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, 2003

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


         Commission file number 001-03323

                 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 Stock ($.01 par value)

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  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:  $861,200

As of December 31, 2003, the aggregate market value of the Common Stock
held by non-affiliates of the Issuer (2,655,022) was approximately
$425,000.  The number of shares outstanding of the Common Stock ($.01 par
value) of the Issuer as of the close of business on December 31, 2003 was
3,683,678 (excluding 164,544 treasury shares).

   Documents Incorporated by Reference:  None

<PAGE>

                 DIONICS, INC.

               TABLE OF CONTENTS



                     PART I
                                                                  Page

Item 1.        Description of Business                              3

Item 2.        Description of Property                              8

Item 3.        Legal Proceedings                                    8

Item 4.        Submission of Matters to a Vote of Security-Holders  8


                    PART II

Item 5.        Market for Common Equity and
               Related Stockholder Matters                          8

Item 6.        Management's Discussion and
               Analysis or Plan of Operation                        9

Item 7.        Financial Statements                                 11

Item 8.        Changes in and Disagreements with
               Accountants on Accounting
               and Financial Disclosure                             11

Item 8A.       Controls and Procedures                              11


                    PART III

Item 9.        Directors, Executive Officers,
               Promoters and Control Persons;
               Compliance with  Section 16(a)
               of  the Exchange Act                                 12

Item 10.       Executive Compensation                               13

Item 11.       Security Ownership of Certain Beneficial
               Owners and Management
               and Related Stockholder Matters                      16

Item 12.       Certain Relationships and Related Transactions       17

Item 13.       Exhibits and Reports on Form 8-K                     17

Item 14.       Principal Accountant Fees and Services               18

               Signatures                                           20


<PAGE>

                     PART I

Item 1.        Description of Business.

     Business Development

     Dionics, Inc. (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.

     Business of the Company

     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-

<PAGE>

voltaic chips.  Custom Solid State Relays also add the MOSFET output
devices in the same package along with certain other associated components.

     We have also recently developed a fourth main class of products,
"Silicon light-chips", that combine certain aspects of other products,
along with several unique features of their own. This new product area
involves Light Emitting Diodes (LEDs) of different colors being embedded in
carefully shaped depressions in a Silicon chip. The main advantages of the
combination is to enhance the light-delivery of the LEDs, as well as to
keep them cool. These Silicon light-chips may be used in lighting systems
that produce white light or mono-colored light. A US Patent was applied for
during 2003, covering this unique structure. The product is already
generating substantial sales volume, and the Company is pursuing other
related applications.

     The percentage of total revenues for each of the four product
classes was in excess of fifteen (15%) percent in 2003.

     (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.
The Company also has another patent pending related to the Silicon light-
chips.

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

     (vi) Customers to whom, for the fiscal year ended December 31,
2003, sales were made equal to approximately 10% or more of the Company's
sales were as follows:

                                   Approximate
                                   Percentage
               Name                of Business

               Customer "A"             18.2%
               Customer "B"             15.6%

     The Company's third largest customer accounted for approximately
6.0% of the Company's sales for 2003.  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

<PAGE>

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, 2002 approximately $66,400 and at December 31,
2003 approximately $166,100.

     (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:

                         2001 -  $55,000
                         2002 -  $30,000
                         2003 -  $30,000

     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 18.  The
Company's employees are not represented by unions and/or collective
bargaining agreements.

     Other Information - Loans Payable

     D.A.N. Joint Venture

     In July 2001, the Company entered into an agreement (the "July 2001
Agreement") with D.A.N. Joint Venture, a Limited Partnership, an affiliate
of the Cadle Company ("D.A.N. Joint Venture"), with regard to certain
matters involving Term Loan A and Term Loan C, the only remaining loans due
to D.A.N. Joint Venture under a certain Restructuring Agreement entered
into as of January 31, 1994 with Apple Bank for Savings (the "Bank").
D.A.N. Joint Venture is the assignee of the Bank with respect all of the
Bank's rights under the Restructuring Agreement which restructured certain
previous loans made by the Bank to the Company.

     Pursuant to July 2001 Agreement, D.A.N. Joint Venture agreed to
accept the sum of $57,500 in full and complete settlement of the total
unpaid accrued interest of $86,096.13 on Term Loan A and Term

<PAGE>

Loan C.   In
addition, pursuant to the July 2001 Agreement, the parties agreed that the
principal balance due on Term Loan A and Term Loan C shall be paid in 32
consecutive monthly installments commencing August 1, 2001 and interest on
both loans shall be paid monthly in arrears commencing August 1, 2001.  As
of the date of the July 2001 Agreement, the principal balance owing on Term
Loan A was in the amount of $151,386.76  and the principal balance owing on
Term Loan C was in the amount of $89,335.20.  All of the Company's assets,
other than the Westbury Property (as defined in Item 2 below), have been
pledged to the foregoing remaining loans due to D.A.N. Joint Venture.

     In September 2002, due to its severely negative cash flow, the
Company became unable to make payments of principal and interest under Term
Loan A and Term Loan C.  Attempts to negotiate a payment moratorium with
D.A.N. Joint Venture were unsuccessful and, in December 2002, D.A.N. Joint
Venture commenced an action against the Company in the Supreme Court of the
State of New York, County of New York.  Subsequently, D.A.N. Joint Venture
and the Company agreed to resolve such issues, the action was discontinued
and an amendatory agreement was entered into between the parties.  Pursuant
to an Amendatory Agreement dated January 2, 2003 between D.A.N. Joint
Venture and the Company, the parties agreed that (i) as of December 31,
2002 the principal balance on Term Loan A was $90,064 and on Term Loan C
was $53,146; (ii) Term Loan A principal shall be repaid with interest at
the rate of 10.25% per annum in 15 equal consecutive monthly payments of
$6,423 each commencing January 1, 2003 and ending March 1, 2004; (iii) Term
Loan C principal shall be repaid with interest at the rate of 10.25% per
annum in 15 equal consecutive monthly payments of $3,790 each commencing
January 1, 2003 and ending March 1, 2004; and (iv) total past due interest
as of December 31, 2002 on Term Loan A and Term Loan C was in the aggregate
amount of $5,440 and that all payments on Term Loan A and Term Loan C will
be applied first to any accrued and unpaid interest, then to principal, in
accordance with D.A.N. Joint Venture's accounting system.

