SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC  20549

                         FORM 10-KSB

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

              For the fiscal year ended DECEMBER 31, 1998

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

                     Commission file number 0-8161

                          DIONICS,  INC.
            (Name of Small Business Issuer 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                                    (Zip Code)
executive offices)

    Issuer's telephone number, including area code:  (516) 997-7474

  Securities registered under Section 12(b) of the Exchange Act: None

    Securities registered under Section 12(g) of the Exchange Act: Common, par
value $.01

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [ ]

State Issuer's revenues for its most recent fiscal year:  $1,943,700.

As of March 1, 1999, the aggregate market value of the Common Stock held by
non-affiliates of the Issuer (2,250,212 shares) was approximately $1,054,787.
The number of shares outstanding of the Common Stock ($.01 par value) of the
Issuer as of the close of business on March 1, 1999 was 3,683,678 (excluding
164,544 treasury shares).

                  Documents Incorporated by Reference:  None
<PAGE>

                              PART I

Item 1.   Description of Business.

     (a)  Business Development.

     Dionics, Inc. (the "Registrant" or the "Company") was incorporated
under the laws of the State of Delaware on December 19, 1968 as a general
business corporation.

     The Company has never been in bankruptcy, receivership or any similar
proceeding.

     The Company has never been involved in any material reclassification,
merger or consolidation.

     There have been no material changes in the mode of conducting the
business of the Company.

     (b)  Business of Issuer.

     The Company designs, manufactures and sells silicon semi-conductor
electronic products, as individual discrete components, as multi-component
integrated circuits and as multi-component hybrid circuits.

     (i)  The individual discrete components are predominantly transistors,
diodes and capacitors, intended for use in miniature circuit assemblies
called "hybrid micro-circuits".  In order to facilitate their being easily
assembled into the "hybrid" circuits products by its customers, these
products are supplied by the Company in un-wired unencapsulated microscopic
chip form.  A variety of such components is supplied by the Company, some
as "standard" products which it offers to the industry at large, and other
as special or custom-tailored products which it manufactures to certain
specific electronic requirements of an individual customer.

     Due to the rapidly changing needs of the marketplace, there are
continual shifts in popularity among the various chip components offered by
the Company.  Within the year, and from year to year, a largely random
variation in the needs of its customers prevents any meaningful comparison
among the many devices in this category.  Taken as a whole, however, the
category of discrete chip components for the hybrid circuit industry is one
of the three main classes of products offered by the Company.

     A second main class of products offered by the Company is
encapsulated, assembled, integrated circuits for use in electronic digital
display functions.  Due to unusual and proprietary technology, the Company
is able to produce high-voltage integrated circuits higher than the average
available in the industry.  These are designed for specific high-voltage
applications involved in digital displays based on gas-discharge or vacuum
fluorescence.

     For the most part, the Company's sales in this category of product are
standard circuits, designed by the Company, and offered to the industry at
large.  In some instances, customer-designed circuits are produced and sold
only to the sponsoring customer, with specific electrical performance
needed by that customer.

     The third main class of products offered by the Company is a range of
hybrid circuits that function as opto-isolated MOSFET drivers and custom
Solid State Relays.  Both of these incorporate a light emitting diode (LED)
as the input and a dielectrically-isolated (DI) array of photo-voltaic
diodes which, in response to the infra-red light input, generate a voltage
as the output.  MOSFET drivers, or ISO-GATES, as the Company has named
them, are sold as a packaged combination of the LED and photo-voltaic
chips.  Custom Solid State Relays also add the MOSFET output devices in the
same package along with certain other associated components.

     The percentage of total revenues for each of the three product classes
was in excess of fifteen (15%) percent in 1998.

     (ii) The Company has not invested any material amount of assets in,
nor has it announced, any new major product line in any new industry
segment.

     (iii)     Raw materials essential to the business of the Company are
readily available from many sources within the United States.

     (iv) The Company has had nine (9) United States patents issued to
date.  Each patent is for a 17-year duration.  The earliest patent was
granted in 1971 and the latest in 1990.  Therefore, the expiration dates
range from 1988 through 2007.  Of those, the only material ones are those
related to the Company's high-voltage integrated circuits and high speed
MOSFET-drivers, the latter a relatively new product area for the Company.

     (v)  The business of the Company is not seasonal.

     (vi) Customers to whom, for the fiscal year ended December 31, 1998,
sales were made equal to approximately 10% or more of the Company's sales:

                                        Approximate
                                        Percentage
               Name                     of Business

               Customer "A"             15.5%
               Customer "B"             14.3%
               Customer "C"             12.7%

     The actual names of the customers above referred to are not set forth
since the identity of such substantial customers is a trade secret of the
Company and deemed confidential.  Disclosure of such names would be
detrimental to the best interests of the Company and its investors and
would adversely affect the Company's competitive position.

     The loss of any of the above customers would have a material adverse
affect on the business of the Company.

     (vii)     Almost all of the orders for the Company's products are by
their terms cancelable, or their delivery dates may be extended by a
customer without penalty.  There can be no assurance that any of the orders
will become consummated sales.  Accordingly, none of the orders that the
Company has can be designated as backlog.  With respect to orders that are
believed to be firm, but are nonetheless subject to cancellation, such
backlog was at December 31, 1997 $622,400, and at December 31, 1998
$902,000.

     (viii)    No material portion of the Company's business is subject to
renegotiation of profits or termination of contracts or subcontracts at the
election of the Government.

     (ix) The Company competes with numerous other companies which design,
manufacture and sell similar products.  Some of these competitors have
broader  industry recognition, have financial resources substantially
greater than the Company and have far more extensive facilities, larger
sales forces and more established customer and supplier relationships than
those which are available to the Company.

     Competition in the industry is principally based upon product
performance and price.  The Company's competitive position is based upon
its evaluation of its products' superior performance and its general
pricing structure which Management believes is favorable in its industry
although the Company may suffer from price competition from larger
competitors whose facilities and volume base enable them to produce a
competitive product at a lower price

     (x)  The estimated dollar amount spent during each of the last three
fiscal years on company-sponsored research and development activities,
determined in accordance with generally accepted accounting principles are:

                         1996 -  $ 35,000
                         1997 -  $ 40,000
                         1998 -  $ 45,000

     The amounts spent during  each of such years on customer-sponsored
research activities are not material.

