SECURITIES AND EXCHANGE COMMISSION
                     Washington, DC  20549

                          FORM 10-KSB/A
                        (Amendment No. 1)

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

           For the fiscal year ended DECEMBER 31, 2003

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

                Commission file number 000-08161

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

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

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

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

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

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

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

               Yes  [   X   ]        No   [      ]

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

State Issuer's revenues for its    most   recent   fiscal   year:
                              $861,200

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

           Documents Incorporated by Reference:  None

<PAGE>

                       EXPLANATORY NOTE

      Dionics,  Inc. is filing this Amendment No. 1 on  Form  10-
KSB/A  (the "Amendment") to its Annual Report on Form 10-KSB  for
the  fiscal year ended December 31, 2003 (the "Original  Report")
to  amend  the  financial statements included with  the  Original
Report  and  include a report of an independent public accounting
firm  registered  with  the Public Company  Accounting  Oversight
Board.

     The Amendment only reflects the changes discussed above, and
does  not amend, update, or change any other items or disclosures
contained in the Original Report.

<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:    April 4, 2005


     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,    04/04/05
Bernard Kravitz               Treasurer,  Director
                              (Principal Executive
                              Officer and Principal
                              Financial Officer)


/s/ David M. Kaye             Director                 04/04/05
David M. Kaye


____________________          Director                    --
Kenneth Levy


<PAGE>


                                  DIONICS, INC.
                              FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

<PAGE>

                                  DIONICS, INC.
                          INDEX TO FINANCIAL STATEMENTS


Contents                                                                  Page

Independent Auditors' Report                                              1

Balance Sheet at December 31, 2003                                        2

Statements of Operations for the years
ended December 31, 2003 and 2002                                          4

Statements of Shareholders' Equity for the years
ended December 31, 2003 and 2002                                          5

Statements of Cash Flows for the years
ended December 31, 2003 and 2002                                          6

Notes to Financial Statements                                             8
<PAGE>

BLOOM & CO., LLP
50 CLINTON STREET                                   TEL 516 - 486-5900
HEMPSTEAD. NEW YORK 11550                           FAX : 516 - 486-5476
CERTIFIED PUBLIC ACCOUNTANTS

STEVEN BLOOM, CPA                                   MEMBER OF
FREDERICK PAUKER, CPA                               AMERICAN INSTITUTE OF
SIROUSSE TABRIZTCHI, Ph.D. CPA                      CERTIFIED PUBLIC ACCOUNTANTS


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
and Shareholders of
Dionics, Inc.

We have audited the accompanying balance sheet of Dionics, Inc. as of December
31, 2003, and the related statements of operations, stockholders' equity, 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 did not audit the
financial statements, as of December 31, 2002. Those statements were audited by
other auditors whose report has been furnished to us and our opinion, insofar as
it relates to the amounts included, is based solely on the report of the other
auditors.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, 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, 2003, and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.



BLOOM & CO., LLP
Hempstead, New York
March 28, 2005

                                       1
<PAGE>

                                  DIONICS, INC.
                                  BALANCE SHEET
                                DECEMBER 31, 2003

                                     ASSETS

                                                                          2003
                                                                          ----

Current assets:

Cash                                                                  $   13,300
Trade accounts receivable, net                                            54,400
Inventories                                                              368,500
Prepaid expenses                                                          24,300
                                                                      ----------

Total current assets                                                     460,500

Property and equipment, net                                               70,800

Other assets:

Deposits                                                                  39,700
                                                                      ----------

Total Assets                                                          $  571,000
                                                                      ==========


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

                                       2
<PAGE>

                                  DIONICS, INC.
                                  BALANCE SHEET
                                DECEMBER 31, 2003
                                   (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                   LIABILITIES

                                                                        2003
                                                                        ----
Current liabilities:

Accounts payable                                                   $    137,200
Accrued expenses                                                         36,300
Current maturities of long term debt                                     46,300
                                                                   ------------

Total current liabilities                                               219,800

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

Total Liabilities                                                     1,391,700

Stockholders' equity:

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

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

Total liabilities and
stockholders' (deficit)                                            $    571,000
                                                                   ============

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

                                       3
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                       2003             2002
                                                       ----             ----

Sales                                                  $861,200        $628,200
Cost of sales                                           749,300         834,700
                                                   ------------    ------------

Gross Profit                                            111,900        (206,500)

Other costs:
Selling, general and
 Administration                                         346,500         369,100
                                                   ------------    ------------

Total other costs                                       346,500         369,100
                                                   ------------    ------------

(Loss) from operations                                 (234,600)       (575,600)

Other income and (expense):