     The Company has paid the monthly installments since the execution
of the Amendatory Agreement and, in early March 2004, the Company made the
final payments due under Term Loan A and Term Loan C.  As a result, all
amounts due have been paid and there are no remaining loans due D.A.N.
Joint Venture.

     Wachovia Mortgage Loan

     As of December 31, 1998, and pursuant to a loan agreement, the
Company obtained a 30 year mortgage loan in the principal amount of
$384,685 (the "Mortgage Loan").  The Mortgage Loan is held by Wachovia
Small Business Capital ("Wachovia") (formerly First Union Small Business
Capital and, prior thereto, The Money Store Commercial Mortgage, Inc.).  Of
such amount, $358,232 was used to satisfy in full the balance due on a
previously obtained mortgage loan which at the time was held by D.A.N.
Joint Venture.  Interest on the Mortgage Loan 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.  The Mortgage Loan is secured by a first mortgage on the
Company's Westbury Property.

     SBA Loan

     In October 2002, the Company was approved for a disaster loan (the
"SBA Loan") from the U.S. Small Business Administration ("SBA") in the
amount of $305,800.  The Company received all of the proceeds therefrom
during the fourth quarter of 2002 and the first quarter of 2003.  Interest
will accrue at the rate of 4.0% per annum.  The original terms of the SBA
Loan provided for installment payments, including principal and interest,
of $5,632 being paid monthly beginning 25 months from the date of the
promissory note, with a final payment date of seven years from the date of
the promissory note.  In November 2003, the SBA amended the repayments
terms so that the installment payments beginning November 26, 2004 (25
months from the date of the promissory note) shall be in the amount, including

<PAGE>

principal and interest, of $1,570 with a maturity date being
extended to 30 years from the date of the promissory note.  The SBA Loan is
secured by a second mortgage on the Westbury Property subordinate only to
the mortgage held by Wachovia. See, also, Part III, Item 10, "Deferred
Compensation and Other Arrangements" for information on the Standby
Agreement entered into by Bernard Kravitz and the SBA.

     Forward-Looking Statements

     This Form 10-KSB contains certain forward-looking statements and
information that reflect the Company's expectations about its future
operating results, performance and opportunities that involve substantial
risks and uncertainties.  When used in this Form 10-KSB, the words
"anticipate", "believe", "estimate", "plan", "intend" and "expect" and
similar expressions, as they relate to Dionics, Inc. for its management are
intended to identify such forward-looking statements.  These forward-
looking statements are based on information currently available to the
Company and are subject to a number of risks, uncertainties, and other
factors that could cause the Company's actual results, performance,
prospects and opportunities to differ materially from those expressed in,
or implied by, these forward-looking statements.  Factors that could cause
or contribute to such differences include, but are not limited to, the
following:

     -    Our operating results may fluctuate because of a number of
factors, many of which are beyond our control.  Some of these factors that
affect our results but which are difficult to control or predict are: the
reduction, rescheduling or cancellation of orders by customers whether as
a result of slowing demand for our products, stockpiling of our products or
otherwise; fluctuations in the timing and amount of customer requests for
product shipments; fluctuations in product life cycles; changes in the mix
of products that our customers buy; competitive pressures on selling
prices; the ability of our customers to obtain components from their other
suppliers; and general economic conditions.

     -    We have experienced reduced sales and have suffered net
losses since the end of fiscal 2000.  For the year ended December 31, 2000,
the Company had sales of approximately $2,434,000.  Since then, we have had
sales of approximately $1,734,000 in 2001, $628,000 in 2002 and $861,000 in
2003.  For the year ended December 31, 2000, we had net income of
approximately $259,000.  Since then, we had a net loss of approximately
$297,000 for the year ended December 31, 2001, $618,000 for the year ended
December 31, 2002 and $275,000 for the year ended December 31, 2003.  There
can be no assurances that operations will improve in the future.

     -    As a result of the Company's recurring losses and net
capital deficiency, the Company's independent auditor's report, dated March
1, 2004, for the year ended December 31, 2003, states that these conditions
raise substantial doubt about the Company's ability to continue as a going
concern.

     -    Our customers are concentrated, so the loss of one or more
key customers could significantly reduce our revenues.  In 2003,
approximately 40% of our revenues were from three customers.  The loss of
any of these customers could have a material adverse effect on the Company.

     -    Our markets are subject to rapid technological change, so
our success depends heavily on our ability to develop and introduce new
products.

     -    The markets in which we compete are highly competitive and
subject to rapid technological change and pricing pressures.

     -    We are dependent on key personnel.  Due to the specialized
nature of our business, our success depends in part upon attracting and
retaining the services of qualified managerial and technical personnel.

<PAGE>

     -    Our stock price experiences significant volatility.  The
market price of the Common Stock, which currently is quoted in the "pink
sheets", has, in the past, fluctuated substantially over time and may in
the future be highly volatile.  In addition, the Company believes that
relatively few market makers make a market in the Company's Common Stock.
The actions of any of these market makers could substantially impact the
volatility of the Company's Common Stock.

     Except as required by the Federal Securities Law, the Company does
not undertake any obligation to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after the
date of this Form 10-KSB or for any other reason.


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.