     (xi) Compliance with Federal, State and local provisions which have
been enacted or adopted regulating the discharge of materials into the
environment or otherwise relating to the protection of the environment has
had no material effect upon the Company's capital expenditures, earnings or
competitive position.

     (xii)     The number of persons employed by the Company is 28.  The
Company's employees are not represented by unions and/or collective
bargaining agreements.

Item 2.   Description of Property.

     The Company's executive offices are located at 65 Rushmore Street,
Westbury, New York, which property is owned by the Company (sometimes
herein referred to as the "Westbury Property").

     The Company fully utilizes 65 Rushmore Street which presently houses
all of the Company's manufacturing facilities, as well as all of its
research, sales and management activities.

     The Company believes that its present facilities at 65 Rushmore Street
are adequate for current operations.

Item 3.   Legal Proceedings.

     There are no material pending legal proceedings to which the Company
is a party or to which any of its property is subject.

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

     No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.


                              PART II

Item 5.   Market for Common Equity and Related Stockholder Matters.

     (a)  Market Information.

     The Company's Common Stock is traded in the over-the-counter market
and is quoted on the OTC Bulletin Board and  in the "pink sheets"
promulgated by the National Quotation Bureau, Inc.  Until July 31, 1989,
the Company's Common Stock was quoted on the National Association of
Securities Dealers Automated Quotation System (NASDAQ).  In addition from
May 21, 1985 to February 3, 1989, the Common Stock of the Company was
quoted on the NASDAQ National Market System.

     The following table sets forth the range of the high and low bid
quotations for the Company's Common Stock for each period indicated during
1997 and 1998.

               Period                    Bid Prices

               1997                     High        Low
               First Quarter            .28         .14
               Second Quarter           .20         .16
               Third Quarter            1-5/16      .17
               Fourth Quarter           1-5/8       3/8

               1998                     High        Low
               First Quarter            1.00        7/16
               Second Quarter           7/8         3/8
               Third Quarter            5/8         3/8
               Fourth Quarter           7/8         5/16

     The foregoing over-the-counter market quotations reflect inter-dealer
prices, without retail mark-ups, mark-downs or commissions and may not
necessarily represent actual transactions.

     (b)  Holders.

     As of March 1, 1999 there were approximately 405 record holders of the
Company's Common Stock.

     (c)  Dividends.

     During the last two fiscal years of the Company, no cash dividends
have been declared or paid on the Company's Common Stock.

Item 6.   Management's Discussion and Analysis or Plan of
Operation.



A.   LIQUIDITY AND CAPITAL RESOURCES

     In the year-ended December 31, 1998, the Company continued its recent
trend of steady financial improvements, both in terms of operating
performance and balance sheet quality.  Having shown a profit in 1996 for
the first time in many years, the Company followed with a considerable
improvement in 1997 and now another substantial improvement in 1998.  This
marks three consecutive years of growing profitability.

     The Company has been recuperating from the effects of numerous adverse
business conditions tracing as far back as 1987 and, working only with its
very limited, sometimes "negative" Working Capital, it has not only
survived but now appears to have solidly "turned the corner."  In view of
the favorable outlook for continued annual improvements, it may be useful
to briefly review some of the key developments that have helped bring the
Company to its presently improved status.

     Effective January 31, 1994 the Company had signed a "RESTRUCTURING
AGREEMENT between DIONICS, INC. and APPLE BANK FOR SAVINGS," successfully
completing negotiations for the full restructuring of all its debts with
that Bank. During the previous three years, the Company's inability to pay
either interest or principal had kept its loans in a non-performing
"default" status, culminating finally in the sale of one of its two factory
buildings in order to partially reduce its debt-balance.  With the signing
of this new Agreement, the previous default condition was cured, an amount
of $376,147 in past-due interest was forgiven, and numerous other favorable
changes were made to the debt and payment obligations of the Company.

     In addition to the benefits of the above Agreement, by December 31,
1994 favorable settlements of several other large Accounts Payable debts
had provided the Company with  $112,900 more in Forgiveness of
Indebtedness, further easing its debt obligations.  (In September 1994 the
above loans were purchased from Apple Bank by D.A.N. Joint Venture, a
Limited Partnership, and an affiliate of The Cadle Company.  All terms and
conditions remain unchanged.)

     By December 31, 1995, the Company had also fully met certain financial
performance standards called for in the new Bank Agreement, and thus
qualified for additional Forgiveness of both Debt and Deferred Interest for
a total of $213,300.  See Note 5 to the financial statement for a more
detailed description of the Restructuring Agreement.  Subsequently, with
profitable performances in 1996, 1997 and 1998 the Company generated
substantial further improvements to its financial condition.

     It is noteworthy that in December 1998 the Company successfully
refinanced its real-estate mortgage loan and thus avoided the need to make
a March 1999 "balloon" payment of $350,000.  Also, as a requirement of the
refinancing process, the Company's property underwent an independent
appraisal that showed it to have a current market-value that is $750,000
higher than the heavily-depreciated value on the Company's balance sheet.
This suggests that the "true" Net Worth of the Company at December 31, 1998
is a positive $641,500 instead of the negative ($108,500) arrived at by
more conventional accounting methods.

     Notwithstanding the excellent financial performance of 1998, it was
still concluded by Management that, in view of the near-term cash needs for
the Company's debt and other obligations, the expenditure of a significant
portion of its cash resources for fully-audited financial reports would
still not be wise.  Instead, as in 1997, the Company utilized its non-
independent accounting firm to perform an Accountant's Review for this
filing. It should be noted that an Accountant's Review meets considerably
higher quality reporting standards than the Accountant's Compilation used
in years before 1996. The quality of the 1998 financial data was further
enhanced through a written confirmation of Accounts Receivable & Accounts
Payable, plus a sample-checking verification of the Company's year-end
Inventory.

