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, 2001

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

       Commission file number 0-8161

                 DIONICS,  INC.
(Name of Small Business Issuer in Its Charter)

Delaware                                     11-2166744
(State or other jurisdiction           (I.R.S. Employer
of incorporation or                      Identification
organization)                                   Number)

65 Rushmore Street
Westbury, New York                                11590
(Address of principal                        (Zip Code)
executive offices)

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

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

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

Check whether the Issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

            Yes   X     No

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

State Issuer's revenues for its most recent fiscal year:
$1,734,300.

As of March 15, 2002, the aggregate market value of the Common
Stock held by non-affiliates of the Issuer (2,907,940 shares)
was approximately $204,000.  The number of shares outstanding
of the Common Stock ($.01 par value) of the Issuer as of the
close of business on March 15, 2002 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 "Registrant" or the "Company") was
incorporated under the laws of the State of Delaware on
December 19, 1968 as a general business corporation.

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

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

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

     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

<PAGE>

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 2001.


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

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

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

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

     (vi) Customers to whom, for the fiscal year ended
December 31, 2001, sales were made equal to approximately 10%
or more of the Company's sales:

                            Approximate
                            Percentage
        Name                of Business

     Customer "A"             34.0%
     Customer "B"             10.0%
     Customer "C"              8.0%

     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, 2000
approximately $933,000 and at December 31, 2001 approximately
$217,200.

<PAGE>

     (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:

                         1999 -  $50,000
                         2000 -  $55,000
                         2001 -  $55,000

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

     Other Information - Loans Payable

     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

<PAGE>

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.

     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 mortgage loan in the principal
amount of $384,685 (the "Money Store Mortgage Loan").  Of such
amount, $358,232 was used to satisfy in full the balance due on
a previously obtained mortgage loan which at the time was held
by D.A.N. Joint Venture.  The Money Store Mortgage Loan is
secured by a first mortgage on the Company's Westbury Property.

     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.

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

     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

<PAGE>

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.

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


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

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


                  PART II

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

     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, 2000:

Jan. 1, 2000 to March 31, 2000     $1.75          $0.4375
April l, 2000 to June 30, 2000     $0.7813        $0.125
July 1, 2000 to Sept. 30, 2000     $0.51          $0.25
Oct. 1, 2000 to Dec. 31, 2000      $0.32          $0.13

<PAGE>


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

     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 15, 2002 there were approximately 375 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

     Looking back, 2001 had started out reasonably well for
Dionics, Inc., but the incoming-order rate soon started to show
a decline, pulled down by the sagging national economy.
Although the Company managed to maintain its shipping rate
through mid-year, it was doing so at the expense of a shrinking
backlog. Then, adding to the already poor business background,
the terrorist attacks of September 11th caused a major further
dampening in the aircraft industry, the prime market for our
Solid State Relays in recent years. The Second Half of the year
thus saw shipping rates fall severely in response to the
worsening national economic slowdown. Much of the recent growth
momentum the Company had generated simply disappeared, but one
of the few bright spots remaining was to be found in the
Company's cash reserves. It is estimated by management that
those reserves, in excess of $500,000 at year-end, are
sufficient to see the Company through to a turnaround that is
anticipated for the not too distant future. Nonetheless, the
performance in the Second Half of 2001 wiped out all the
profits of the First Half, and then some. Besides the losses
stemming from its reduced scale of operations, the Company was
also forced to deal harshly and conservatively with the issue
of year-end Inventory valuation. The contraction in the order
backlog at year-end prompted Accounting to view a great deal of
our Inventory as "excess" to our near-term visible needs. As a
result, Inventory devaluation also added much to our losses for
the year 2001. On a related note, the Company also undertook to
generate an Independently-Audited financial report for this
filing, the first in many years. Not only does this bring the
Company into full SEC compliance, it also permits applying for
re-listing of the Company's securities on the OTC Bulletin
Board. It is believed this will provide a larger audience of
interested investors for the Company's stock, although there is
no assurance of acceptance by the Bulletin Board.