     See Part I, Item 1, "Other Information - Loans Payable" for
information on the action commenced in December 2002 against the Company by
D.A.N. Joint Venture in the Supreme Court of the State of New York, County
of New York, which action was discontinued in January 2003.

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


Item 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.

     Market Information

     The Company's Common Stock is traded in the over-the-counter market
and is quoted in the "pink sheets" promulgated by the Pink Sheets LLC.
Until March 2000, the Company Common Stock was also quoted on the OTC
Bulletin Board. The following chart sets forth the range of the high and
low bid quotations for the Company's Common Stock for each period
indicated.

<PAGE>


                                                     Bid Prices
Period                                             High      Low

Year ended December 31, 2002:

     Jan. 1, 2002 to March 31, 2002               $0.16     $0.075
     April l, 2002 to June 30, 2002               $0.26     $0.15
     July 1, 2002 to Sept. 30, 2002               $0.15     $0.10
     Oct. 1, 2002 to Dec. 31, 2002                $0.10     $0.032


Year ended December 31, 2003:

     Jan. 1, 2003 to March 31, 2003               $0.06     $0.05
     April l, 2003 to June 30, 2003               $0.06     $0.051
     July 1, 2003 to Sept. 30, 2003               $0.06     $0.06
     Oct. 1, 2003 to Dec. 31, 2003                $0.12     $0.06

     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.

     Holders

     As of December 31, 2003 there were approximately 370 record holders of
the
Company's Common Stock.

     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

     Before we discuss 2003, it is necessary to set the stage for
that discussion by quickly reviewing 2002, the immediately
preceding year. Although that preceding year was a financial
horror-story for Dionics, it did have one saving grace: it ended
on a high note with a last-minute SBA loan that literally rescued
the cash-starved Company. As a result, we lived to fight another
day or, more correctly, another year. Responding to our loan
request, and applying its own formula to the existing
circumstances, the Small Business Administration had determined
that the Company was qualified to receive a seven-year loan, with
very favorable terms, in the amount of $305,800. This was done
under a federal program that provided relief to companies that
had suffered direct or indirect financial damage as a result of the
terrorism events of 9/11. Dionics qualified for that program
because the events of 9/11 had caused a drastic deterioration in
the aircraft manufacturing industry, previously the primary
component of the Company's sales base. Although the terms of the
SBA loan were quite favorable to the Company they did,
nevertheless, require its chief executive officer
to agree to a moratorium on receipt of any Deferred Compensation he
was otherwise entitled to, until the loan was repaid. Such was the
background at Dionics as we entered 2003.

     The grim business environment of the last two years had caused
the annual sales volume in 2002 to drop to one-fourth of its level
in 2000. Although the Company had survived, its previous cash
resources had been totally depleted. As we entered 2003,
only the SBA funds were available to operate

<PAGE>

with, and a
significant portion of that was needed to pay long overdue Accounts
Payable. Sales were still at a low level as the year opened, and
the Company was operating in a strict survival mode in terms of
how it spent its remaining funds. As the year progressed, however,
although still operating with negative cash-flow, the Company's
quarterly sales volumes steadily recovered to the point where the
Third Quarter was almost at breakeven. It was reasonable to think
that the Fourth Quarter would see the Company cross over into
profitability, fulfilling both our plans and our needs. Alas, it
was not meant to be.

     Finding our customers themselves temporarily "between-orders,"
the Company's incoming business dropped off, pulling Fourth Quarter
sales volume back to the First Quarter level. Cash-flow turned
sharply negative, and the Company found itself in almost exactly
the same position as one year earlier, almost terminally starved
for cash. An attempt to secure an increase in our SBA loan was
successful only in extending it from a seven-year loan to a 30-year
loan, with an appropriate reduction in monthly payments. This,
however, put no new cash in our hands, and Management was
pressed to take still more desperate measures.

     Perhaps the last thing a company would want to do is reveal to
its customers that it is having serious cash problems. With
extinction staring it in the face, the Management of Dionics
hand-picked a few customers it felt had a special reason for
wanting Dionics to survive. The reason, for the most part, was the
fact that Dionics was supplying a product that was not easily
replaced elsewhere. We were fortunate to find one satisfied,
long-term customer who also saw Dionics as a "partner" in its own
view of business relationships. They not only agreed to immediately
purchase inventory that would not be needed until years in the
future, but even agreed to advance payment for a large portion of
it. This was truly more than we could have hoped for and, once
again, a last-minute rescue gave us another lease on life. Early in
2004, as this document is being written, business has taken another
upturn, and we may again dare to think we will experience yet one
more "life-after-death" recovery. With many banana-peels still on
the road, however, we can justify only "cautious optimism."
(Were we more deserving, we might begin to wonder if the numerous
recent brushes with corporate death, all happily avoided, did not
possibly suggest the presence of Divine Intervention. Considering
the stresses involved in both the gut-wrenching "downs" and
the exhilarating "ups," we are reminded of what one of Mark Twain's
characters said about the prospect of his being tarred, feathered
and run out of town on a rail, "If not for the honor of it all, I'd
just as soon pass it up.")

     Now, returning to the real world, we point out that the ratio
of Total Current Assets to Total Current Liabilities at year end
2003 was 2.05. This compares to 3.21 at year end 2002, a ratio that
was calculated on the same basis as currently, meaning
Deferred Compensation is defined as a long-term liability per the
SBA loan requirement. Working Capital at year end 2003 was $235,600
as compared to $548,400 at year end 2002. Shareholder's Equity
showed a Net Deficiency of $820,700 at year end 2003, as compared
to a Net Deficiency of $545,900 at year end 2002. For both years,
it should be pointed out, a calculation using the estimated
"market-value" of the Company's real estate property, instead of
its heavily depreciated "book-value," would produce positive
Shareholder's Equity results instead of Net Deficiencies.