     Further concerning the need for the Company to maximize its cash
position is the fact that during 1999 it will be facing certain new payment
obligations that will require substantial cash on hand.  See Notes 4 and 5
in the financial statement, entitled DEFERRED COMPENSATION PAYABLE and
LOANS PAYABLE - APPLE BANK, respectively.  Commencing in April 1999, the
Company enters the second five-year period of its Apple Bank Loan
Agreement, and will then begin the 60-month pay-down of a total of $451,350
in debts, plus interest.  These payments will be in addition to the
recently reduced monthly obligations of the Deferred Compensation
Agreement, beginning January 1, 1999.  At present, although the combined
effects of the above obligations represent substantial cash requirements,
it is Management's opinion that current cash reserves plus anticipated
positive cash flow from operations should permit them to be met.

     Conversely, relieving the Company's cash requirements was the recently
completed refinancing of its real-estate mortgage loan.  A favorable 8.23%
new interest rate for five-years pales by comparison, however, to the
benefits of having avoided a $350,000 "balloon" payment that was due in
March 1999.  Critical to the securing of that very desirable refinancing
was the willingness of the Chief Executive Officer to accept the new
lender's demand for a further amendment of his Deferred Compensation
Agreement in which certain monthly payments to him were significantly
reduced and delayed. (See Note 4.)  Therefore, to compensate the Chief
Executive, and to provide security for his remaining interests in the
amended agreement, a second-mortgage against the Company's real-estate
property was issued in his name.

     The Company's Cash account continued to grow as a result of profitable
operations, rising to $606,100 at December 31, 1998 as compared to $473,400
at December 31, 1997 and $210,900 at December 31, 1996. The ratio of Total
Current Assets to Total Current Liabilities was 4.27:1 at December 31,
1998, down slightly from the 5.58 level of the past two years resulting
from the recent increase in the Current portions of Long-term Debt plus
Deferred Compensation Payable. Nonetheless, to the extent that the Current
Ratio is indicative of near-term financial strength, the above level of
4.27 may be considered a very positive sign for the Company.

     Working Capital also continued to improve, reaching $1,002,900 at
December 31, 1998, as compared to $862,300 at December 31, 1997, $717,700
at December 31, 1996 and $585,600 at December 31, 1995.  The continuing
positive trend reflects improvements in operations over the past several
years, with the obvious upgrading of the Company's LIQUIDITY. Capital
expenditures in 1998 and 1997 were not at material levels, but may increase
moderately in 1999.

     A further result of the Company's slow but steady improvements over
the last several years has been the upgrading of its Net Worth.  As far
back as 1992, the Company's Net Worth was a negative $1,273,000, which then
progressed to a negative $730,300 in 1993, a negative $694,900 in 1994, a
negative $527,300 in 1995, a negative $469,300 in 1996, a negative $323,200
in 1997 and now a negative $108,500 in 1998.  In addition, as was noted
earlier, the Company's real-estate property was independently appraised
with a market-value $750,000  more than the heavily-depreciated value shown
on the Balance Sheet. This suggests that the "true" Net Worth of the
Company at December 31, 1998 is a POSITIVE $641,500 as opposed to the
NEGATIVE $108,500 arrived at by conventional accounting methods.

     Management has been continuing its search for sources of additional
financing to provide further growth momentum for the Company. Several
contacts are always active with potential lenders or acquirors, and it is
believed that continuing improvements in the Company's operating
performance and Balance Sheet should enhance those efforts, although no
assurance of success can be given. For the immediate future, at least, the
Company is well able to support its current operations, while making
efforts to further strengthen both profitability and positive cash flow
results.  Management is very encouraged by recent improvements in both
those directions.


B.  RESULTS OF OPERATIONS

     Operating results for 1998 showed an increase of 7.9% in sales volume,
with $1,943,700 as compared to $1,801,500 in 1997 and $1,521,600 in 1996.
Of greater significance, the Company showed a Net Profit of $214,700 for
the year-ended December 31, 1998, an increase of 46.9% over the $146,100
level of 1997 and 283% higher than the $56,000 level of 1996.

     The Gross Profit margin for 1998 rose slightly to 33.2% as compared to
29.8% in 1997 and 31.3% in 1996.  This improvement came as new direct labor
personnel were hired and trained, with the gradual diminishing of their
inefficiencies.

     Selling, General & Administrative Expenses continued to drop very
slightly as a percentage of sales, with 19.6% in 1998, 20.1% in 1997 and
23.0% in 1996.

     Research & Development expenditures rose slightly again to $45,000 in
1998 from $40,000 in 1997 and $35,000 in 1996.  These levels reflect
primarily the limited funds available for R&D, as well as a continuing
emphasis on the sale of already existing products.  The Company has
numerous fully-developed and almost-fully-developed products which it is
trying to market more extensively, although it does engage in a limited
amount of new product development.  As the higher priority needs for
consistent profitability and debt service are met, the Company may be free
to devote more resources to R&D.

     Interest Expense for 1998 was $68,000, compared to $65,400 in 1997 and
$70,400 in 1996.

     In recent years, the Company has been striving to correct its two
basic problems: past debts, primarily to the Bank, and the need for
currently profitable operations.  With the 1993 sale of one of its two
buildings and the subsequent Debt Restructuring Agreement, the first
problem area was put onto a manageable basis.  The Company is no longer in
default and appears able, for the foreseeable future, to manage its debt
obligations under the new debt repayment schedule.  The Company was also
able to further reduce that debt, first by meeting certain financial
performance standards in 1994 and 1995, and then through debt reduction
payments that commenced in 1996.  A major element of debt-relief was
achieved during 1998 with the refinancing of the Company's real-estate
mortgage loan and the resulting avoidance of a $350,000 "balloon" payment
that would have been due in March 1999.