<PAGE>

     In response to the negative outlook at mid-year, the
Company began to take all the cost-saving steps management felt
were prudent. Further, in an effort to increase sales, the
Company concentrated its available engineering and
manufacturing capabilities on new product-developments. As of
this writing, those efforts are considered to have been
successful, with a number of new programs expected to
contribute to growing sales in the Second and Third Quarters of
2002. Several of them are already resulting in early-stage
start-up orders, expected to grow into higher volume
requirements later in the year. The two major fronts for these
products are military fighter aircraft, such as the F-16 and
the new F-22, plus medical applications in Implantable Cardiac
Defibrillators. Yet another new product development, critical
to aircraft lighting systems,  has market indications that
dwarf all our other efforts. These are all likely to be long
term, high growth markets, and are expected to be joined by a
resumption, later in the year, for our AIRBUS-dedicated Solid
State Relays. Given these programs and the Company's cash
reserves, management has confidence the Company will
successfully reach its turnaround goals.

     The Company's Cash Account at year-end 2001 was $551,000
as compared to $688,600 at year-end 2000 and $526,500 at year-
end 1999. The ratio of Total Current Assets to Total Current
Liabilities was 2.14:1 at year-end 2001 as compared to 4.44:1
at year-end 2000 and 3.21:1 at year-end 1999. Working Capital
also dropped, falling to $603,400 at year-end 2001 as compared
to $1,311,700 at year-end 2000 and $1,075,900 at year-end 1999.
The downward shift in operating performance for 2001 obviously
reduced the Company's LIQUIDITY position, evidenced by the
above indicators. Net Worth also was reduced at year-end 2001,
falling to $72,000 from $368,700 at year-end 2000 and $109,400
at year-end 1999. However, using the recently appraised value
of the Company's real estate property at a level $750,000
higher than its heavily depreciated book-value, the year-end
2001 Net Worth may be argued to be at a "true" value of
$822,000.

     Management has been continuing its search for sources of
additional financing, but the current business climate makes
that more difficult. For the immediate future, at least, the
Company is well able to support its current operations, while
making all prudent efforts to reduce costs. The year of 2002
will be a management challenge, but confidence of success is
high.

B.   RESULTS OF OPERATIONS

     Operating results in 2001 showed Sales volume of
$1,734,300, down 29% from the $2,433,700 level of 2000 and also
down from the $1,970,400 level of 1999. The drop in Sales
volume was caused directly by the general economic slowdown,
aggravated by the terrorism effects on the aircraft industry.
The year 2001 produced a Net Loss of $296,700, as compared to a
Net Profit of $259,300 in the year 2000, and a Net Profit of
$217,900 in 1999. The Net Loss stems primarily from the reduced
Sales volume, against a background of many costs that are
largely fixed in nature. A very conservative approach to year-
end Inventory evaluation also added to the Net Loss.

     Research and Development expenditures remained at the
$55,000 level seen in 2000, showing internal efforts redirected
from engineering and manufacturing to new product development.
Interest Expense in 2001 dropped to $88,700 from $101,400 in
2000, showing the effects both of lower rates and a smaller
amount of debt. Concerning that debt, the Company has continued
to reduce the amounts owed through monthly payments, and also
achieved a one-time benefit in July, 2001, against a deferred
interest balance (see Note 5).

     The disappointing results of 2001 ended a string of 5
consecutive years of increasing Sales and Profits. However,
utilizing the slowdown to good advantage, the Company developed
a number of new products that will join a renewal of Sales
expected on our older products. While there can be no
guarantee,

<PAGE>

management anticipates a return to growth and
profitability by the Fourth Quarter of 2002. Our frequent
comment at this part of the MD&A section is that risks of
failure still persist, and it has not been any truer in many
years. Nevertheless, management has dealt successfully with
similar circumstances in the past, and done so without the
benefit of cash reserves. We expect to succeed again.

     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          68   President, Secretary,  1969
                              Treasurer

David M. Kaye            47   None(1)                2000



     (1)  A partner of Danzig Kaye Cooper & Fiore, 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.

<PAGE>

     Identity of Executive Officers

                                                  Officer
Name                Age  Position                 Since

Bernard Kravitz     68   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, 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 2001, fees of $16,299 were paid to Danzig Kaye
Cooper & Fiore, LLP for legal services rendered.

     Involvement in Certain Legal Proceedings

     None.

