                             --------    --------

                                             $ 34,000    $ 35,600
                                             ========    ========

Amortization for the six months ended June 30, 2004 was $1,600 and $3,300 for
the year ended December 31, 2003.

Major Customers

For the six months ended June 30, 2004, approximately $220,000 or 32% of total
sales were to our largest customer, Agilent Technologies.


                                       8
<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, warrants and
convertible notes) 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 six months ended June 30, 2004, basic gain per share of Dionics, Inc.
was $ .00 per share. For the six months ended June 30, 2003 basic loss per share
of Dionics, Inc. was $(.03) 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.

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.


                                       9
<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:

                                                  June 30,    December 31,
                                                    2004          2003
                                                    ----          ----
                                                               (Audited)
                                                               ---------

         Trade accounts receivable                $ 132,200    $ 61,700
         Less: allowance for doubtful accounts       (7,300)     (7,300)
                                                  ---------    --------

         Trade accounts receivable, net           $ 124,900    $ 54,400
                                                  =========    ========

At June 30, 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 June 30, 2004 and June 30,
2003.


                                       10
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

                                                 June 30,     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
                                               -----------    -----------
                                                 1,764,400      1,764,400

          Less: accumulated depreciation        (1,697,100)    (1,693,600)
                                               -----------    -----------

          Net property, plant, and equipment   $    67,300    $    70,800
                                               ===========    ===========

Depreciation expenses for the six months ended June 30, 2004 and for the year
ended December 31, 2003 were $3,600 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 of
$122,700 at June 30, 2004 and is shown net of loans in the amount of $121,300
under other assets.


                                       11
<PAGE>

                                      DIONICS, INC.
                              NOTES TO FINANCIAL STATEMENTS

NOTE 6. LONG-TERM DEBT

As of June 30, 2004 and December 31, 2003, our long-term debt includes a
mortgage and notes payable as follows:

                                                    June 30,       December 31,
                                                      2004             2003
                                                      ----             ----
                                                                    (Audited)
                                                                    ---------

Mortgage payable (a)                               $ 364,000        $ 368,000
Term loans                                                --           35,000
Lease                                                  7,300            8,400
SBA - Loan (a)                                       305,800          305,800
                                                   ---------        ---------
                                                     677,100          717,200

Less: current maturities                             (10,000)         (42,400)
                                                   ---------        ---------

                                                   $ 667,100        $ 674,800
                                                   =========        =========

(a) - these mortgage amounts were paid off in April 2005 with the sale and
leaseback 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 $6,400. The principal balance as of December
31, 2003 was $22,000 and this balance was paid in full as of June 30, 2004.


                                       12
<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. Monthly payments for this loan are $3,800. The principal balance
as of December 31, 2003 was $13,000 and this balance was paid in full as of June
30, 2004.

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. In April 2005 the building was sold and the mortgage was then
paid off.

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,
which was sold in April 2005 and the loan was paid off. 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 six months ended June 30, 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
                 =======                  ====              ======


                                       13
<PAGE>

                                  DIONICS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 9. 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.

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.

NOTE 10. 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 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