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, 2002

[ ] 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:  $628,200.

As of March 14, 2003, the aggregate market value of the Common
Stock held by non-affiliates of the Issuer (2,655,022 shares) was
approximately $159,000.  The number of shares outstanding of the
Common Stock ($.01 par value) of the Issuer as of the close of
business on March 14, 2003 was 3,683,678 (excluding 164,544
treasury shares).

 Documents Incorporated by Reference:  None

<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-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 2002.

     (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) None of the Company's customers accounted for 10%
or more of the Company's sales for 2002.  The Company's three
largest customers for 2002 were as follows:

                              Approximate
                              Percentage
          Name                of Business

          Customer "A"             7.4%
          Customer "B"             7.2%
          Customer "C"             6.4%

     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, 2001 approximately $217,200 and at December 31, 2002
approximately $66,400.

     (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:

           2000 -  $55,000
           2001 -  $55,000
           2002 -  $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 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), are 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.

     First Union Mortgage Loan

     As of December 31, 1998, and pursuant to a loan agreement
entered into with The Money Store Commercial Mortgage, Inc. (now
known as First Union Small Business Capital), the Company obtained
a 30 year mortgage loan in the principal amount of $384,685 (the
"First Union Mortgage Loan").  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 First Union 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
First Union 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 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, with
installment payments, including principal and interest, of $5,632
being paid monthly beginning 25 months from the date of the
promissory note.  The balance of the principal and interest will
be payable seven years from the date of the promissory note.  The
loan is secured by a second mortgage on the Westbury Property
subordinate only to the mortgage held by First Union. 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 declining 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 and approximately $628,000 in 2002.  For the
year ended December 31, 2000, we had net income of approximately
$259,000, while for the year ended December 31, 2001 we had a net
loss of approximately $297,000 and for the year ended December 31,
2002 we had a net loss of approximately $618,000.  There can be no
assurances that operations will improve in the future.

     -    Our customers are concentrated, so the loss of one
or more key customers could significantly reduce our revenues.  In
2002 and 2001, approximately 21% and 52%, respectively, 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.

     -    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

em 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.

                                        Bid Prices
Period                             High           Low

Year ended December 31, 2001:

Jan. 1, 2001 to March 31, 2001     $0.20          $0.12
April l, 2001 to June 30, 2001     $0.20          $0.16
July 1, 2001 to Sept. 30, 2001     $0.15          $0.15
Oct. 1, 2001 to Dec. 31, 2001      $0.15          $0.10

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

     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 March 14, 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

     It is difficult to imagine a year being any worse than 2002
was for Dionics, Inc. The Company was not simply at the brink, it
was over the brink and yet, incredibly, it managed by yearend to
hang on and pull itself back to moderately firm ground. The year had
started off poorly, with sales at low levels not seen in decades,
a condition stemming from both the specific 9/11 terrorism event of
2001 and the generally slow national economy that existed at the
start of 2002. Optimism that a turnaround would shortly materialize
gradually gave way to the stark realization that it would be a long,
slow process. By midyear, the Company was also facing its worst-case
scenario, a dangerously depleted cash reserve. To help stem the tide
of negative cash flow, the Company was forced to temporarily
furlough a number of employees and to severely reduce the work-hours
of the remaining staff, simultaneously signing them up for the
partial unemployment benefits of New York State's "shared work"
program. Although the negative cash flow level was reduced, its
slower, continuing effect was nevertheless pushing the Company
inexorably toward the point of no return. Matters were even further
complicated by the fact that the Company's cash shortage had pushed
it into a default condition on two long-term debts it had with the
Cadle Company. Efforts to negotiate a payment moratorium had been
unsuccessful, and that company initiated legal actions against
Dionics in NY State Supreme Court late in the year. An adverse legal
decision would have resulted in the complete shut-down of the
Company, and the sale of its assets to satisfy the debt.