     Promoters and Control Persons

     N/A

<PAGE>

     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, 2001, all Section 16(a) filing requirements
applicable to each person who, at any time during the fiscal
year ended December 31, 2001, 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, 2001, 2000 and 1999, 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, 2001 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,    2001      $102,000       $0
President           2000      $110,600       $0
                    1999      $104,300       $0
___________________________


                     Long-Term
                     Compensation

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

Bernard Kravitz,    2001      $0             0
President           2000      $0             0
                    1999      $0             0
___________________________

     (1)  Does not include matching contributions paid by the
     Company for Mr. Kravitz during 19999, 2000 and 2001 of
     $4,018, $4,124 and $3,935, 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 1999, 2000 and 2001 on a life
     insurance policy it owns and maintains on the life of
     Mr. Kravitz.  Also, does not include $113,764 paid to
     Mr. Kravitz during 2001 which amount represents payment
     for installments which were due to Mr. Kravitz for 2000
     as well as for certain portions of  2001 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).

<PAGE>

     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.  The previously mentioned life insurance policy
had a cash surrender value at December 31, 2001 of
approximately $3,600, which is included in other assets.  In
connection with the refinancing  of the Company's mortgage
loan, the Company executed a mortgage subordinate to the new
first mortgage secured by the Company's Westbury Property in
favor of Mr. Kravitz to insure amounts due him under the
deferred compensation agreement.

     Compensation pursuant to plans

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

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

<PAGE>

          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 1999, 2000 and 2001.

     Compensation of Directors

     During the year ended December 31, 2001, 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,
2002.

     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, 2001, options to acquire 120,000
shares of Common Stock have been granted under the 1997 Plan.
No options were granted during 2001.  All of such options were
granted on September 11, 1997 and have an exercise price of
$.38 per share.  As of December 31, 2001, 130,000 options were
available for future grant.  The 1997 Plan was subject to
obtaining stockholder approval within twelve months of the
adoption of the 1997 Plan which approval was obtained in
September 1998.  None of the options granted under the 1997
Plan were granted to the executive officer named in the Summary
Compensation Table (Mr. Kravitz).

     Termination of Employment and Change of Control
Arrangements

     None.


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

     The following table sets forth certain information
regarding the beneficial ownership of the Company's Common
Stock as of March 15 2002, 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:

<PAGE>
                                                 Percent(1)
Name and Address             Shares Owned        of Class


Bernard Kravitz               775,738(2)          21.1%
65 Rushmore Street
Westbury, NY

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

Keith Kravitz                 252,918              6.9%
110-11 Queens Blvd.
Forest Hills, NY

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

All Directors & Officers      775,738             21.1%
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 758,223 shares of record and 17515 shares owned
     by Mrs. Phyllis Kravitz, Mr. Bernard Kravitz' wife. Does
     not include 252,918 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

<PAGE>

     (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.

<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 26, 2002



     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,    3/26/02
Bernard Kravitz        Treasurer,  Director
                       (Principal Executive
                       Officer and Principal
                       Financial Officer)

/s/ David M. Kaye      Director                 3/26/02
David M. Kaye



<PAGE>


ERNEST D. LOEWENWARTER & CO. LLP
CERTIFIED PUBLIC ACCOUNTANTS
10 EAST 40TH STREET
NEW YORK, N.Y. 10016-0200



Independent Auditor's Report


Directors and Shareholders
Dionics, Inc.
Westbury, New York

We have audited the accompanying balance sheet of Dionics, Inc.
as of December 31, 2001, and the related statements of changes
in shareholders' equity, 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 audit 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 audit 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, 2001 and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.

The 2000 financial statements were reviewed by us and our
report thereon, dated February 22, 2001 stated that  we were
not aware of any material modifications that should be made to
those statements for them to be in conformity with generally
accepted accounting principles.  However, a review is
substantially less in scope than an audit and does not provide
a basis for the expression of an opinion on the financial
statements taken as a whole.



                     ERNEST D. LOEWENWARTER & CO. LLP
                     Certified Public Accountants

New York, New York
February 22, 2002


<PAGE>




<TABLE>
<CAPTION>

                            DIONICS, INC.