B.   RESULTS OF OPERATIONS

     Operating results in 2003 recovered somewhat from those of
2002, but clearly not enough. Sales volume for 2003 was $861,200, a
rise of 37 % from the $628,200 level of 2002, but still down about
50% from the $1,734,300 of 2001. The year 2003 produced a Net Loss
of $274,800, reduced significantly from the $617,900 Net Loss of
2002 and even slightly lower than the Net Loss of $296,700 in 2001.
The losses, of course, are the direct result of sharply lower sales
volume imposed on an operating structure that contains many fixed
costs or costs that cannot easily be reduced as sales volume falls
off. Nonetheless, it is interesting to note that by taking numerous
cost-reduction steps, the Company was able to shrink its 2003
losses by almost 45% on a sales increase of only 37% above those of
2002. Further interesting to note is the fact that
the $274,800 Net Loss for 2003, on sales volume of $861,200 is
actually

<PAGE>

less than the $296,700 Net Loss of 2001, on sales volume
of $1,734,300. In other words, although 2003 sales volume was half
as much as in 2001, the Net Loss was actually lower. This
reflected clearly our ability to make downward adjustments in
operating expenses and, simply put, to cope. While these
comparisons may be seen as somewhat complimentary to Management's
abilities, the perpetual state of emergency we operated in all
year, sandwiched between two almost fatal cash-shortages, leaves
that "compliment" more in the category of "cold-comfort." That we
have survived at all is satisfaction enough, and any implied
compliment is one that must be fully and completely shared with all
our long-suffering but intensely loyal employees.

     In spite of its cash shortages, the Company, almost as a
corporate philosophy, continued to pursue improvement to its
products and technology. While there are numerous older products
contributing modestly to sales, the real growth potential is
found in our micro-photovoltaic products (MOSFET-drivers and Solid
State Relays) and in our newer, patent-applied-for LED-based
Silicon lighting chips. Both were improved in 2003, even though
Research and Development expenditures were held to the same
$30,000 level as in 2002. And, as the Company continued to pay down
its debts, Interest Expense in 2003 dropped slightly to $41,000 as
compared to $44,800 in 2002.

     Last year in this same section, we referred to 2002 as the
"year from Hell." We survived it, and its follow-up in 2003,
perhaps having learned something about how to stay cool, even in
Hell. Obviously, we could not have done anything to offset the
9/11 terrorism events, nor the ruinous economic consequences that
followed. The only things we could have done, we have done, namely
to cut costs and try to raise the funds that would permit our
survival. Better economic conditions, as they continue developing,
should permit us to get back on a growth track, and may even make
it easier for us to secure new funding to apply to that substantial
growth potential. We are often in conversations with potential
investors and, although no guarantees can be given, we remain
hopeful that someday we will have a success to report. It is worth
repeating our concluding remarks from last year, proven largely
true by recent events: "Dionics will not go quietly into the night
and, if our fight is successful, we will not go there at all."

     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 the Financial Statements annexed to this report.


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

     None.


Item 8A.  Controls and Procedures.

     The Company's Chief Executive Officer and Principal Financial
Officer has reviewed the Company's disclosure controls and
procedures as of the end of the period covered by this report.
Based upon this review, such officer believes that the
Company's disclosure controls and procedures are effective in
timely alerting him to material information required to be included
in this report. There have been no significant changes in internal
control over financial reporting that occurred during
the fiscal year

<PAGE>

covered by this report that have materially
affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

                       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      70        President, Secretary,       1969
                               Treasurer

David M. Kaye        49        None(1)                     2000
_________________________

 (1) A partner of Danzig Kaye Cooper Fiore & Kay, LLP, which firm
provides certain legal services to the Company.

     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.

     Identity of Executive Officers



                                                            Officer
Name                     Age       Position                 Since

Bernard Kravitz          70        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.

     Family Relationships

     None.

     Business Experience

     (i)  Bernard Kravitz has been President and a Director of the
Company since 1969 and Secretary and Treasurer since 1992.

     (ii) David M. Kaye has been a Director of the Company since
December 2000. Mr. Kaye is an attorney and has been a partner in the
law firm of Danzig Kaye Cooper Fiore & Kay, LLP (formerly Danzig
Garubo & Kaye, LLP) located in Florham Park, New Jersey, since the
firm's inception in February 1996.  Such firm provides certain legal
services to the Company. Since 1980, Mr. Kaye has been a practicing
attorney in the New York City metropolitan area specializing in
corporate and securities matters.

<PAGE>

     During 2003, fees of $11,430 were billed by Danzig Kaye Cooper
Fiore & Kay, LLP for legal services rendered.

     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, 2003, all Section 16(a) filing requirements applicable
to each person who, at any time during the fiscal year ended
December 31, 2003, was an officer, director and greater than ten
percent beneficial owner, were complied with.

     Code of Ethics

     The Company's Board of Directors has been considering adoption
of a Code of Ethics to be applicable to its Chief Executive Officer
and senior financial executives. The Code of Ethics will be designed
to deter wrong-doing and promote honest and ethical behavior, full,
fair, timely, accurate and understandable disclosure, and compliance
with applicable laws. The Board anticipates it will adopt
the Code of Ethics during the current fiscal year. Following
adoption, a copy of the Code of Ethics will be provided to any
person without charge upon written request to the Secretary of the
Company at its executive offices, 65 Rushmore Street, Westbury,
New York 11590.