     Finally, a ray of light showed itself. Management became
aware that the Company might be qualified for a special US Small
Business Administration loan-program that was providing relief to
companies that had suffered major damage directly or indirectly from
the terrorism events of 9/11. Following submission of its
application, the Company learned that it was indeed qualified for
SBA assistance. This was based on the fact that the 9/11 event had
caused a drastic deterioration in the aircraft manufacturing
industry that previously had been a major component of the Company's
sales base. By application of its own formula, the SBA determined
that the Company was qualified to borrow $305,800 under generally
favorable terms, although some of those terms did impose a burden
on, and require a considerable personal sacrifice from, the
Company's chief executive officer. It was required that the
Company's chief executive officer agree that, during the seven-year
duration of the loan, he would not receive any of the Deferred
Compensation due him. He was also required to permit the SBA to take
a Second Mortgage position on the Company's building, ahead of his
own, thus greatly reducing the Deferred Compensation security he
previously had. Assigning the critically urgent needs of the Company
a higher priority than his own, the CEO did agree to those terms.
Shortly thereafter, although the SBA funding had not yet been
received, management was able to negotiate a settlement of the
potentially fatal default condition on its long-term debts with the
Cadle Company, causing them to drop their related Supreme Court
action. And finally, in a series of checks at year-end and shortly
after, the Company did receive the urgently needed SBA funding, a
total of $305,800. With not a minute to spare, the Company was able
to immediately pay a large number of its overdue bills and placed
the remainder in a Money Market fund to be used as needed. While the
future could hardly be termed secure, there would be one of at least
a short-term duration.

     With its moderate cushion of SBA funding now in hand, the
Company is currently pursuing improvements in the business outlook
for new products such as LED lighting systems, Implantable Cardiac
Defibrillators (ICDs) and Solid State Relays for the F-16 fighter
aircraft. Recent new order bookings give rise to modest and cautious
optimism that the Company's performance had, in fact, bottomed out
last year and that it is now seeing a slow but steady recovery. On
the critical issue of LIQUIDITY and Cash reserves, management is
hopeful that the worst is over, or almost over, although we remain
for now in a "survival mode" of operations.

     The Company's Cash Account at year-end 2002 was only $28,200
but it listed a remaining $255,800 due on the SBA loan in Accounts
Receivable. All of it has since been received. At year-end 2001, the
Cash Account had been $551,000 and at year-end 2000 it had been
$688,600. With the cost-reduction program the Company adopted in
mid-year 2002, it was able to reduce its monthly negative cash flow
so that the new SBA funding will hopefully support operations until
new Order Bookings and subsequent Shipping return the Company to at
least cash flow breakeven levels. It is anticipated that a Quarterly
cash flow breakeven might be reached by year-end 2003, and that the
SBA funding should provide a financial bridge until that condition
is reached. Of course, there are still many banana-peels on the
road, and there is no reason for anything more than cautious
optimism at this time.

     The ratio of Total Current Assets to Total Current
Liabilities at year end 2002 was 1.19, although removing the
Deferred Compensation item from the equation, reflecting the SBA
loan terms, changes that Current Ratio to 3.21. By comparison, the
Current Ratio at year end 2001 was 2.14 and at year end 2000 it had
been 4.44. Working Capital at year end 2002 was $127,400, but again
by removing Deferred Compensation from the equation it is increased
to $548,500. This compares to Working Capital of $603,400 at year
end 2001 and $1,311,700 at year end 2000. At year end 2002 the
Company had a Net Deficiency of $545,900, which would be reduced to
a Net Deficiency of only $44,900 by removal of the current and long-
term Deferred Compensation due. These compare to a Net Worth at year
end 2001 of $72,000 and $368,700 at year end 2000.

B.   RESULTS OF OPERATIONS

     Operating results in 2002 were extraordinarily poor, a
reflection of both the 9/11 terrorism damage done to the Company's
aircraft-manufacturing sales base and the generally poor national
economy throughout the year of 2002. Sales volume for 2002 was down
to $628,200, a stunning 63.8% decrease from the $1,734,300 level of
2001 and still further down from the $2,433,700 level achieved in
2000. The year 2002 produced a Net Loss of $617,900, as compared to
a Net Loss in 2001 of $296,700, and a Net Profit of $259,300 in the
year 2000. The losses, of course, are the direct result of sharply
lower sales volume, against many costs that are either fixed in
nature or very difficult to reduce as sales volume drops.
Nonetheless, it is quite remarkable that the Company, while seeing
its previous loss-producing annual sales volume drop by over 1.1
million dollars more, was still able to hold the increasing losses
to only an additional $321,200. This attests to the effectiveness
of the cost-reduction programs instituted early, as well as later,
in 2002. While this loss-limiting may be taken as somewhat
complimentary to management, the stark reality of still having
almost gone out of business leaves it in the category of "cold
comfort."