Interest income                                           1,700           3,400
Interest expense                                        (41,000)        (44,800)
                                                   ------------    ------------

Net (loss) for the year before income taxes            (273,900)       (617,000)
Income tax expense                                          900             900
                                                   ------------    ------------

Net (loss)                                             (274,800)      $(617,900)
                                                   ============    ============

Basic (Loss) per common share                            $(.075)         $(.168)
                                                   ============    ============

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

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

                                       4
<PAGE>

                                  DIONICS, INC.
                        STATEMENT OF SHAREHOLDERS EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                              Common Stock           Additional                       Treasury Stock
                         Number of                      Paid                      Number of
                           Shares        Value       in Capital     Deficit         Shares        Cost           Total
                        -----------   -----------   -----------   -----------    -----------   -----------    -----------
<S>                       <C>             <C>        <C>          <C>                <C>         <C>            <C>
Balance as of
January 1, 2002           3,848,222       $38,400    $1,522,800   $(1,268,600)       164,544     $(220,600)       $72,000

Loss for Period                  --            --            --      (617,900)            --            --       (617,900)
                        -----------   -----------   -----------   -----------    -----------   -----------    -----------
Balance as of
December 31, 2002         3,848,222       $38,400    $1,522,800   $(1,886,500)       164,544     $(220,600)     $(545,900)

Loss for period                  --            --            --      (274,800)            --            --       (274,800)
                        -----------   -----------   -----------   -----------    -----------   -----------    -----------
December 31, 2003         3,848,222       $38,400    $1,522,800   $(2,161,300)       164,544     $(220,600)     $(820,700)
                        ===========   ===========   ===========   ===========    ===========   ===========    ===========
</TABLE>

The accompanying notes are an integral part
of the financial statements

                                       5
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                           2003          2002
                                                           ----          ----

Cash flows from operating activities:

Net income(loss)                                       $ (274,800)   $ (617,900)
Adjustments to reconcile
net income to net cash provided
by operating activities:

Depreciation and amortization                               6,700         8,800

Change in assets and liabilities:
Accounts receivables                                       41,200        46,700
Prepaid expenses                                            2,800         6,000
Inventories and parts                                      21,700        15,200
Deposits and other assets                                   3,100        (4,100)
Accounts payable                                           55,700        26,000
Accrued expenses                                           (3,900)       16,300
Deferred Compensation                                          --       (13,800)
                                                       ----------    ----------

Net cash provided (used) by operations                 $ (147,500)   $ (516,800)


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

                                       6
<PAGE>

                                  DIONICS, INC.
                             STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                   (Continued)

                                                            2003         2002
                                                            ----         ----
Net cash provided (used) by
operating activities                                     $(147,500)   $(516,800)

Cash flows from investing activities:

(Increase) in fixed assets                                 (10,300)      (1,900)
                                                         ---------    ---------

Net cash (used in) investing  activities                   (10,300)      (1,900)

Cash flows from financing activities;

Small Business Administration Loan                         255,800       50,000
Principal payment of long-term debt                       (112,900)     (54,100)
                                                         ---------    ---------

Net cash (used in) financing activities                    142,900       (4,100)
                                                         ---------    ---------

Net increase(decrease) in cash                             (14,900)    (522,800)
Cash at beginning of year                                   28,200      551,000
                                                         ---------    ---------

Cash at end of year                                      $  13,300    $  28,200
                                                         =========    =========

Cash paid during the twelve months ended December 31:

                                                              2003         2002
                                                              ----         ----

Interest                                                    42,000       43,700

Income Taxes                                                   900          900

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

                                       7

<PAGE>


                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of Financial Statements

The  preparation  of  financial  statements  in  conformity  with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period. Actual results could differ from those estimates.

Cash and cash equivalents.

Holdings  of highly liquid investments with maturities  of  three
months  or  less,  when  purchased, are  considered  to  be  cash
equivalents.  The carrying amount reported in the  balance  sheet
for  cash and cash equivalents approximates its fair values.  The
amount  of  federally insured cash deposits  was  $12,779  as  of
December 31, 2003.

Fair Values of Financial Instruments.

The  carrying  amount  of  trade  accounts  receivable,  accounts
payable,  prepaid and accrued expenses, bonds and notes  payable,
and  amounts  due to shareholders, as presented  in  the  balance
sheet, approximates fair value.

Accounts Receivable

Accounts  for  which  no payments have been  received  for  three
consecutive  months are considered delinquent and  a  reserve  is
setup for them. Customary collection efforts are initiated and an
allowance  for uncollectible accounts is set up and  the  related
expense is charged to operations.