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, 2003,
2002 and 2001, 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, 2003 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):

<PAGE>
                       Summary Compensation Table

                             Annual
                         Compensation(1)


Name and Principal  Fiscal
Position            Year          Salary         Bonus

Bernard Kravitz,    2003       $  70,800           $0
President           2002       $  86,200       $1,051(2)
                    2001        $102,000           $0




                             Long-Term
                            Compensation

                                  Restricted     Shares
Name and Principal  Fiscal        Stock          Underlying
Position            Year          Awards         Options

Bernard Kravitz,    2003             $0             0
President           2002         $1,682(2)          0
                    2001             $0             0

___________________________

(1)  Does not include matching contributions paid by the Company for
     Mr. Kravitz during 2001, 2002 and 2003 of $3,935, $3,436 and
     $2,831, 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 2001, 2002 and 2003
     on a life insurance policy it owns and maintains on the life of
     Mr. Kravitz.  Also, does not include (i) $13,764 for each of
     2001, 2002 and 2003 for life insurance premiums on policies
     owned by Mr. Kravitz which amounts were declared as income by
     Mr. Kravitz, and (ii) $100,000 paid to Mr. Kravitz in 2001 which
     amounts represent payment for installments due to Mr. Kravitz
     pursuant to the deferred compensation agreement entered into
     with Mr. Kravitz.  (See subsections "Deferred Compensation and
     Other Arrangements" and "Compensation pursuant to plans"
     elsewhere herein under Item 10).

(1)  See subsection "2002 Stock Compensation Plan" for information
     on the repurchase of shares by the Company from the Company's
     401(k) Plan in February 2002.  The proceeds from the repurchase
     were placed into the respective 401(k) accounts of the employees
     in proportion to the 401(k) Plan shares which had been
     attributed to each of them.  In addition, the Company then
     issued under the 2002 Plan a total of 76,347 shares the same
     number of shares as a bonus to the same eleven employees. As a
     result, $1,051 was deposited into the 401(k) account of Mr.
     Kravitz and Mr. Kravitz was issued 21,019 shares.  The dollar
     value of the award is based on the average of the bid and asked
     prices of the Company's Common Stock on the date of grant.


     Deferred Compensation and Other Arrangements

     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.

     The Company has a Split-Dollar Endorsement Agreement with Mr.
Kravitz which provides that the Company will maintain a whole life
policy on the life of Mr. Kravitz for the face amount of $500,000. Upon
the death of Mr. Kravitz, the Company shall have an interest in the
proceeds of the policy equal to the policyowner's death benefit share
and the balance remaining shall be paid by the insurance company to the
beneficiary or beneficiaries designated by the policy.   Such policy is
currently in effect and paid for by the Company.

     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 and as required by the lender (see Part I, Item 1, "Other
Information - Loans Payable"), a modified deferred compensation

<PAGE>

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
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 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.  Pursuant to a Standby Agreement entered into
with the SBA (see "Part I, Item 1, "Other Information - Loans Payable"),
Mr. Kravitz has agreed to take no action under the deferred compensation
agreement to collect any amounts due to him thereunder so long as the
SBA Loan is outstanding, unless authorized by the SBA.  The previously
mentioned life insurance policy had a cash surrender value of $3,800
at December 31, 2003, which is net of loans in the amount of $118,900.
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.   See, however, Part I, Item
1, "Other Information - Loans Payable" for information on the SBA Loan.
In connection therewith, Mr. Kravitz agreed to subordinate his mortgage
in favor of the SBA.

     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 2001, 2002 and 2003.

<PAGE>

     Compensation of Directors

     During the year ended December 31, 2003, no compensation was
paid to the Company's one non-employee incumbent director for his
services as such and the Company presently intends that the same will
be the case for the year ending December 31, 2004.

     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, 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, (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.  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 have been granted to the
executive officer named in the Summary Compensation Table (Mr. Kravitz).

     2002 Stock Compensation Plan

     In February 2002, the Board of Directors of the Company adopted
the 2002 Stock Compensation Plan (the "2002 Plan") which permits up to
150,000 shares of Common Stock to be awarded to employees, officers,
directors or consultants of the Company.

     Contemporaneously with the adoption of the 2002 Plan, the
Company repurchased 76,347 shares of Common Stock from the Company's
401(k) Plan, which were the only remaining shares of Common Stock of the
Company in the 401 (k) Plan.  These shares had been contributed by the
Company to the 401(k) Plan during 1993.  The amount paid in February was
$3,817 or $.05 per share which management determined to be the fair
purchase price.  The proceeds from the repurchase were placed into the
respective 401(k) accounts of the employees in proportion to the 401(k)
Plan shares which had been attributed to each of them.  In addition, the
Company then issued under the 2002 Plan the same number of shares as a
bonus to the same eleven employees.   No other shares have been granted
under the 2002 Plan.  As a result, as of December 31, 2003, 76,347
shares have been granted under the 2002 Plan, leaving 73,653 shares
available for future grant.

     Termination of Employment and Change of Control Arrangements

     None.


Item 11.  Security Ownership of Certain Beneficial Owners and
          Management and Related Stockholder Matters.

     The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 31,
2003, by (i) each person who is known by the Company

<PAGE>

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                    704,551(2)          19.1%
65 Rushmore Street
Westbury, NY

Keith Kravitz                      324,105            8.8%
110-11 Queens Blvd.
Forest Hills, NY

David M. Kaye                            -              -
30A Vreeland Road
Florham Park, NJ

All Directors & Officers           704,551           19.1%
as a Group (2 persons)
____________________________
(1)  Based upon issued and outstanding shares computed as follows:
     3,848,222 issued shares less 164,544 treasury shares resulting
     in 3,683,678 issued and outstanding shares.

(2)  Includes 687,036 shares of record and 17,515 shares owned by
     Mrs. Phyllis Kravitz, Mr. Bernard Kravitz' wife. Does not
     include 324,105 shares owned by Keith Kravitz, adult son of
     Bernard Kravitz.  Bernard Kravitz disclaims any beneficial
     ownership with respect to any shares owned by Keith Kravitz.


Item 12.  Certain Relationships and Related Transactions.

     See Part III, Item 10, "Deferred Compensation and Other
Arrangements" for information on certain arrangements entered into with
Mr. Kravitz.