                            BALANCE SHEET


                                                 December 31,
                                             2001           2000

                                           (Audited)     (Unaudited)


                         A S S E T S

<S>                                         <C>         <C>

CURRENT ASSETS:
  Cash                                      $  551,000  $  688,600
  Accounts Receivable Trade
    (Less Estimated Doubtful
    Accounts of $10,000 in 2001
    and 2000)- (Notes 2 and 6)                 142,300     372,100
  Inventory - (Notes 2, 3 and 6)               405,400     604,700
  Prepaid Expenses and Other
    Current Assets                              33,100      27,700


        Total Current Assets                 1,131,800   1,693,100



PROPERTY, PLANT AND
  EQUIPMENT - (Notes 2 and 6)
    (At Cost Less Accumulated
      Depreciation of $1,681,600
      in 2001 and $1,675,700 in
      2000)                                     70,600      76,300

DEPOSITS AND OTHER ASSETS -
(Notes 2 and 5)                                 42,200      44,800

       Total                                 $1,244,600 $1,814,200

</TABLE>


All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>

<TABLE>
<CAPTION>

                            DIONICS, INC.

                            BALANCE SHEET


                                               December 31,
                                             2001           2000
                                          (Audited)    (Unaudited)
                      L I A B I L I T I E S

<S>                                     <C>            <C>

CURRENT LIABILITIES:
  Current Portion of Long-Term
   Debt - (Note 5)                      $   94,200     $   93,900

Accounts Payable                            55,500         82,600
  Accrued Expenses                          23,900         48,500
  Deferred Compensation Payable -
    Current - (Note 4)                     354,800        156,400


  Total Current Liabilities                528,400        381,400

Long-Term Debt Less Current
   Maturities - (Note 5)                   484,200        644,900
Deferred Compensation Payable -
  Non-Current - (Note 4)                   160,000        419,200

     Total Liabilities                   1,172,600      1,445,500


COMMITMENT (Note 9)

                         SHAREHOLDERS' EQUITY

Common Shares - $.01 Par Value
  Authorized 5,000,000 Shares
    Issued 3,848,222 Shares in 2001
    and 2000 - (Note 7)                     38,400         38,400
Additional Paid-in Capital               1,522,800      1,522,800
   (Deficit)                            (1,268,600       (971,900)

                                           292,600        589,300
Less: Treasury Stock at Cost
  164,544 Shares in 2001 and
  164,544 in 2000                         (220,600)      (220,600)

   Total Shareholders' Equity               72,000        368,700

    Total                               $1,244,600     $1,814,200


</TABLE>


All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.

<PAGE>


<TABLE>
<CAPTION>


                    DIONICS, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2001 (AUDITED) AND
FOR THE YEAR ENDED DECEMBER 31, 2000 (UNAUDITED)


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

<S>                     <C>          <C>         <C>

BALANCE -
 January 1, 2000        3,848,222    $38,400     $1,522,800

NET INCOME - YEAR ENDED
 December 31, 2000


BALANCE -
 December 31, 2000      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

</TABLE>



<TABLE>
<CAPTION>




                            Retained         Treasury Stock
                            Earnings      Number of
                            (Deficit)     Shares        Cost

<S>                        <C>             <C>        <C>


BALANCE -
 January 1, 2000           $(1,231,200)    164,544    $220,600

NET INCOME - YEAR ENDED
 December 31, 2000             259,300


BALANCE -
 December 31, 2000            (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

</TABLE>


All amounts have been rounded to the nearest $100


See Independent Auditors Report.

The accompanying notes are an integral part of this statement.


<PAGE>

<TABLE>
<CAPTION>


                            DIONICS, INC.

                       STATEMENT OF OPERATIONS


                                                      DECEMBER 31,
                                               2001               2000

                                            (Audited)          (Unaudited)


<S>                                          <C>               <C>

SALES                                        $1,734,300        $2,433,700

COST AND EXPENSES:
  Cost of Sales (Including Research
    and Development Costs)                    1,559,900         1,641,000
  Selling, General and Administrative
    Expenses                                    429,000           459,900

     Total Costs and Expenses                 1,988,900         2,100,900


NET (LOSS) INCOME FROM OPERATIONS              (254,600)          332,800

DIVIDENDS AND OTHER INCOME                       46,600            29,800


                                               (208,000)          362,600
OTHER DEDUCTIONS:
  Interest Expense                               88,700           101,400

NET (LOSS) INCOME FOR THE YEAR
  BEFORE INCOME TAXES                          (296,700)          261,200

INCOME TAXES - (Note 8)                             -0-             1,900

NET (LOSS) INCOME FOR THE YEAR                $(296,700)       $  259,300



NET (LOSS) INCOME PER SHARE:
  Primary                                    $    (.081)       $    .0704

  Diluted - (Note 7)                         $                 $    .0680


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

  Diluted (Note 7)                                 -0-          3,811,291


</TABLE>


All amounts have been rounded to the nearest $100.