Inventories

Inventories  are  stated at the lower of cost  (which  represents
cost  of materials and manufacturing costs on a first-in,  first-
out  basis)  or  market. Cost is determined  principally  on  the
average  actual  cost method. Finished goods and  work-in-process
inventories include material, labor, and overhead costs.  Factory
overhead  costs are allocated to inventory manufactured  in-house
based  upon cost of materials. Dionics monitors usage reports  to
determine  if the carrying value of any items should be  adjusted
due  to  lack  of demand for the item. Dionics adjusts  down  the
inventory  for  estimated obsolescence or unmarketable  inventory
equal  to  difference  between the  cost  of  inventory  and  the
estimated market value based upon assumptions about future demand
and  market  conditions.  If actual market  conditions  are  less
favorable   than   those  projected  by  management,   additional
inventory write-down may be required.

Inventory at December 31, 2003 was as follows:


                                                  2003

Raw materials (net of reserves)                 $42,700
Work in process                                 216,000
Manufacturing Supplies                           33,100
Finished goods                                   76,700

Total                                         $ 368,500

<PAGE>

                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Notes Payable

The  Company accounts for all note liabilities that are  due  and
payable in one year as short-term notes.

Long-Lived Assets- Property, Plant And Equipment

These   assets  are  recorded  at  cost  less  depreciation   and
amortization. Depreciation and amortization are accounted for  on
the  straight-line  method based on estimated useful  lives.  The
amortization of leasehold improvements is based on the shorter of
the  lease  term or the life of the improvement. Betterments  and
large  renewals,  which  extend  the  life  of  the  asset,   are
capitalized  whereas maintenance and repairs and  small  renewals
are  expenses,  as  incurred.  The estimated  useful  lives  are:
machinery  and  equipment, 7-15 years; buildings, 30  years;  and
leasehold improvements, 10-20 years.

Deferred Compensation Plan

Future  payments  required under a plan of deferred  compensation
adopted in 1987, and revised in 2000, as well as interest accrued
thereon  have  been  charged to operations  over  the  period  of
expected service.

Bad Debt

The  Company  maintained an allowance for  doubtful  accounts  of
$7,300.

Deferred Mortgage Costs

Costs  related  to the new First Union Business Capital  Mortgage
and  prior  costs  related to the paid off mortgage  with  D.A.N.
Joint Venture are being amortized over ten years as follows:

  Cost                       $52,000
  Accumulated Amortization   (16,363)

                             $35,637

Amortization for 2003 and 2002 was $3,268 for both years.

Major Customers

In  2003 approximately $158,000 (18%), $128,000 (15%) and  52,000
(6%)  of  the  Company's  revenues were from  the  three  largest
customers.   Accounts receivable from such customers approximated
$23,000 at December 31, 2003.

<PAGE>
                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

Net Loss Per Common share

Basic  earnings  per  share ("EPS") are  computed  based  on  the
weighted  average  number of common shares  outstanding  for  the
period. Diluted EPS gives effect to all dilutive potential shares
outstanding  (i.e., options and warrants) during the period.  The
assumed  exercise of outstanding stock options have been excluded
from  the  calculations  of loss per share  as  their  effect  is
antidilutive, in 2003 and 2002.

In  2003  and  2002,  basic loss per share of Dionics,  Inc.  was
$(.08)  and $(.17) per share, respectively. The diluted  weighted
average common shares outstanding at December 31, 2003 and  2002,
was  3,683,678  and  diluted earnings per share  was  $(.08)  and
$(.17), respectively.

Income Taxes

Income  taxes  are  accounted for under the asset  and  liability
method.  Deferred tax assets and liabilities are  recognized  for
the  future tax consequences attributable to differences  between
the  financial statement carrying amounts of existing assets  and
liabilities and their respective tax bases and operating loss and
tax  credit  carry forwards. Deferred tax assets and  liabilities
are measured using enacted tax rates expected to apply to taxable
income  in  the  years in which those temporary  differences  are
expected  to be recovered or settled. The effect on deferred  tax
assets and liabilities of a change in tax rates is recognized  in
income in the period that includes the enactment date.


Recently Issued Accounting Standards

In  July 2002, the FASB issued Statement No. 146, Accounting  for
Costs Associated with Exit or Disposal Activities. Statement  No.
146   addresses  the  timing  of  recognition  and  the   related
measurement of the costs of one-time termination benefits.  Under
SFAS 146, liabilities for costs associated with a plan to dispose
of  an asset or to exit a business activity must be recognized in
the period in which the costs are incurred.  Statement No. 146 is
effective for exit activities initiated after December 31,  2002,
with   early  application  allowed.  Dionics  adopted  SFAS   146
effective January 1, 2002. The adoption of SFAS 146 did not  have
a   material  effect  on  the  financial  position,  results   of
operations or cash flows of Dionics.