Item 13.  Exhibits 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)
10.2 Agreement dated as of July 11, 2001 between Dionics, Inc. and
     D.A.N. Joint Venture, a Limited Partnership(1)
10.3 Amendatory Agreement dated as of January 2, 2003 between
     Dionics, Inc. and D.A.N. Joint Venture, a Limited Partnership(1)
31.1 Certification of Chief Executive Officer pursuant to Section 302
     of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of
     the Exchange Act)

<PAGE>

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

(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.


Item 14.  Principal Accountant Fees and Services.

     The following is a summary of the fees billed to us by the
principal accountants to the Company for professional services rendered
for the fiscal years ended December 31, 2003 and 2002:

                            Fiscal     Fiscal
                            2003       2002
Fee Category                Fees       Fees


Audit Fees                  $20,160     $20,340
Audit Related Fees          $     0     $     0
Tax Fees                    $ 2,240     $ 2,260
All Other Fees              $     0     $     0

Total Fees                  $22,400     $22,600

     Audit Fees.  Consists of fees billed for professional  services
rendered for the audit  of  our   financial   statements  and  review
of  interim consolidated  financial  statements  included in quarterly
reports and services that  are  normally  provided  by the principal
accountants in  connection  with  statutory  and regulatory filings or
engagements.

     Audit Related Fees. Consists of fees billed for assurance and
related services that are reasonably related to the performance of the
audit or review of our consolidated financial statements and are not
reported under "Audit Fees".

     Tax Fees. Consists of fees billed for professional services for
tax compliance, tax advice and tax planning.  These services include
preparation of federal and state income tax returns.

     All Other  Fees.  Consists of fees for  product  and  services
other  than the services reported above.

<PAGE>

     Pre-Approval Policies and Procedures

     Prior to engaging its accountants to perform a particular
service, the Company's Board of Directors obtains an estimate for the
service to be performed. All of the services described above were
approved by the Board of Directors in accordance with its procedures.

<PAGE>

                            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 30, 2004




     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,    3/30/04
Bernard Kravitz              Treasurer, Director
                             (Principal Executive
                             Officer and Principal
                             Financial Officer)

/s/ David M. Kaye            Director                 3/30/04
David M. Kaye




<PAGE>


DIONICS, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002




<PAGE>

Independent Auditor's Report


Directors and Shareholders
Dionics, Inc.
Westbury, New York

We have audited the accompanying balance sheets of Dionics, Inc. as
of December 31, 2003 and December 31, 2002, and the related statements
of changes in shareholders' deficiency, operations and cash flows for
the year then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We
believe that our audits provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Dionics,
Inc. as of December 31, 2003 and December 31, 2002 and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note
2 to the financial statements, the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in
Note 2.  The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.



               ERNEST D. LOEWENWARTER & CO. LLP
               Certified Public Accountants

Mineola, New York
March 1, 2004


<PAGE>


                DIONICS, INC.

    FOR THE YEARS ENDED DECEMBER 31, 2003
            AND DECEMBER 31, 2002








  INDEPENDENT AUDITOR'S REPORT


  BALANCE SHEET AS AT DECEMBER 31, 2003
    AND DECEMBER 31, 2002


  STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY
    FOR THE YEAR ENDED DECEMBER 31, 2003 AND
    FOR THE YEAR ENDED DECEMBER 31, 2002


  STATEMENTS OF OPERATIONS
    FOR THE YEAR ENDED DECEMBER 31, 2003 AND
    FOR THE YEAR ENDED DECEMBER 31, 2002


  STATEMENTS OF CASH FLOWS
    FOR THE YEAR ENDED DECEMBER 31, 2003 AND
    FOR THE YEAR ENDED DECEMBER 31, 2002


  NOTES TO FINANCIAL STATEMENTS

<PAGE>


DIONICS, INC.


BALANCE SHEET


                                              December 31,
                                          2003           2002



                         A S S E T S


CURRENT ASSETS:
  Cash                                $   13,300     $   28,200
  Accounts Receivable Trade
    (Less Estimated Doubtful
    Accounts of $7,300 in 2003 and
    $10,000 in 2002)- (Notes 2 and 6)     54,400         95,600
  Inventory - (Notes 2, 3 and 6)         368,500        390,200
  Prepaid Expenses and Other
    Current Assets                        24,300         27,100
  SBA Loan Receivable -
    (Notes 4 and 5)                          -0-        255,800

        Total Current Assets             460,500        796,900

PROPERTY, PLANT AND
  EQUIPMENT - (Notes 2 and 6)
    (At Cost Less Accumulated
      Depreciation of $1,693,600
      in 2003 and $1,686,900 in
      2002)                               70,800         67,200

DEPOSITS AND OTHER ASSETS -
 (Notes 2 and 5)                          39,700         42,800

     Total                            $  571,000     $  906,900















All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>


DIONICS, INC.

BALANCE SHEET


                                            December 31,
                                       2003           2002
                                          (Note 2)
L I A B I L I T I E S

CURRENT LIABILITIES:
  Current Portion of Long-Term
    Debt - (Note 5)                $   42,400     $  126,800
  Accounts Payable                    137,200         81,500
  Accrued Expenses                     36,300         40,200

     Total Current Liabilities        215,900        248,500

Long-Term Debt Less Current
  Maturities - (Note 5)               674,800        703,300
Deferred Compensation Payable -
  (Note 4)                            501,000        501,000

     Total Liabilities              1,391,700      1,452,800


COMMITMENT (Note 9)

                SHAREHOLDERS' EQUITY (DEFICIENCY)