See Independent Auditors Report.

The accompanying notes are an integral part of this statement.


<PAGE>

<TABLE>
<CAPTION>


                            DIONICS, INC.

                       STATEMENT OF CASH FLOWS




                                                             DECEMBER 31,
                                                          2001         2000

                                                    (Audited)      (Unaudited)

<S>                                                   <C>          <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss) Income                                   $ (296,700)  $  259,300

  Adjustment to Reconcile Net (Loss) Income
    to Net Cash Provided from
    Operating Activities:
      Depreciation and Amortization                        9,300       22,000
      Deferred Compensation and
        Related Interest                                  53,000       69,300
  Changes in Operating Assets and Liabilities:
     Decrease (Increase) in Account Receivable           229,800      (15,100)
     Decrease in Inventory                               199,300       43,400
     Decrease (Increase) in Prepaid Expenses
      and Other Current Assets                            (5,400)       3,000
    (Increase) Decrease in Deposits and Other
      Assets                                                (700)       4,500
    (Decrease) in Accounts Payable                       (27,100)     (18,400)
    (Decrease) in Accrued Expenses                       (24,600)     (17,100)
    (Decrease) in Deferred Compensation                 (113,800)    (113,800)


      Net Cash Provided by Operating Activities           23,100      237,100


CASH FLOWS (USED IN) INVESTING ACTIVITIES:
   Purchase of Equipment                                    -0-       (16,300)


CASH FLOWS (USED IN) FINANCIAL ACTIVITIES:
   (Repayment) of Debt                                  (160,700)     (58,700)


(DECREASE) INCREASE IN CASH                             (137,600)     162,100


CASH - Beginning of Year                                 688,600       526,500


CASH - End of Year                                    $  551,000      $688,600

</TABLE>


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, 2001 AND 2000



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 $45,000 in 2001 and $55,000
in 2000.


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, 2001 AND 2000


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

  a) New Costs        $35,800 360 Months Starting 1/l/2000
  b) Unamortized
      Prior Cost       16,200  94 Months

                      $52,000


Major Customers:

In 2001 approximately $591,000 (34%), $170,000 (10%) and
$137,000 (8%) of the Company's revenues were from three
customers.  Accounts receivable from such customers
approximated $61,000 at December 31, 2001.

In 2000 approximately $476,000 (20%) and $184,000 (8%) of the
Company's revenues were from two of the above customers.


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, 2001 AND 2000



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,
                                2001            2000
                             (Audited)       (Unaudited)

Finished Goods                $ 41,500       $ 36,000
Work-in-Process                240,400        381,300
Raw Materials                   68,300        143,200
Manufacturing Supplies          55,200         44,200

     Total                    $405,400       $604,700


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.

The previously mentioned life insurance policy had a cash
surrender value at December 31, 2001 of $81,500 and is shown
net of loans in the amount of $78,700 under other assets.

<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000


                                              December 31,
                                            2001       2000


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.                      $375,300   $378,600

$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    226,500

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    133,700


<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000


                                             December 31,

                                             2001     2000

NOTE 5 -  LOANS PAYABLE - (Continued)

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

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. 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.                             578,400    738,800

Less: Amount due within one year             94,200     93,900

   Long-Term Portion                       $484,200   $644,900




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.

<PAGE>


DIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000



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, 2001, options to acquire 120,000
shares of Common Stock have been granted under the 1997 Plan.
All of such options were granted on September 11, 1997 and have
an exercise price of $.38 per share.  As of December 31, 2001,
130,000 options were available for future grant.  Since the
market price of the Company's Common Stock was below the
exercise price of options, the options were Anti-Dilutive for
the current period.



NOTE 8 -  INCOME TAXES:

As of December 31, 2001 the Company had available a federal
operating loss carry forward of $488,200.  This net operating
loss originated in 1992 and 2001 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

                        $488,200



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.