In  November 2002, the FASB issued FASB Interpretation (FIN)  No.
45,  Guarantor  s  Accounting  and  Disclosure  Requirements  for
Guarantees,  including  Indirect Guarantees  of  Indebtedness  of
Others. This interpretation addresses the disclosures to be  made
by  a  guarantor  in its interim and annual financial  statements
about its obligations under certain guarantees. It also clarifies
(for guarantees issued after January 1, 2003) that a guarantor is
required  to  recognize,  at  the inception  of  a  guarantee,  a
liability  for  the fair value of the obligations  undertaken  in
issuing the guarantee. At December 31, 2002, Dionics did not have
any significant guarantees.

Dionics  adopted the disclosure requirements of FIN  45  for  the
year  ended  December  31, 2002, and the  recognition  provisions
effective January 1, 2003.

In  November 2002, the EITF finalized its consensus on EITF Issue
00-21,  "Revenue Arrangements with Multiple Deliverables",  which
provides guidance on the method of revenue recognition for  sales
arrangements that include the delivery of more than  one  product
or   service.   EITF   00-21  is  effective   prospectively   for
arrangements entered into in fiscal periods beginning after  June
15,  2003.  Under  EITF 00-21, revenue must be allocated  to  all
deliverables  regardless  of whether  an  individual  element  is
incidental  or  perfunctory. The adoption of EITF 00-21  did  not
have a material impact on the Company's results of operations  or
financial position.

<PAGE>

                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Standards (Continued)

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN
46"),  "Consolidation  of  Variable Interest  Entities."  FIN  46
clarifies the application of Accounting Research Bulletin No. 51,
"Consolidated Financial Statements," to certain entities in which
equity investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at  risk  for
the   entity   to  finance  its  activities  without   additional
subordinated financial support from other parties. FIN 46 applies
immediately to variable interest entities ("VIE's") created after
January 31, 2003, and to VIE's in which an enterprise obtains  an
interest after that date. On October 9, 2003 the FASB issued FASB
Staff   Position   No.   FIN  46-6  "Effective   Date   of   FASB
Interpretation   No.46   Consolidation   of   Variable   Interest
Entities,"  which  defers  the  implementation  date  for  public
entities  that hold an interest in a variable interest entity  or
potential variable interest entity from the first fiscal year  or
interim  period beginning after June 15, 2003 to the end  of  the
first  interim or annual period ending after December  15,  2003.
This deferral applies only if 1) the variable interest entity was
created before February 1, 2003 and 2) the public entity has  not
issued  financial  statements reporting  that  variable  interest
entity in accordance with FIN 46, other than disclosures required
by paragraph 26 of FIN 46. The adoption of FIN 46 did not have  a
material impact on the Company's financial position, liquidity or
results of operations.

In  May  2003,  the  FASB  issued SFAS  No.  149,  "Amendment  of
Statement  133 on Derivative Instruments and Hedging Activities."
This  Statement  amends  and clarifies financial  accounting  and
reporting   for   derivative   instruments,   including   certain
derivative  instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under FASB
Statement  No.  133, "Accounting for Derivative  Instruments  and
Hedging  Activities."  SFAS No. 149 is  effective  for  contracts
entered  into  or modified after June 30, 2003, and  for  hedging
relationships  designated after June 30, 2003.  The  adoption  of
SFAS  No.  149 did not materially impact the Company's  financial
position or results of operations.

In  May  2003,  the  FASB issued SFAS No.  150,  "Accounting  for
Certain  Financial  Instruments  with  Characteristics  of   both
Liabilities  and Equity." The statement requires that  an  issuer
classify  financial instruments that are within its  scope  as  a
liability.  Many of those instruments were classified  as  equity
under  previous  guidance.  SFAS No. 150  is  effective  for  all
financial  instruments  entered into or modified  after  May  31,
2003.  Otherwise,  it is effective on July  1,  2003  except  for
mandatorily redeemable non-controlling (minority) interest which,
on  October 29, 2003, the FASB decided to defer indefinitely. The
adoption  of SFAS No. 150 did not materially impact the Company's
financial position or results of operations

In  December  2003,  the  SEC  issued Staff  Accounting  Bulletin
("SAB") No. 104, "Revenue Recognition," which supercedes SAB  No.
101,  "Revenue Recognition in Financial Statements." SAB No.  104
rescinds  accounting guidance in SAB No. 101 related to  multiple
element arrangements, which was previously superceded by EITF 00-
21  (see  above).  The adoption of SAB No. 104  did  not  have  a
material  impact  on  the  Company's  results  of  operations  or
financial position.