Common Shares - $.01 Par Value
  Authorized 5,000,000 Shares
    Issued 3,848,222 Shares in 2003
    and    3,848,222 in 2002 -
    (Notes 5 and 10)                   38,400         38,400
Additional Paid-in Capital          1,522,800      1,522,800
(Deficit)                          (2,161,300)    (1,886,500)
                                     (600,100)      (325,300)
Less: Treasury Stock at Cost
  164,544 Shares in 2003 and
  164,544 Shares in 2002             (220,600)      (220,600)

     Total Shareholders'
        (Deficiency) Equity          (820,700)      (545,900)

      Total                        $  571,000     $  906,900





All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>





STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY

FOR THE YEAR ENDED DECEMBER 31, 2003 AND
FOR THE YEAR ENDED DECEMBER 31, 2002



                                Common Stock         Additional
                               $.01 Par Value        Paid In
                             Number of               Capital
                             Shares       Amount


BALANCE -
  January 1, 2002             3,848,222   $38,400     $1,522,800

NET (LOSS) - YEAR ENDED
  December 31, 2002


BALANCE -
  December 31, 2002           3,848,222    38,400      1,522,800

NET (LOSS) - YEAR ENDED
  December 31, 2003
BALANCE -
  December 31, 2003           3,848,222   $38,400     $1,522,800




                                           Treasury Stock
                                           Number of
                              (Deficit)    Shares        Cost


BALANCE -
  January 1, 2002            $(1,268,600)    164,544    $220,600

NET (LOSS) - YEAR ENDED
  December 31, 2002             (617,900)


BALANCE -
  December 31, 2002           (1,886,500)    164,544     220,600


NET (LOSS) - YEAR ENDED
  December 31, 2003             (274,800)

BALANCE -
  December 31, 2003          $(2,161,300)    164,544    $220,600



All amounts have been rounded to the nearest $100

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>


DIONICS, INC.

STATEMENT OF OPERATIONS


                                             DECEMBER 31,
                                        2003             2002


SALES                               $  861,200       $  628,200

COST AND EXPENSES:
  Cost of Sales (Including Research
and Development Costs)                 749,300          834,700
  Selling, General and Administrative
    Expenses                           346,500          369,100

     Total Costs and Expenses        1,095,800        1,203,800


NET (LOSS) FROM OPERATIONS            (234,600)        (575,600)

DIVIDENDS AND OTHER INCOME               1,700            3,400

                                      (232,900)        (572,200)
OTHER DEDUCTIONS:
  Interest Expense                      41,000           44,800

NET (LOSS) FOR THE YEAR
  BEFORE INCOME TAXES                 (273,900)        (617,000)

INCOME TAXES - (Note 8)                    900              900

NET (LOSS) FOR THE YEAR             $ (274,800)      $ (617,900)

NET (LOSS) PER SHARE:
  Primary                           $    (.075)      $    (.168)

  Diluted - (Note 7)

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

  Diluted (Note 7)



All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>

DIONICS, INC.

STATEMENT OF CASH FLOWS


                                                     DECEMBER 31,
                                                  2003          2002

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss)                                 $ (274,800)   $ (617,900)
  Adjustment to Reconcile Net (Loss)
    to Net Cash Provided from
    Operating Activities:
      Depreciation and Amortization               6,700         8,800
  Changes in Operating Assets and Liabilities:
    Decrease (Increase) in Account Receivable    43,900        46,700
    Decrease in Inventory                        21,700        15,200
    Decrease (Increase) in Prepaid Expenses
      and Other Current Assets                    2,800         6,000
    (Increase) Decrease in Deposits and Other
      Assets                                      3,100        (4,100)
    Increase (Decrease) in Accounts Payable       55,700        26,000
    Increase (Decrease) in Accrued Expenses       (3,900)       16,300
    (Decrease) in Deferred Compensation              -0-       (13,800)
    Decrease in Allowance for Doubtful Accounts   (2,700)          -0-

     Net Cash Used In Operating Activities      (147,500)     (516,800)


CASH FLOWS (USED IN) INVESTING ACTIVITIES:
  Purchase of Equipment                          (10,300)       (1,900)

CASH FLOWS PROVIDED BY (USED IN) FINANCIAL
  ACTIVITIES:
   (Repayment) of Debt                          (112,900)      (54,100)
    SBA Loan                                     255,800        50,000

(DECREASE) IN CASH                               (14,900)     (522,800)

CASH - Beginning of Year                          28,200       551,000


CASH - End of Year                            $   13,300    $   28,200



All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002



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.


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Going Concern Opinion

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.

As shown in the financial statements, the Company incurred a net loss
of $274,800 for 2003 and has incurred substantial net losses for each
of the past two years.  At December 31, 2003 total liabilities
exceeded total assets by $820,700.

In the opinion of management, had the market value of the Company's
real estate property, rather than it's greatly depreciated book value
been included with the Company's assets, then the Company's total
assets would have exceeded total Company liabilities by approximately
$150,000.

In view of these matters, realization of a major portion of the assets
in the accompanying balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the
Company's ability to meet its financing requirements, and the success
of its future operations.  Management believes that actions presently
being taken to revise the Company's operating and financial
requirements provide the opportunity for the Company to continue as
a going concern.

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.


<PAGE>



DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002



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

Research and Development

Research and development costs are charged to operations as incurred.
Management estimates research and development expenses to have been
approximately $30,000 in 2003 and 2002 respectively.


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 asset, using the straight-
line method.  The following asset lives are in effect:

          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 2000, as well as interest accrued thereon have
been charged to operations over the period of expected service.

Reclassifications

Deferred Compensation Payable has been reclassified in 2002 to conform
with 2003 presentation.  This reclassification had no effect on net
income (see Note 4).

Bad Debts

The Company maintained an allowance for doubtful accounts of $7,300
in 2003 and $10,000 in 2002.