     Concerning its second basic problem, the need for currently profitable
operations, the Company appears to have solidly "turned the corner" and has
now shown three consecutive years of increasing profits.  Another bench-
mark of progress is the fact that the Company ended the year of 1998 with a
record order back log, in excess of $900,000.  This follows the Company's
having done a remarkable job of both surviving with little or no working
capital and also managing to consistently make slow but steady improvements
in financial performance. While earlier cost-reduction efforts were able to
keep the Company alive, it was only through increases in Sales volume in
1998, 1997 and 1996 that the Company was able to show any profits. The
Company must now continue to stimulate increased use of its photovoltaic
(PV) Solid State Relay and PV MOSFET-driver product lines, where prospects
for growth look excellent, the latter product having found an area of
potentially major growth in the medical electronics market. Management is
determined to continue pursuing growth in Sales and Profits, and to succeed
in this challenge as it has in the challenges of both debt-resolution and
the need to return to profitability.  Risks of failure persist, of course,
as they do in any commercial venture but the Company, having struggled back
from the brink of failure, now appears closer to the brink of success.


C.  YEAR 2000 ISSUE

     The Year 2000 issue is the result of computer programs having been
written using two digits, rather then four, to define the applicable year.
Software programs and hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than
the year 2000.  This could result in a major system failure or
miscalculations causing disruptions of operations, including a temporary
inability to engage in normal business activities.

     Based on recent assessments, the Company determined that its critical
software (primarily widely-used software packages) and all of its critical
business systems, including manufacturing instrumentation, are already year
2000 compliant.  Nevertheless, throughout 1999, assessment, testing and
remediation, if necessary, will continue.

     The Company is also actively working with critical suppliers at
products and services to determine that the suppliers' operations and the
products and services they provide are year 2000 compliant or to monitor
their progress toward year 2000 compliance.  In this regard, the Company
believes its greatest year 2000 risk for disruption to its business is the
potential noncompliance of third parties.  As a result, the Company has
initiated communications with third parties with whom the Company has
material direct and indirect business relationships. The Company is
currently in the process of contacting third parties in order to determine
the extent to which the Company's business is vulnerable to the third
parties' failure to make their systems year 2000 compliant.  To date, the
Company is still continuing to gather information from such other third
parties.

     The Company currently does not have a contingency plan in the event a
particular system, including the systems of material third parties, are not
year 2000 compliant.  Such a plan will be developed if it becomes clear
that the Company is not going to achieve its scheduled compliance
objectives.  Although no assurance can be given that there will be no
interruption of operations in the year 2000, the Company believes (and
assuming that third parties with whom the Company has material business
relationships successfully remediate their own year 2000 issues) that it
has reasonably assessed all of its systems in order to ensure that the
Company will not suffer any material adverse effect from the year 2000
issue.

     The Company has used and will continue to use internal resources to
resolve its year 2000 issue. Costs incurred to date by the Company have not
been material and the Company currently expects that the total cost of
these programs will not exceed $20,000.

     THE PRECEDING TEXT CONTAINS FORWARD-LOOKING STATEMENTS WHICH REFLECT
MANAGEMENT'S BEST JUDGMENT OF CURRENTLY AVAILABLE INFORMATION.   SHOULD
CERTAIN ASSUMPTIONS FAIL TO MATERIALIZE, OR UNEXPECTED ADVERSE EVENTS
OCCUR, THE COMPANY MAY NOT REACH MANAGEMENT'S GOALS.

Item 7.   Financial Statements.

     See pages F-1 through F-10.   In addition, see Part II, Item 6 for
information as to the Company's decision to file unaudited financial
statements.

Item 8.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure.

     None.


                             PART III

Item 9.   Directors, Executive Officers, Promoters
          and Control Persons; Compliance with
          Section 16(a) of  the Exchange Act.

     Identity of Directors:

                           Position and Offices     Director
Name                 Age   with Company             Since

Bernard Kravitz      65    President, Secretary,    1969
                           Treasurer

Solomon Berkowitz    76    None(1)                  1975

     The term of office for each director is until the next annual meeting
of stockholders.  There are no arrangements or  understandings between any
of the directors and any other persons pursuant to which he was selected as
director.


(1)  A partner in Ernest D. Loewenwarter & Co. LLP, Certified Public
     Accountants, which firm performs non-audit accounting services for
     Company.

     Identity of Executive Officers:
                                                  Officer
Name                Age   Position                Since

Bernard Kravitz     65    President, Secretary,   1969
                          Treasurer

     The term of office for each officer is until the next annual meeting
of directors.  There are no arrangements or understandings between the
Company's sole officer and any other persons  pursuant to which he was
selected as an officer.

     Identity of certain significant employees:

     The Company does not believe it has any significant employees as
defined in Item 401, Regulation S-B.

     However, in the event that it shall be determined that the Company has
such significant employees, then the response to this item would require
disclosure of otherwise non-public corporate information, the disclosure of
which would adversely affect the Company's competitive position.

     Family Relationships:

     None.

     Business Experience:

     (i)  Bernard Kravitz has, for more than the past five years, been an
officer and employee of the Company.

     (ii) Solomon Berkowitz is a certified public accountant and has, for
more than the past five years, been a partner in the accounting firm of
Ernest D. Loewenwarter & Co. LLP, which firm performs non-audit accounting
services for the Company.  During 1998, fees of $14,950 were paid to such
firm.

     Involvement in Certain Legal Proceedings:

     None.

     Promoters and Control Persons:

     N/A

     Compliance with Section 16(a) of the Exchange Act:

     Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes of
ownership of Common Stock of the Company.  Officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.

     To the Company's knowledge, with respect to the year ended December
31, 1998, all Section 16(a) filing requirements applicable to each person
who, at any time during the fiscal year ended December 31, 1998, was an
officer, director and greater than ten percent beneficial owner, were
complied with.

Item 10.  Executive Compensation.