In  November   2004,  the FASB issued  SFAS No. 151,   "Inventory
Costs  -  An Amendment of ARB Opinion No. 43,  Chapter 4"  ("SFAS
151").   SFAS 151 amends the guidance  in ARB  No.  43,   Chapter
4,   "Inventory   Pricing,"   to  clarify   the  accounting   for
abnormal   amounts of idle facility  expense,  freight,  handling
costs,    and   wasted   material    (spoilage).    Among   other
provisions,   the  new  rule requires that  items  such  as  idle
facility  expense,   excessive  spoilage,   double  freight,  and
rehandling   costs  be  recognized  as  current  period   charges
regardless  of  whether   they  meet  the   criterion    of   "so
abnormal"  as  stated  in  ARB No. 43. Additionally,   SFAS   151
requires   that  the  allocation  of  fixed  production overheads
to the costs of  conversion  be based on the normal  capacity  of
the  production   facilities.  SFAS 151 is effective  for  fiscal
years   beginning  after June  15,  2005.   We  have   considered
SFAS 151 and have  determined  that  this pronouncement will  not
materially impact our consolidated results of operations.

<PAGE>

                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS


NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Standards (Continued)

In  November  2004,  the FASB issued  SFAS No.  152,  "Accounting
for  Real  Estate  Time-Sharing  Transactions  - An amendment  of
SFAS  No.  66  and  67".   This statement  amends  SFAS  No.  66,
"Accounting for Sales of Real Estate, to reference the  financial
accounting  and reporting  guidance for real estate  time-sharing
transactions  which is provided in AICPA  Statement  of  Position
("SOP")    04-2,  "Accounting   for  Real  Estate    Time-Sharing
Transactions."   This   statement  also  amends  SFAS   No.   67,
"Accounting  for  Costs  and Initial Rental  Operations  of  Real
Estate   Projects,"  to  state the guidance  for  (a)  incidental
costs  and  (b) costs incurred to sell real estate projects  does
not   apply   to  real  estate  time-sharing  transactions.   The
accounting  for those costs is subject to guidance in  SOP  04-2.
SFAS  152  is effective  for fiscal years  beginning  after  June
15,  2005.  We have considered  SFAS  152  and  have   determined
that   this   pronouncement  is  not applicable  to  our  current
operations.

In December 2004, the Financial Accounting Standards Board (FASB)
issued  a  revision  to  Statement No. 123, Share-Based  Payment.
This   revision  supersedes  Accounting  Principles  Board  (APB)
Opinion No. 25, Accounting for Stock Issued to Employees, and its
related   implementation   guidance.   This   revision   requires
companies  to  recognize the cost of stock options based  on  the
grant-date  fair  value pursuant to their employee  stock  option
plans  over the period during which the recipient is required  to
provide  services  in  exchange for the  options,  typically  the
vesting  period.  Pursuant to the requirements of the  Statement,
the  Company plans to adopt the provisions of the standard during
the  third  quarter  of  2005  using  the  modified-retrospective
transition method provided in the Statement.  Under this  method,
the  Company  will  restate  all prior  periods  presented  on  a
consistent  basis.  The Company does not believe the adoption  of
this  Statement will have a material impact on the trend  of  net
earnings or net earnings per share.

In   December   2004,  the FASB issued  Staff  Position   ("FSP")
No.   109-2,  "Accounting   and  Disclosure   Guidance   for  the
Foreign   Earnings  Repatriation Provision  within  the  American
Jobs  Creation  Act  of  2004"  ("FSP   109-2").   This  position
provides    guidance  under  FASB  Statement   No.   109   ("SFAS
109"),  "Accounting for Income Taxes", with respect to  recording
the  potential  impact  of  the repatriation  provisions  of  the
American   Jobs  Creation  Act  of  2004  (the  "Jobs  Act")   on
enterprises'  income tax expense and deferred tax liability.  The
Jobs  Act  was  enacted on October 22,  2004.  FSP 109-2   states
that  an   enterprise   is  allowed  time  beyond  the  financial
reporting period of enactment to evaluate the effect of the  Jobs
Act  on  its  plan for  reinvestment  or repatriation of  foreign
earnings  for purposes of applying SFAS 109. We have   considered
SFAS  153  and  have  determined that this pronouncement  is  not
applicable to our current operations.