<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002



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

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 as follows:

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

                            $52,000


Major Customers:

In 2003 approximately $158,000 (18.35%), $128,000 (14.86%) and $52,000
(6.04%) of the Company's revenues were from the three largest
customers.  Accounts receivable from such customers approximated
$23,000 at December 31, 2003.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and related notes to financial statements.  Changes in such
estimates may affect amounts reported in future periods.



NOTE 3 -  INVENTORY:

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, and are comprised of the following:

                          December 31,      December 31,
                              2003              2002
                           (Audited)         (Audited)
Finished Goods               $ 76,700         $ 75,000
Work-in-Process               216,000          221,100
Raw Materials                  42,700           56,900
Manufacturing Supplies         33,100           37,200


                 Total       $368,500         $390,200

<PAGE>

DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002





NOTE 4 -  DEFERRED COMPENSATION PAYABLE:

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

In connection with the refinancing of the Wachovia Small Business
Capital (formerly First Union Small Business Capital) (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.

Under the standby agreement of the SBA Loan (see Note 5) the chief
Executive will take no action on the deferred compensation unless
authorized by the lender. (See Note 2)

The previously mentioned life insurance policy had a cash surrender
value at December 31, 2003 of $122,700 and is shown net of loans in
the amount of $118,900 under other assets.


<PAGE>

DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002


                                                December 31,
                                              2003       2002
NOTE 5 -  LOANS PAYABLE -

First Mortgage Loan:

A new loan agreement was entered into
between Dionics, Inc. and Wachovia
Small Business Capital (formerly the
First Union Business Capital)
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.                          $368,000   $371,100

$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 ended 3/31/99, the
Company paid interest only.  During the
second five-year period commencing 4/1/99
the balance due was to be repaid over 60
equal monthly installments, plus interest
at prime plus two percent on the unpaid
balance.

By agreement between D.A.N. Joint
Venture and the Company the principal
balance of Term Loan A at December 31,
2002 was as follows:

Term Loan A    Principal $90,064                22,000     96,364
               Interest    6,300

<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002

                                                 December 31,
                                                 2003     2002
NOTE 5 -  LOANS PAYABLE - (Continued)

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.

By agreement between D.A.N. Joint
Venture and the Company the principal
balance of Term Loan C at December 31, 2002
was as follows:

Term Loan C Principal    $53,146                  13,000    56,846
Interest                   3,700

Total past due interest on Term Loan A
and C as at December 31, 2002 was
agreed to be $5,440. (Accrued at
December 31, 2002)

SBA Loan.

On October 20, 2002 an SBA Loan
in the amount of $305,800 was
approved                                          305,800  305,800

Payment Terms

A) Interest will accrue at the rate
of 4.000% per annum; installment
payments, including principal and
interest, of $1,570 monthly, will
begin 25 months from the date of the
promissory note.  The balance of
principal and interest will be
payable 30 years from the date of the
promissory Note.

B) 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
principal.

<PAGE>

DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002



                                                   December 31,
                                                 2003      2002
NOTE 5 -  LOANS PAYABLE - (Continued)

SBA Loan.

C) Interest will accrue only on funds
actually advanced from the date(s) of
each advance, but in no case sooner
than 24 months from the date of the
promissory Note

Collateral.

Dionics, Inc. will provide the
following collateral:

A) Deed of Trust/Mortgage on real
estate located at 65 Rushmore Street
Westbury, New York 11590.  Said Deed
of Trust/Mortgage to be subject only
to the following:

1. Trust Deed/Mortgage held by
Wachovia Small Business Capital
with a balance of $368,000 and
$371,100 as of December 31, 2003
and 2002 respectively.

Equipment Lease

A 60 month equipment lease was entered
into between the Company and Marlin
Leasing Corp. for a Sharp Copying
Machine.  The lease term was for
an initial term of 60 monthly
payments of $170.
                                                8,400

Total Loan Payable                            717,200   830,100

Less: Amount due within one year               42,400   126,800

Long-Term Portion                            $674,800  $703,300

<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002




NOTE 6 -  COLLATERALIZED ASSETS -

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


NOTE 7 -  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, 2002, 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 market price of
the Company's Common Stock was below the exercise option at December
31, 2002 and the Company had net loss for the twelve months ended
December 31, 2003, the options were Anti-Dilutive.


NOTE 8 -  INCOME TAXES:

As of December 31, 2003 the Company had available a federal operating
loss carry forward of $1,366,200.  This net operating loss originated
in 1992, 2002 and 2003 and may be carried forward and expires as
follows:

Year of Origin   Amount      Carry Forward
                             Expires In

1992           $  115,200          2007

2001              373,000          2016

2002              603,000          2017

2003              275,000          2018

               $1,366,200

<PAGE>

DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002


NOTE 9 -  COMMITMENT

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 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 his life, but currently remains unfunded.


NOTE 10 - BONUS PAID IN COMPANY SHARES:

On February 15, 2002 the Company repurchased 76,347 shares of Dionics,
Inc. shares of common stock from the Company's 401(k) Plan.  These
shares had been contributed by the Company to the 401(k) Plan during
1993.  The amount paid on February 22, 2002 was $3,817.35 or $.05 per
share which management determined to be the fair purchase price.  The
proceeds from the repurchase were placed into the respective 401(k)
accounts of the employees in proportion to the 401(k) Plan shares
which had been attributed to each of them.  In addition, the Company
then issued the same number of shares as a bonus to the same eleven
employees.  The employees may not dispose of these share in less than
one year as these were unregistered shares.  There are no more shares
of Dionics, Inc. remaining in the Company 401(k) Plan.  The outlay of
$3,817.35 has been charged as an expense to the various departments
of the Company.  Such 76,347 shares issued in February 2002 were
distributed under the Company 2002 Stock Compensation Plan (the "2002
Plan") which was adopted by the Company in February 2002.  The Company
may issue up to 150,000 shares under the 2002 Plan.  As of December
31, 2003, no other shares have been granted under the 2002 Plan.