     Summary Compensation Table:

     The following summary compensation table sets forth information
concerning the annual and long-term compensation for services in all
capacities to the Company for the years ended December 31, 1998, 1997 and
1996, of those persons who were, (i) serving as the chief executive officer
of the Company or acting in a similar capacity during the year ended
December 31, 1998 and (ii) the other most highly compensated executive
officers of the Company, whose annual base salary and bonus compensation
was in excess of $100,000 (the named executive officers):

                    Summary Compensation Table

                                   Annual Compensation(1)

Name and Principal       Fiscal
Position                 Year      Salary         Bonus
Bernard Kravitz,         1998      $101,600       $0
President                1997      $104,400       $0
                         1996      $ 97,400       $0

                                   Long-Term
                                   Compensation

                                   Restricted   Shares
Name and Principal       Fiscal    Stock        Underlying
Position                 Year      Awards       Options
Bernard Kravitz,         1998      $0           0
President                1997      $0           0
                         1996      $2,000(2)    0
___________________________

(1)  Does not include matching contributions paid by the Company for Mr.
     Kravitz during 1996, 1997 and 1998 of $3,638, $2,556 and $4,064,
     respectively, pursuant to the Company's Savings and Investment Plan
     under section 401(k) of the Internal Revenue Code and premiums paid by
     the Company during 1996, 1997 and 1998 on a life insurance policy it
     owns and maintains on the life of Mr. Kravitz.  (See subsections
     "Bonus and Deferred Compensation" and "Compensation pursuant to plans"
     elsewhere herein under Item 10).

(2)  On July 1, 1996, the Company awarded to Mr. Kravitz a performance-
     related bonus of  200,000 shares of restricted stock.  As required by
     regulations of the Securities and Exchange Commission, the amount
     shown in the table was  calculated using the market price of the
     Company's unrestricted Common Stock on the date of the award.  That
     price, $.01 per share, was reported by the OTC Bulletin Board on July
     1, 1996 as the actual closing sales price.  Further, as of December
     31, 1996, the OTC Bulletin Board reported the actual closing sales
     price of the Common Stock to be $.17 per share.  Although the
     restricted stock granted to Mr. Kravitz therefore had an apparent
     value of $34,000 as of December 31, 1996 (200,000 multiplied by $.17),
     it should be noted that those shares may not be offered for sale, and
     may neither be sold nor otherwise transferred except pursuant to an
     effective registration statement under the Securities Act of 1933 or
     pursuant to an exemption from such registration requirement.

     Bonuses and Deferred Compensation:

     The Company has an agreement with  Bernard Kravitz, the sole officer
and a Director of the Company, 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 Mr. Kravitz at the time of his death,
provided  that  he was in the employ of the Company at the time of his
death.  Such arrangements had previously been funded by life insurance
policies owned by the Company on Mr. Kravitz's life, but currently remains
unfunded.

     In 1987, the Company entered into a salary continuation agreement,
amended in 1997 and 1998, which provides for a 72 month schedule of
payments to Bernard Kravitz (the "deferred compensation agreement").  In
connection with the refinancing of the Company's mortgage loan (see Part
III, Item 12), a modified deferred compensation payment schedule commencing
January 1, 1999 was agreed to by the Company and Mr. Kravitz. The 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 42{nd} 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, the Company has not
specifically designated funds with which to meet these payment
requirements.  In view of its continuing total indebtedness as well as its
need for operating capital, there can be no assurance that the Company will
be able to satisfy the terms of the deferred compensation 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 the Company's
then-current financial circumstances.  The previously mentioned life
insurance policy had a cash surrender value at December 31, 1998 of
approximately $4,000, which is included in other assets.  In connection
with the refinancing  of the Company's mortgage loan, the Company executed
a mortgage subordinate to the new first mortgage secured by the Company's
Westbury Property in favor of Mr. Kravitz to insure amounts due him under
the deferred compensation agreement.

     Compensation pursuant to plans:

     On July 1, 1985, the Company adopted a Savings and Investment Plan
intended to qualify as a defined  contribution plan under section 401(k) of
the Internal Revenue Code.  Internal Revenue  approval was granted in 1986.
The plan, as amended, provides that a member  (an eligible employee of the
Company) may elect to save no less than 1% and no more than 15% of that
portion of his compensation attributable to each pay period (subject to
certain limitations).  The Company shall contribute (matching
contributions) 100% of the first 3% of the member's contribution and 50% of
the next 2% of the member's contribution.  In addition, the Company shall
contribute such amount as it may determine for each plan year (regular
contributions) pro rata allocated to each member subject to certain
limitations.

     Any employee with one year of service may become a member of the plan
excluding employees covered by a collective bargaining unit.

          Upon eligibility for retirement, disability (as defined in the
plan), or death, a member is 100% vested in his account.  Upon  termination
of employment for any other reason,  a  member is 100% vested in that
portion of his account which he contributed and vested in the balance of
his account dependent upon years of service as follows:

                    Years                Percentage
                    Less than 2          0%
                    2                    25%
                    3                    50%
                    4                    75%
                    5 or more            100%

     See subsection "Summary Compensation Table" elsewhere herein under
Item 10 for information on matching contributions paid by the Company for
Mr. Kravitz during 1996, 1997 and 1998.

     Compensation of Directors:

     During the year ended December 31, 1998, the Company's one non-
employee director received no compensation for his services as such and the
Company presently intends that the same will be the case for the year
ending December 31, 1999.

     Stock Option Plan:

     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, 1998, options to acquire 120,000 shares of
Common Stock have been granted under the 1997 Plan.  No options were
granted during 1998.  All of such options were granted on September 11,
1997 and have an exercise price of $.38 per share.  As of December 31,
1998, 130,000 options were available for future grant.  The 1997 Plan was
subject to obtaining stockholder approval within twelve months of the
adoption of the 1997 Plan which approval was obtained in September 1998.
None of the options granted under the 1997 Plan were granted to the
executive officer named in the Summary Compensation Table (Mr. Kravitz).

     Termination of Employment and Change of Control Arrangements:

     None.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 1, 1999, by
(i) each person who is known by the Company to own beneficially more than
5% of the Company's outstanding Common Stock; (ii) each of the Company's
directors; and (iii) directors and officers of the Company as a group:

                                             Percent(1)
Name and Address         Shares Owned        of Class

Bernard Kravitz          944,952(2)(3)       25.7%
110-11 Queens Blvd.
Forest Hills, NY

Sherman Gross            339,544(3)           9.2%
848 Newburgh Ave.
Woodmere, NY

Gregory Coleman          269,720              7.3%
59-09 Northern Blvd.
East Norwich, NY

Solomon Berkowitz         15,548              0.4%
15 Story St.
Brooklyn, NY

All Directors
 & Officers              960,500             26.1%
as a Group (2 persons)
____________________________

(1)  Based upon issued and outstanding shares computed as follows:
     3,848,222 outstanding shares less 164,544 treasury shares resulting in
     3,683,678 issued and outstanding shares.