In  December  2004, the FASB issued SFAS No. 153,  "Exchanges  of
Nonmonetary  Assets  - An  Amendment  of APB  Opinion   No.   29,
Accounting   for  Nonmonetary Transactions"  ("SFAS 153").   SFAS
153   eliminates  the exception from fair value  measurement  for
nonmonetary  exchanges of similar productive assets in  paragraph
21(b)  of  APB  Opinion  No. 29,  "Accounting   for   Nonmonetary
Transactions,"   and  replaces   it   with  an   exception    for
exchanges  that  do not  have  commercial substance.   SFAS   153
specifies    that  a   nonmonetary   exchange   has    commercial
substance   if  the   future  cash  flows  of  the   entity   are
expected  to  change significantly  as a result of the  exchange.
SFAS 153 is  effective  for fiscal periods  beginning  after June
15, 2005.  We have  considered  SFAS 153 and have determined that
this pronouncement is not applicable to our current operations.

<PAGE>



                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 2. DESCRIPTION OF BUSINESS

Background

Dionics,  Inc., a Delaware corporation, is located at 65 Rushmore
Street,  Westbury, NY.  Dionics, Inc., designs, manufactures  and
sells  silicon  semi-conductor  electronic  products,  individual
discrete  components,  multi-component  integrated  circuits  and
multi-component hybrid circuits.

NOTE 3. TRADE ACCOUNTS RECEIVABLE

As  of  December 31, 2003 and 2002 the trade accounts  receivable
were as follows:

                                                   2003

           Trade accounts receivable              $61,686
           Less: allowance for doubtful accounts   (7,286)

           Trade accounts receivable, net         $54,400


At  December 31, 2003 trade accounts receivable were  pledged  as
collateral in connection with bank loans.
There  was  no bad debt expense for the years ended December  31,
2003 and 2002.


NOTE 4. PROPERTY, PLANT AND EQUIPMENT

As  of December 31, 2003  property, plant and equipment consisted
of the following:

                                            2003

        Equipment                       $1,199,747
        Building                           121,986
        Furniture and Fixtures             233,268
        Leasehold Improvements             169,435
        Land                                40,000
                                         1,764,436

        Less:   accumulated
        depreciation                    (1,693,636)

        Net  property, plant,          $
        and equipment                       70,800


Depreciation expenses for the years ended December 31,  2003  and
2002 were $6,700 and $8,800, respectively.

<PAGE>

                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 5.  DEFERRED COMPENSATION PAYABLE

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

In connection with the refinancing of the Wachovia Small Business
Capital (formerly First Union Small Business Capital), a modified
deferred compensation payment schedule commencing January 1, 1999
was agreed to by us  and our chief executive officer.

We have executed a mortgage subordinate to the existing first and
second  mortgage  secured  by land and building  at  65  Rushmore
Street,  Westbury, NY in favor of the chief executive officer  to
insure amounts due him on the deferred compensation agreement.

A  new 72-month schedule consists of a 24-month period of reduced
consecutive  monthly  payments, to be  followed  by  an  18-month
period of no payments except for monthly interest.  At the end of
the  42nd  month, the total of the delayed payments  becomes  due
followed by 30 months of principal and interest payments.

Notwithstanding  the above schedule for payments,  other  than  a
life  insurance  policy  to cover death  benefits,  we  have  not
specifically  designated funds with which to meet  these  payment
requirements.   In view of its continuing total  indebtedness  as
well as our need for operating capital, there can be no assurance
that  we  will be able to satisfy the terms of this new agreement
in full or in part.  Should such unfavorable circumstances occur,
the  terms of the agreement may have to again be renegotiated  to
better match our then -current financial circumstances.

Under the standby agreement of the SBA Loan the chief executive
will take no action on the deferred compensation unless
authorized by the lender.

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

NOTE 6. LONG-TERM DEBT

Our  long-term debt of  at December 31, 2003 includes a  mortgage
and notes payable as follows:


                          2003

Mortgage payable        $ 368,000
Term loans                 35,000
Lease                       8,400
SBA - Loan                305,800
                          717,200

Less:  current
maturities                (46,300)

                        $ 670,900

<PAGE>
                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 6. LONG-TERM DEBT  (continued)

Principal payments over the next five years and in total are:

    Year                     Payments

    2004                     $ 46,300
    2005                       63,570
    2006                       66,301
    2007                       69,498
    2008                       70,141
    After 2008                401,429

                             $717,200


Mortgage Payable

In  1998,  a  loan  agreement was entered  into  between  us  and
Wachovia  Small  Business  Capital  (formerly  the  First   Union
Business  Capital).  The loan amount was $384,685 which  requires
360  monthly self-liquidating payments in the amount  of  $2,885.
Interest  is  calculated on the unpaid principal  balance  at  an
initial  rate of 8.23% per annum.  The interest rate on the  loan
is  variable  depending on an independent index  related  to  the
yield  of  United States Treasury Notes.  This rate  change  will
occur once every 60 months.  $358,232 of the mortgage amount  was
used  to  satisfy  the balance of the mortgage  due  D.A.N  Joint
Venture in full.