     Research and Development expenditures were reduced in 2002
to only $30,000 as compared to $45,000 in 2001 and $55,000 in 2000.
Nonetheless, the Company continued to pursue improvements in its
products and technology, in spite of being limited by reduced cash
availability. Interest Expense in 2002 dropped to $44,800 from
$88,700 as a result of both lower applicable interest rates and a
lower debt base on which to pay interest.

     As stated at the beginning of this Management's Discussion
section, it would be difficult to imagine a year being any worse
than 2002 was for Dionics, Inc. And yet, here we are writing about
it, not three months after the "year from Hell" ended, with a modest
cushion of SBA-provided cash reserves and a modestly upbeat sales
picture. Having been at the brink, even over the brink, we must
observe that while in the past we have said here that "risks of
failure still persist," we must now re-write that to "possibilities
of survival still exist." One is tempted to say that if we survived
this, we can survive anything. We are heartened in our fight by the
intense loyalty shown on the part of our employees, without whom no
such effort could be made. So, the fight continues, the difficulties
and challenges are many, but one fact stands out 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.


                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     69   President, Secretary,   1969
                         Treasurer

David M. Kaye       48   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     69       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 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. He is also
currently a director of Nutrition Now, Inc., a company which
manufactures and markets nutritional products.

     During 2002, fees of $15,509 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, 2002, all Section 16(a) filing requirements applicable
to each person who, at any time during the fiscal year ended
December 31, 2002, 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, 2002, 2001 and 2000, 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, 2002 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,    2002      $  86,200        $1,051(2)
President           2001      $ 102,000            $0
                    2000      $ 110,600            $0



                            Long-Term
                            Compensation

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

Bernard Kravitz,    2002      $1,682(2)          0
President           2001      $0                 0
                    2000      $0                 0

___________________________

(1)  Does not include matching contributions paid by the Company
     for Mr. Kravitz during 2000, 2001 and 2002 of $4,124, $3,935
     and $3,436, 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 2000,
     2001 and 2002 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 2000, 2001 and 2002 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 each of 2000 and 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).

     (3)  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 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 at December 31,
2002, net of loans, in the amount of $3,500.  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 2000, 2001 and 2002.

     Compensation of Directors

     During the year ended December 31, 2002, 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, 2003.

     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, (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, 2002, 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 were granted in 2002
under the 2002 Plan.  As a result, as of December 31, 2002, 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.

     The following table sets forth certain information regarding
the beneficial ownership of the Company's Common Stock as of March
14, 2003, 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               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, 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)
     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
     99.1 Certification pursuant to U.S.C. Section 1350, as
          adopted pursuant to Section 906 of the Sarbanes-
          Oxley Act of 2002


     (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.  Controls and Procedures.

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



                 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 28, 2003



     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,    3/28/03
Bernard Kravitz          Treasurer,  Director
                         (Principal Executive
                         Officer and Principal
                         Financial Officer)

/s/ David M. Kaye        Director                 3/28/03
David M. Kaye





               CERTIFICATIONS

I, Bernard Kravitz, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Dionics,
Inc.;

2.   Based on my knowledge,  this annual report does not contain
any untrue statement of a material fact or omit to state a material
fact  necessary to make the statements  made, in light of the
circumstances  under which such statements  were made, not
misleading with respect to the period covered by this annual report;
and

3.   Based on my  knowledge,  the  financial  statements,  and
other  financial information  included  in this annual report,
fairly  present  in all material respects the financial  condition,
results of operations and cash flows of the  registrant  as of, and
for,  the  periods  presented  in this annual report;

4.   The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:

     (a)  designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;