(2)  Includes 932,374 shares of record and 12,578 shares owned by Mrs.
     Phyllis Kravitz, Mr. Bernard Kravitz' wife.

(3)  Does not include 123,069 shares owned by the Company's Savings and
     Investment Plan under section 401(k) of the Internal Revenue Code, for
     which Mr. Kravitz and Mr. Gross serve as trustees.

Item 12.  Certain Relationships and Related Transactions.

     Effective as of January 31, 1994, the Company and Apple Bank for
Savings (the "Bank") entered into a Restructuring Agreement whereby the
Bank agreed to forgive a portion of existing indebtedness of the Company
and to restructure the balance.  In October 1988, the Company had obtained
from the Bank a Commercial Equity Line in the original principal amount of
$1 million (the "Original Mortgage") and in 1990 the Company had obtained
certain other asset-based loans from the bank in the principal amount of
$283,850 (the "1990 Loans").  Pursuant to the Restructuring Agreement: (i)
the Bank agreed to forgive $376,146.59 of accrued and unpaid interest
stemming from the Original Mortgage and the 1990 Loans; (ii) the 1990 Loans
were replaced by a new term loan in the principal amount of $283,850, (the
"$283,850 Term Loan") structured over two five-year periods; (iii) the
remaining balance of $750,000 outstanding on the Original Mortgage was
replaced by a new $415,000 Mortgage Loan (the "Mortgage Loan") plus two
additional Term Loans of $167,500 each (the "$167,500 Term Loan" and the
"Additional $167,500 Term Loan").

     Pursuant to the Restructuring Agreement, the $283,850 Term Loan and
the $167,500 Term Loan would also be convertible, at the Bank's sole
discretion, into Common Stock of the Company at prices ranging from $.75
per share to $1.25 per share provided that the Bank could not acquire more
than 15 percent of the number of then outstanding shares of the Company's
Common Stock.  Such convertibility rights expired upon payment in full of
the balance due on the Mortgage Loan (see below) which occurred on December
31, 1998.

     In addition, pursuant to the Restructuring Agreement, the Bank agreed
that contingent upon the Company achieving certain financial performance
levels during 1994 and 1995, the Bank would forgive, at the end of the
first five-year period, all the deferred interest accrued on the $283,850
Term Loan and the $167,500 Term Loan as well as all of the principal of and
accrued interest on the Additional $167,500 Term Loan.

     In September 1994, the Company was advised that the foregoing loans
were purchased from the Bank by D.A.N. Joint Venture, a Limited
Partnership, an affiliate of the Cadle Company ("D.A.N. Joint Venture").

     As of December 31, 1998, and pursuant to a loan agreement entered into
with The Money Store Commercial Mortgage, Inc., the Company obtained a new
mortgage loan in the principal amount of $384,685 (the "Money Store
Mortgage Loan").  Of such amount, $358,232 was used to satisfy in full the
balance due on the Mortgage Loan.  The Money Store Mortgage Loan is secured
by a first mortgage on the Company's Westbury Property.

     In connection with the above described refinancing, D.A.N. Joint
Venture confirmed and acknowledged that  all the deferred interest accrued
on the $283,850 Term Loan and the $167,500 Term Loan was forgiven,
discharged and canceled and that all of the principal of and accrued
interest on the Additional $167,500 Term Loan was forgiven, discharged and
canceled.

     As a result, the only remaining loans due D.A.N. Joint Venture are the
$283,850 Term Loan and the $167,500 Term Loan.  Such loans have paid
interest only during the first  five year period which ends March 31, 1999.
During the second five-year period, the balances due are required to be
repaid over 60 equal monthly installments, plus interest at prime plus two
percent on the unpaid balances. All of the Company's assets, other than the
Westbury Property, are pledged to the foregoing remaining loans due to
D.A.N. Joint Venture.

Item 13.  Exhibits, List and Reports on Form 8-K.

     (a)  Exhibits.

      3.1  Company's certificate of incorporation, as  amended(1)
      3.2  Company's by-laws(1)
      4.1  Specimen of common stock certificate(1)
     10.1  Restructuring Agreement between Dionics, Inc. and Apple Bank for
           Savings dated as of January 31, 1994(1)

(1)  Previously filed and incorporated herein by reference.

     (b)  Reports on Form 8-K.

     Listed below are reports on Form 8-K filed during the last quarter of
the period covered by this report:

     None.


                            SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

                                   DIONICS, INC.
                                   (Registrant)


                                   By:/s/Bernard Kravitz
                                   Bernard Kravitz, President


                                   Dated: March 12, 1999


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant, and in the capacities and on the dates indicated:

Signature               Title                   Date



/s/Bernard Kravitz      President, Secretary,   March 12, 1999
Bernard Kravitz         Treasurer,  Director
                        (Principal Executive
                        Officer and Principal
                        Financial Officer)

/s/Solomon Berkowitz    Director                March 12, 1999        
Solomon Berkowitz


<PAGE>
                 ERNEST D. LOEWENWARTER & CO., LLP
                   CERTIFIED PUBLIC ACCOUNTANTS
                        10 EAST 40TH STREET
                     NEW YORK, N.Y. 10016-0200
                         TEL: 212-532-2777
                         FAX: 212-889-9899



Dionics, Inc.
65 Rushmore Street
Westbury, N.Y. 11590



We have reviewed the accompanying balance sheets of Dionics, Inc., as of
December 31, 1998 and December 31, 1997, and the related statements of
operations and cash flows for the years then ended, in accordance with
standards established by the American Institute of Certified Public
Accountants.  All information included in these financial statements are
the representations of the management of Dionics, Inc.


A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data.  It is substantially less
in  scope than an examination 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 reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them
to be  in conformity with generally accepted accounting principles.