Term Loans

Term loans agreements with D.A.N. Joint Venture, dated 1999, were
restructured  and  replaced by a new term loan in  the  principal
amount of $283,850, ("Term Loan A") structured over two five-year
periods.  During the first five-year period ended March 31,  1999
the  Company  paid  interest only.  During the  second  five-year
period commencing April 1, 1999, the balance due was to be repaid
over  60 equal monthly installments, plus interest at prime  plus
two  percent  on  the unpaid balance.  The monthly  payments  are
$6,423.  The  principal  balance as  of  December  31,  2003  was
$22,034.

D.A.N.  Joint Venture and the Company also re-financed and amount
of  $167,500  stemming from the original mortgage  amount,  (Term
Loan  -  C).   Term  Loan - C, is structured over  two  five-year
periods, subject to the same terms noted above in Term Loan -  A.
The  principal  balance  as of December  31,  2003  was  $13,002.
Monthly payments for this loan are $3,790.

Small Business Administration Loan

On  October  20,  2002, the Company was approved with  the  Small
Business  Administration for a loan in the  amount  of  $305,800.
Interest  will  accrue  at  the rate of  4%  per  annum.  Monthly
payments  of  $5,632 will begin 25 months from the  date  of  the
promissory note.  Each payment will be applied first to  interest
accrued  to the date of receipt of each payment, and the balance,
if  any, will be applied to the principal.  Interest will  accrue
only  on  funds actually advanced from the date of each  advance,
but  in  no  case  sooner than 24 months from  the  date  of  the
promissory note.
Dionics,  Inc.  will provide the deed of trust/mortgage  on  real
estate  located  at 65 Rushmore Street, Westbury,  NY  11590,  as
collateral.

<PAGE>

                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 7. COLLATERIALIZED ASSETS

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

NOTE 8. STOCK OPTION PLAN

The  Company  has  an employee incentive compensation  plan  (the
"Plan")  pursuant to which the Company's board of  directors  may
grant  stock  options  to  officers  and  key  employees.      In
September 1997, the Board of Directors of the Company adopted the
1997  Incentive Stock Option Plan (The "1997 Plan") for employees
of  the Company to purchase up to 250,000 shares of common  stock
of  the  Company.   Options  granted  under  the  1997  plan  are
"incentive  stock  options" as defined  in  Section  422  of  the
Internal Revenue Code.  Any stock options granted under the  1997
Plan  shall  be granted at no less than 100% of the  fair  market
value  of  the  Common Stock of the Company at the  time  of  the
grant.   As  of  December 31, 2002, options  to  acquire  192,500
shares  of  Common Stock have been granted under  the  1997  Plan
which   includes  (i)  120,000  options  originally  granted   on
September 11, 1997 and repriced on February 21, 2002 in order  to
reduce  the exercise price from $.38 to $.10 per share  and  (ii)
68,500  additional options granted on February 21, 2002  with  an
exercise  price  of  $.10  per share and (iii)  4,000  additional
options  granted on April 8, 2002 with an exercise price of  $.20
per share. As of December 31, 2003, 57,500 options were available
for future grant.

            Number of       Weighted
             options         Average     Exercise
            Currently       Remaining      Price
           Exercisable      Estimated
                              Life

             188,500          5.31        $  0.10
               4,000          8.27           0.20
             192,500          5.37           0.10


Since  the  market price of the Company's Common Stock was  below
the  exercise  option  at December 31, 2003  and  2002,  and  the
Company  had a net loss for the twelve months ended December  31,
2003  and  2002,  the  options were anti-dilutive  and  were  not
considered in determining diluted earnings per share.

<PAGE>


                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 9. TAXES AND NET OPERATING LOSS CARRYFORWARDS

As  of  December 31, 2003, the components of deferred tax  assets
were as follows:

Deferred tax assets:

     Accounts receivable allowance          3,000
     Net operating loss carryforward      465,000

     Total gross deferred tax assets      468,000
     Less: Valuation allowance           (468,000)

     Net deferred tax assets             $    --



Dionics   had   net  operating  losses  (NOLs)  of  approximately
$1,366,200  at  December 31, 2003.  These NOLs and  corresponding
estimated  tax  assets, computed at a 34%  tax  rate,  expire  as
follows:

               Year loss   Expiration   Loss       Estimated
               Incurred    Date         Amount     Tax Asset

                 1992      2007         $115,200     39,000
                 2001      2016          373,000    127,000
                 2002      2017          603,000    205,000
                 2003      2018           94,000    275,000

                Total                 $1,366,200  $ 465,000

Under  the  provisions  of  SFAS 109,  NOLs  represent  temporary
differences  that  enter  into the calculation  of  deferred  tax
assets.  Realization of deferred tax assets associated  with  the
NOL  is dependent upon generating sufficient taxable income prior
to their expiration.