     (b)  evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior
to the filing date of this annual report (the "Evaluation Date");
and

     (c)  presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

     (a)  all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's auditors any
material weaknesses in internal controls; and

     (b)  any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal controls; and

6.   The registrant's other certifying officers and I have
indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:     March 28, 2003      /s/ Bernard Kravitz
                              Bernard Kravitz
                              President and
                              Chief Executive Officer
                              (Principal Executive Officer)


I, Bernard Kravitz, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Dionics,
Inc.;

2.   Based on my knowledge,  this annual report does not contain
any untrue statement of a material fact or omit to state a material
fact  necessary to make the statements  made, in light of the
circumstances  under which such statements  were made, not
misleading with respect to the period covered by this annual report;
and

3.   Based on my  knowledge,  the  financial  statements,  and
other  financial information  included  in this annual report,
fairly  present  in all material respects the financial  condition,
results of operations and cash flows of the  registrant  as of, and
for,  the  periods  presented  in this annual report;

4.   The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:

     (a)  designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;

     (b)  evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior
to the filing date of this annual report (the "Evaluation Date");
and

     (c)  presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

     (a)  all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's auditors any
material weaknesses in internal controls; and

     (b)  any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal controls; and

6.   The registrant's other certifying officers and I have
indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:     March 28, 2003      /s/ Bernard Kravitz
                                  Bernard Kravitz
                                  Principal Financial Officer


<PAGE>

DIONICS, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2002 AND 2001

<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, 2002 and December 31, 2001, 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, 2002 and December 31, 2001
and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted
accounting principles.


ERNEST D. LOEWENWARTER & CO. LLP
Certified Public Accountants

Mineola, New York
February 28, 2002


<PAGE>


                            DIONICS, INC.


                            BALANCE SHEET


                                             December 31,
                                          2002        2001
                                        (Audited)   (Audited)


                         A S S E T S


CURRENT ASSETS:
 Cash                                  $   28,200 $  551,000
 Accounts Receivable Trade
  (Less Estimated Doubtful
  Accounts of $10,000 in 2002
  and 2001)- (Notes 2 and 6)               95,600    142,300
 Inventory - (Notes 2, 3 and 6)           390,200    405,400
  Prepaid Expenses and Other
    Current Assets                         27,100     33,100
  SBA Disaster Loan Receivable -
   (Notes 4 and 5)                        255,800        -0-

Total Current Assets                      796,900  1,131,800


PROPERTY, PLANT AND
  EQUIPMENT - (Notes 2 and 6)
    (At Cost Less Accumulated
      Depreciation of $1,686,900
      in 2002 and $1,681,600 in
      2001)                                67,200     70,600

DEPOSITS AND OTHER ASSETS
   - (Notes 2 and 5)                       42,800     42,200


Total                                  $  906,900 $1,244,600


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.

                            BALANCE SHEET


                                               December 31,
                                           2002           2001
                                         (Audited)     (Audited)
                      L I A B I L I T I E S

CURRENT LIABILITIES:
  Current Portion of Long-Term
   Debt - (Note 5)                     $  126,800     $   94,200
  Accounts Payable                         81,500         55,500
  Accrued Expenses                         40,200         23,900
  Deferred Compensation Payable -
   Current - (Note 4)                     421,000        354,800

Total Current Liabilities                 669,500        528,400

Long-Term Debt Less Current
 Maturities - (Note 5)                    703,300        484,200
Deferred Compensation Payable -
 Non-Current - (Note 4)                    80,000        160,000

     Total Liabilities                  1,452,800      1,172,600


COMMITMENT (Note 9)

                  SHAREHOLDERS' EQUITY (DEFICIENCY)

Common Shares - $.01 Par Value
  Authorized 5,000,000 Shares
    Issued 3,848,222 Shares in 2002
    and    3,848,222 in 2001 -
    (Notes 5 and 10)                       38,400         38,400
Additional Paid-in Capital              1,522,800      1,522,800
 (Deficit)                             (1,886,500)    (1,268,600)

                                         (325,300)       292,600
Less: Treasury Stock at Cost
  164,544 Shares in 2002 and
  164,544 Shares in 2001                 (220,600)      (220,600)

Total Shareholders'
(Deficiency) Equity                      (545,900)        72,000

Total                                  $  906,900     $1,244,600


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.

               STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY

                    FOR THE YEAR ENDED DECEMBER 31, 2002 AND
                     FOR THE YEAR ENDED DECEMBER 31, 2001


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


BALANCE -
January 1, 2001                3,848,222    $38,400    $1,522,800

NET (LOSS) - YEAR ENDED
December 31, 2001


BALANCE -
December 31, 2001              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


                              Retained      Treasury Stock
                              Earnings      Number of
                              (Deficit)     Shares        Cost

BALANCE -
January 1, 2001             $  (971,900)     164,544      $220,600

NET (LOSS) - YEAR ENDED
December 31, 2001              (296,700)


BALANCE -
December 31, 2001            (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


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,
                                     2002             2001
                                  (Audited)        (Audited)

SALES                            $  628,200        $1,734,300

COST AND EXPENSES:
  Cost of Sales (Including
   Research and Development
   Costs)                            834,700        1,559,900
  Selling, General and
   Administrative
   Expenses                          369,100          429,000

     Total Costs and Expenses      1,203,800        1,988,900


NET (LOSS) FROM OPERATIONS          (575,600)        (254,600)

DIVIDENDS AND OTHER INCOME             3,400           46,600

                                    (572,200)        (208,000)
OTHER DEDUCTIONS:
  Interest Expense                    44,800           88,700

NET (LOSS) FOR THE YEAR
 BEFORE INCOME TAXES                (617,000)        (296,700)

INCOME TAXES - (Note 8)                  900             -0-

NET (LOSS) FOR THE YEAR           $ (617,900)      $ (296,700)

NET (LOSS) PER SHARE:
 Primary                          $    (.168)      $    (.081)

 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,
                                        2002          2001
                                      (Audited)    (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss)                         $ (617,900)   $ (296,700)
  Adjustment to Reconcile
    Net (Loss) Income
    to Net Cash Provided from
    Operating Activities:
    Depreciation and Amortization         8,800         9,300
      Deferred Compensation and
        Related Interest                   -0-         53,000
  Changes in Operating
    Assets and Liabilities:
  Decrease (Increase)
    in Account Receivable                46,700       229,800
  Decrease in Inventory                  15,200       199,300
  Decrease (Increase)
    in Prepaid Expenses
    and Other Current Assets              6,000        (5,400)
  (Increase) Decrease in
    Deposits and Other
    Assets                               (4,100)         (700)
  (Increase) in SBA Loan Receivable    (255,800)          -0-
  Increase (Decrease) in
    Accounts Payable                     26,000       (27,100)
  Increase (Decrease) in
    Accrued Expenses                     16,300       (24,600)
  (Decrease) in Deferred Compensation   (13,800)     (113,800)

     Net Cash (Used In) Provided by
     Operating Activities              (772,600)       23,100

CASH FLOWS (USED IN) INVESTING ACTIVITIES:
  Purchase of Equipment                  (1,900)          -0-

CASH FLOWS PROVIDED BY (USED IN) FINANCIAL
  ACTIVITIES:
  (Repayment) of Debt                   (54,100)     (160,700)
  SBA Loan                              305,800           -0-

(DECREASE) IN CASH                     (522,800)     (137,600)

CASH - Beginning of Year                551,000       688,600

CASH - End of Year                   $   28,200    $  551,000



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, 2002 AND 2001


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:

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.

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 2002 and $45,000 in 2001.


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

<PAGE>


                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001


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

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 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 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 2002 approximately $47,000 (7.4%), $45,000 (7.2%) and $40,000
(6.5%) of the Company's revenues were from the three largest customers.
Accounts receivable from such customers approximated $18,500 at December
31, 2002.

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.

<PAGE>

                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001

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,
                                2002              2001
                             (Audited)         (Audited)
Finished Goods               $ 75,000           $ 41,500
Work-in-Process               221,100            240,400
Raw Materials                  56,900             68,300
Manufacturing Supplies         37,200             55,200

Total                        $390,200           $405,400


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 First Union Small Business
Capital (formerly Money Store Commercial Mortgage Inc. (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
Executor will take no action on the deferred compensation unless
authorized by the lender.