                             /s/Ernest D. Loewenwarter & Co., LLP
                             ERNEST D. LOEWENWARTER & CO. LLP
                             Certified Public Accountants



New York, N.Y.
February 4, 1999
<PAGE>

                           DIONICS, INC.

                           BALANCE SHEET


                                         December 31,
                                       1998           1997
                                       (Unaudited)    (Unaudited)


A S S E T S


CURRENT ASSETS:
  Cash                                  $   606,100    $  473,400
  Accounts Receivable Trade
    (Less Estimated Doubtful
    Accounts of $10,000 in 1998
    and 1997) Note 5                        262,100       192,300
  Inventory - Notes 3 and 5                 412,200       359,500
  Prepaid Expenses and Other
    Current Assets                           29,000        25,400

      Total Current Assets                1,309,400     1,050,600



PROPERTY, PLANT AND
  EQUIPMENT - Notes 4 and 5
    (At Cost Less Accumulated
      Depreciation of $1,647,800
      in 1998 and $1,636,100 in
      1997)                                  48,400       50,200

DEPOSITS AND OTHER ASSETS -
 Notes 2 & 4                                 52,500       20,200

   Total                                 $1,410,300   $1,121,000


All amounts have been rounded to the nearest $100.

See Accountants' Review Report

The accompanying notes are an integral part of this statements.

<PAGE>

                           DIONICS, INC.

                           BALANCE SHEET

                                          December 31,
                                       1998         1997
                                       (Unaudited)  (Unaudited)
     L I A B I L I T I E S

CURRENT LIABILITIES:
  Current Portion of Long-Term
    Debt - (Note 5)                    $   70,500   $   26,700
  Accounts Payable                         37,700       54,400
  Accrued Expenses                         78,300       57,200
  Deferred Compensation Payable -
    Current (Note 4)                      120,000       50,000
 Total Current Liabilities                306,500      188,300

Deferred Compensation Payable -
  Non-Current (Note 4)                    446,800      453,000
Long-Term Debt Less Current
  Maturities - (Note 5)                   765,500      802,900

Total Liabilities                       1,518,800    1,444,200

SHAREHOLDERS' EQUITY

Common Shares - $.01 Par Value
  Authorized 5,000,000 Shares
  Issued 3,848,222 Shares in 1998
    and 1997 (Note 6)                     38,400        38,400
Additional Paid-in Capital             1,522,800     1,522,800
Accumulated (Deficit)                 (1,449,100)   (1,663,800)
                                         112,100      (102,600)
Less: Treasury Stock at Cost
  164,544 Shares in 1998 and
  164,544 in 1997                       (220,600)     (220,600)

Total Shareholder's Equity
 (Deficit)                              (108,500)     (323,200)

 Total                                $1,410,300    $1,121,000


All amounts have been rounded to the nearest $100.

See Accountants' Review Report.

The accompanying notes are an integral part of this statement.

<PAGE>

                           DIONICS, INC.

                      STATEMENT OF OPERATIONS


                                          DECEMBER 31,
                                    1998             1997
                                    (Unaudited)      (Unaudited)

SALES                               $1,943,700       $1,801,500

COST AND EXPENSES:
Cost of Sales
   (Including Research
    and Development Costs)           1,297,900        1,264,200
  Selling, General and
   Administrative
   Expenses                            381,000          362,400

Total Costs and Expenses             1,678,900        1,626,600

NET INCOME FROM OPERATIONS             264,800          174,900

DIVIDENDS AND OTHER INCOME              19,600           38,000

                                       284,400          212,900
OTHER DEDUCTIONS:
  Interest Expense                      68,000           65,400

NET INCOME FOR THE YEAR
  BEFORE INCOME TAXES                  216,400          147,500
INCOME TAXES - Note 7                    1,700            1,400

NET INCOME FOR THE YEAR             $  214,700       $  146,100

NET INCOME PER SHARE:
  Primary                                 .058       $     .040
  Diluted - Note 6                        .058             .039

Average Number of Shares
  Outstanding Used
  in Computation
  of Per Share Income
  Primary                            3,683,678        3,683,678

  Diluted (Note 6)                   3,726,035        3,758,570


All amounts have been rounded to the nearest $100.

See Accountants' Review Report.

The accompanying notes are an integral part of this statements.

<PAGE>

                           DIONICS, INC.

                      STATEMENT OF CASH FLOWS

                                           DECEMBER 31,
                                    1998        1997
                                    (Unaudited) (Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Income                          $  214,700  $  146,100
Adjustment to
 Reconcile Net Income
 to Net Cash Provided from
 Operating Activities:
Depreciation and Amortization           11,700      12,500
      Deferred Compensation and
        Related Interest                63,800      60,100
Changes in Operating
Assets and Liabilities:
 (Increase) Decrease
 in Account Receivable                 (69,800)     38,100
(Increase) Decrease in Inventory       (52,700)     42,900
(Increase) Decrease
 in Prepaid Expenses
 and Other Current Assets               (3,600)      5,400
    (Increase) Decrease
  in Deposits and Other
      Assets                           (32,300)      2,900
    (Decrease) in Accounts Payable     (16,700)    (11,800)
    Increase (Decrease)
    in Accrued Expenses                 21,100      (5,200)
Net Cash Provided
 from Operating
 Activities                            136,200     291,000
CASH FLOWS FROM
INVESTING ACTIVITIES:
  Purchase of Equipment                 (9,900)        -0-
CASH FLOWS FROM
FINANCIAL ACTIVITIES:
 Restructuring (Repayment)
 of Debt                                 6,400     (28,500)
NET INCREASE IN CASH                   132,700     262,500
CASH - Beginning of Year               473,400     210,900
CASH - End of Year                  $  606,100  $  473,400


All amount have been rounded to the nearest $100.

See Accountants' Review Report.

The accompanying notes are an integral part of this statements.

<PAGE>

                           DIONICS, INC.

                   NOTES TO FINANCIAL STATEMENTS

                    DECEMBER 31, 1998 AND 1997

NOTE 1 -  BUSINESS:

The Company designs, manufactures and sells silicon semi-conductor
electronic products, as individual discrete components, as multi-component
integrated circuits and as multi-component hybrid circuits.