Management  believes that there is a risk that certain  of  these
NOLs  may  expire  unused  and, accordingly,  has  established  a
valuation  allowance against them. Although  realization  is  not
assured  for  the  remaining deferred tax assets,  based  on  the
historical  trend in our sales and profitability, sales  backlog,
and budgeted sales management believes it is likely that they may
not  be  totally  realized through future  taxable  earnings.  In
addition,  the  net deferred tax assets could be reduced  in  the
near term if management's estimates of taxable income during  the
carryforward period are significantly reduced.

The  valuation  allowance of $395,000 as  of  December  31,  2002
increased  by $93,000 in 2003. The change in valuation  allowance
was a consequence of additional net operating loss of $94,000  in
2003  and  a  decrease  of  $1,000  in  allowances  for  doubtful
accounts. The Company believes it is possible that the benefit of
these additional assets may not be realized in the future.

<PAGE>
                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 10. COMMITMENTS AND CONTINGENCIES

The Company has an agreement with its chief executive officer  to
pay  to  his  widow  or estate for a period  of  five  (5)  years
following his death an amount per year equal to the annual salary
being  earned by him at the time of his death, provided  that  he
was  an  employee of the Company at the time of his death.   Such
arrangements  had  previously  been  funded  by  life   insurance
policies  owned  by Dionics' on his life; however  currently  the
policy remains unfunded.

NOTE 11.  RETIREMENT PLANS

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's 401(k)
Plan  during  1993.   The amount paid on February  22,  2002  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 the  same
number  of  shares as a bonus to the same eleven employees.   The
employees may not dispose of these shares 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  has  been  charged  as  an  expense  to  the  various
departments  of  the  Company.   Such  76,347  shares  issued  in
February  2002  were  distributed under the  Company  2002  Stock
Compensation  Plan  (the "2002 Plan") which was  adopted  by  the
Company  in  February 2002.  The Company may issue up to  150,000
shares  under the 2002 Plan.  As of December 31, 2003,  no  other
shares have been granted under the 2002 Plan.

NOTE 12. RESEARCH AND DEVELOPMENT

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

NOTE 13. SUBSEQUENT EVENTS

In   August   2004,  the  Company  amended  its  Certificate   of
Incorporation  filed in the State of Delaware  and  effected  the
"Capitalization Agreement."  The Capitalization Agreement  amends
the  following: (i) increased the number of authorized shares  of
Common  Stock  of  the Company from 5,000,000  shares  of  Common
Stock,  $.01 par value, to 50,000,000 shares, and (ii) created  a
new class consisting of 1,000,000 shares of Preferred Stock, $.01
par value.

In  May  2004, the Company entered into the following  investment
agreements,  upon  an increase in the number  of  its  authorized
shares of Common Stock the Capitalization Agreement:

  1. Stock Purchase Agreement - 2,200,000 shares of  Common Stock
     would be issued in consideration for an investment of $110,000.
     In addition to the execution of the agreement, Kenneth Levy will
     become a director of the Company, whereby he will be entitled to
     acquire 200,000 shares of Common Stock for $10,000.

  2. The Kravitz Note - 1,000,000 shares of Common Stock and a
     three-year warrant to acquire an additional 1,000,000 shares
     exercisable at $.05 per share has been issued to the president of
     the Company, Bernard Kravitz, for an investment of $50,000.

<PAGE>
                          DIONICS, INC.
                  NOTES TO FINANCIAL STATEMENTS

NOTE 13. SUBSEQUENT EVENTS (continued)

In   May   2004,  the  Company  issued,  under  the  2002   Stock
Compensation Plan, 172,500 restricted shares of Common  Stock  to
15  employees  equal  to  the number  of  options  held  by  such
employees   which  shares  were  issued  in  place  of   and   in
cancellation  for  all of the Outstanding  Options.   During  the
quarter ended June 30, 2004, the Company agreed to issue a  five-
year option to a newly retained employee to acquire up to 105,000
shares  of  Common  Stock at $.15 per share.   The  Company  also
agreed to issue three-year warrants to two persons to acquire  up
to 5,000 shares each at $.15 per share.