The previously mentioned life insurance policy had a cash surrender
value at December 31, 2002 of $100,400 and is shown net of loans in the
amount of $96,900 under other assets.

<PAGE>

                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001


December 31,
                                               2002       2001
NOTE 5 -  LOANS PAYABLE -

First Mortgage Loan:

A new loan agreement was entered into
between Dionics, Inc. and the First
Union Business Capital (formerly 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.                       $371,100   $375,300

$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.                                                127,700

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.            75,400

<PAGE>




                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001



    December 31,
                                                    2002     2001

NOTE 5 -  LOANS PAYABLE - (Continued)

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
on Term Loan A and C was forgiven and
canceled.

Effective July 11, 2001, the Company
and D.A.N. Joint Venture entered into
a supplementary agreement which resulted
in the acceptance by D.A.N. Joint Venture
of the sum of $57,500.00 in full payment
by Dionics of the previously deferred
interest of $86,0976.13 on Term Loans
A and C. Further to the supplementary
agreement, principal payment will be
paid monthly.  Current interest will
now also be paid on a monthly basis
and not accrued.  As of the date of
this new agreement, the balance due
on Term Loan A was $151,386.76 and
the balance due on Term Loan C was
$89,335.20.  Both loans, plus their
interest, will be paid in 32
consecutive monthly payments,
commencing August 1, 2001.

In September of 2002, due to its
severely negative cash flow,
Dionics became unable to make
payments of principal and interest
under Term Loans A and C. Attempts
to negotiate a payment moratorium
with D.A.N. Joint Venture were
unsuccessful, and that company
commenced an action against
Dionics, Inc. in the Supreme Court
of the State of New York.  Sub-
sequently, D.A.N. Joint Venture
and Dionics, Inc. agreed to resolve
such issues, the action was dis-
continued and on January 2, 2003
an amendatory agreement was entered
into between the parties.

It was agreed that as of December
31, 2002 the principal balance on
Term Loan A was $90,064 and on
Term Loan C was $53,146                      143,200



<PAGE>

                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001


                                                     December 31,
                                                    2002      2001

NOTE 5 -  LOANS PAYABLE - (Continued)

Term Loan A principal was to 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.                                 6,300

Term Loan C principal was to 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 2004.                                    3,700

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

SBA Disaster Loan.

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

Payment Terms

A) Interest will accrue at the rate
of 4.000% per annum; installment
payments, including principal and
interest, of $5,632 monthly, will
begin 25 months from the date of the
promissory note.  The balance of
principal and interest will be
payable 7 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, 2002 AND 2001


                                                     December 31,
                                                    2002      2001
NOTE 5 -  LOANS PAYABLE - (Continued)

SBA Disaster Loan.

C) Each payment will be made when
due even if at that time the full
amount of the Loan has not yet been
advanced or the authorized amount
of the Loan has been reduced.

D) 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 First
Union Business Capital, Plainville,
New York with a current approximate
balance of $371,100.

2. SBA Disaster Loan with a current
balance of $$305,800.

3. Mortgage subordinate the above
two mortgages in favor of the
chief executive officer (see Note 4)


Total Loan Payable                           830,100    578,400

Less: Amount due within one year             126,800     94,200

Long-Term Portion                           $703,300   $484,200


<PAGE>

                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001




NOTE 6 -  COLLATERALIZED ASSETS -

The First Union Business Capital Mortgage loan is secured by a First
Mortgage 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, 2002, 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 the options were
Anti-Dilutive for the twelve months ended December 31, 2002.



NOTE 8 -  INCOME TAXES:

As of December 31, 2002 the Company had available a federal operating
loss carry forward of $1,091,200.  This net operating loss originated
in 1992, 2001 and 2002 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

             $1,091,200


<PAGE>



                            DIONICS, INC.

                    NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2002 AND 2001





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,
2002, no other shares have been granted under the 2002 Plan.