The individual discrete components are predominantly transistors, diodes
and capacitors, intended for use in miniature circuit assemblies called
"hybrid micro-circuits".

Due to the rapidly changing needs of the marketplace, there are continual
shifts in popularity among the various chip components offered by the
Company.  Taken as a whole, the category of discrete chip components for
the hybrid circuit industry is one of the three main classes of products
offered by the Company.

A second main class of products offered by the Company is encapsulated,
assembled, integrated circuits for use in electronic digital display
functions.

The third main class of products offered by the Company is a range of
hybrid circuits that function as opto-isolated MOSFET drivers and custom
Solid State Relays.



NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

Assets, liabilities, revenues and expenses are recognized on the accrual
basis of accounting.

Cash and Cash Equivalents

The Company considers money market funds to be cash equivalents.

Merchandise Inventory

Inventory is stated at the lower of cost (which represents cost of
materials and manufacturing costs on a first-in, first-out basis) or
market.


                           DIONICS, INC.

                   NOTES TO FINANCIAL STATEMENTS

                    DECEMBER 31, 1998 AND 1997


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)

Property, Plant and Equipment

Property, Plant and Equipment is stated at cost less accumulated
depreciation and amortization.  Expenditures for renewals and improvements
that significantly extend the useful life of assets are capitalized for all
assets. Depreciation is provided over the estimated useful lives of the
individual assets using the straight- line method.

Machine and Equipment          8 Years
Testing Equipment              8 Years
Furniture and Fixtures        10 Years
Building Improvements         10 Years
Building                      25 Years


Deferred Compensation Plan

Future payments required under a plan of deferred compensation adopted in
1987 and revised in 1998, as well as interest accrued thereon are being
charged to operations over the period of expected service.

Bad Debts

The Company maintains a constant allowance for doubtful accounts of
$10,000.

Deferred Mortgage Costs

Costs related to the new Money Store Commercial Mortgage and prior costs
related to the paid off mortgage with D.A.N. Joint Venture are being
amortized as follows:

a) New Costs               $35,800  360 Months Starting 1/1/1999
b) Unamortized Prior Cost   16,200   94 Months

                           $52,000




                           DIONICS, INC.

                   NOTES TO FINANCIAL STATEMENTS

                    DECEMBER 31, 1998 AND 1997


NOTE 3 -  INVENTORIES:
                           December 31,      December 31,
                           1998              1997
                           (Unaudited)       (Unaudited)

Finished Goods             $ 35,800          $ 39,900
Work-in-Process             258,600           193,700
Raw Materials                88,100            90,100
Manufacturing Supplies       29,700            35,800
       Total               $412,200          $359,500


NOTE 4 -    DEFERRED COMPENSATION PAYABLE:

In 1987 the Company entered into an agreement, amended in 1997 and 1998,
which provides for a 72 month schedule of payments to its chief executive
officer.

In connection with the refinancing of the Money Store Loan (see Note 5) a
modified deferred compensation payment schedule commencing January 1, 1999
was agreed to by the Company and it's chief executive officer.

The Company executed a mortgage subordinate to the existing first mortgage
(see note 5) secured by land and building at 65 Rushmore Street, Westbury,
New York 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, the Company has not specifically
designated funds with which to meet these payment requirements.  In view of
its continuing total indebtedness as well as its need for operating
capital, there can be no assurance that the Company 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 the Company's then-current financial
circumstances.  The previously mentioned Life Insurance policy had a cash
surrender value at December 31, 1998 of approximately $4,000, which is
included in other assets.

<PAGE>

                           DIONICS, INC.

                   NOTES TO FINANCIAL STATEMENTS

                    DECEMBER 31, 1997 AND 1996




NOTE 5 -    LOANS PAYABLE -

First Mortgage Loan:

A new loan agreement was entered into between Dionics, Inc. and the Money
Store Commercial Mortgage Inc. effective 12/31/1998.

The loan in the principal amount of $384,685 requires 360 monthly self
liquidating payments.  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.

$358,232 of the above proceeds were used to satisfy the balance of the
Mortgage due D.A.N. Joint Venture in full.

Term Loans:

Term Loan A - Due D.A. N. Joint Venture.

Certain 1990 loans were replaced by a new term loan in the principal amount
of $283,850, (Term Loan A") structured over two five-year periods.  During
the first five-year period, which ends 3/31/99, the Company pays interest
only.  During the second five-year period commencing 4/1/99  the balance
due will be repaid over 60 equal monthly installments, plus interest at
prime plus two percent on the unpaid balance.

 Term Loan C - Due D.A. N. Joint Venture.

Another Term Loan ("Term Loan C") stemming from the Original Mortgage has a
face amount of $167,500 and carries the same interest rate and payment
terms over two five-year periods as the new $283,850 Term Loan A described
in the Paragraph above.

In conjunction with the refinancing of the old mortgage D.A.N. Joint
Venture confirmed and acknowledged that the old mortgage note was paid in
full, that all accrued interest above the 2% stated rate and the principal
and any accrued interest on Term Loan C was forgiven, discharged and
cancelled.

                           DIONICS, INC.

                   NOTES TO FINANCIAL STATEMENTS

                    DECEMBER 31, 1998 AND 1997

NOTE 6 -    STOCK OPTION PLAN

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, 1998, options to acquire 120,000 shares of Common Stock have
been granted under the 1997 Plan.  All of such options were granted on
September 11, 1997 and have an exercise price of $.38 per share.  As of
December 31, 1998, 130,000 options were available for future grant.


NOTE 7 -    INCOME TAXES:

Provision for Corporate Federal, State and Local Income taxes for the year
1998 is as follows:

                        Federal                None

                        State and Local        $1,700

                                               $1,700


As of December 31, 1998 the Company had available a federal operating loss
carry forward of $591,800.  This net operating loss originated in 1990
through 1992 and may be carried forward and expires as follows:

     Year of Origin     Amount         Carry Forward
                                       Expires In

     1990               $293,000       2005

     1991                 65,600       2006

     1992                233,200       2007

                        $591,800