SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                             Form 10-K

/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES ACT OF 1934(Fee Required)

For the Fiscal Year Ended June 30, 2001
Commission File Number 2-80891-NY

                     DAINE INDUSTRIES, INC.

      (Exact Name of Registrant as Specified in its Charter)

Delaware                                          11-2881685

(State or other jurisdiction of            (I.R.S. Employer
Incorporation or Organization)             Identification Number)

           461 Beach 124 St.  Belle Harbor, NY 11694

(Address of Principal Executive Office)                  (Zip Code)

                        (718) 318-0994

      (Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common stock, par value $.00001

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding twelve
months and (2) has been subject to such filing requirements for the
past ninety days.

  Yes / X /             No /   /.

Indicate by check if disclosure of delinquent filers pursuant to
Item 405 or Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K.  /X/

As of September 9, 2001, there was no aggregate market value of the
voting stock held by non-affiliates of the Registrant due to the
fact that there was no trading market in the shares of the
Registrant.

The Number of Shares Outstanding of the Registrant at September 9,
2001 was 1,242,394.




                    DAINE INDUSTRIES, INC.

                            Part 1

Item 1.      Business.

Daine Industries, Inc. ("The Registrant") was incorporated on
September 24, 1987 and is currently seeking to acquire an operating
business.  From February 1990 until November 19, 1998 the
Registrant operated the business of Lite King Corp. and currently
is a public vehicle to acquire an operating business.

On February 26, 1990, the Registrant acquired substantially
all of the assets (with the exception of the cash) and the business
of Lite King Corporation ("Lite King"), a manufacturer and
assembler of wiring devices, cord sets and sockets.  On November
19, 1998, the Registrant filed a Form 10-SB to spin-off Lite King
Corp's shares of common stock to its shareholders on a pro rata
basis.  The Registrant owned all of the 2,484,620 outstanding
shares of Lite King which was distributed to its shareholders as of
November 30, 1998 on the basis of one share of Lite King for each
100 shares of Daine held presplit.  The distribution of stock
certificates of Lite King was made in May 1999.

Management of the Registrant believe the two companies as
separate entities may create additional value for the shareholders.
 There is no assurance of any trading market developing.
Management will attempt to use the Registrant as a "shell" vehicle
to acquire an operating business.

During the fiscal year ended June 30, 2001, the Registrant had
a net loss of $29,224.  For the year ended June 30, 2000, the
Registrant had a net loss of $32,522.

Item 2.      Properties

As of June 30, 2001, the Registrant owned no property.  The
Registrant's office is located in the office of Modern Technology
Corp., an affiliated company.

Item 3.      Legal Proceedings

The Registrant as owner of a vehicle and the Registrant's
president, as driver are defendants in a lawsuit in the County of
Brooklyn, New York State seeking damages of $1,100,000 as a result
of an accident.  The Registrant has liability insurance in the
amount of $1,000,000.  The Registrant and its president have denied
any and all liability and are being defended by the insurance
company.  The Registrant expects the lawsuit to be dismissed or to
be settled within the policy limits.

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

None.


      PART II

Item 5.      Market for Registrant's Common Equity and Related
Stockholders Matters.

The following table sets forth, for the periods indicated, the
Company's common stock as published by the National Daily Quotation
Service.  Prices represent quotations between dealers without
adjustments for retail markups, markdowns or commissions, and may
not represent actual transactions.

                                        High Bid           Low Bid

Quarter ended September 30, 1999            *                    *
Quarter ended December 31, 1999             *                    *
Quarter ended March 31, 2000                *                    *
Quarter ended June 30, 2000                 *                    *
Quarter ended September 30,2000             *                    *
Quarter ended December 31, 2000             *                    *
Quarter ended March 31, 2001                *                    *
Quarter ended June 30, 2001                 *                    *

*there were no pink sheet market makers for the Registrant's common
stock; no price information was available.

On September 9, 2001, there was no market for the shares of
the Registrant.
Number of shareholders of record on September 9, 2001 was 669.

Dividends - The Company has not paid any dividends since its
inception and presently anticipates that all earnings, if any, will
be retained for development and expansion of the Registrant's
business and that no dividends on the common stock will be declared
in the foreseeable future.

Item 6.      Selected Financial Data

                          For The Year Ended June 30,
                        2001        2000          1999

Interest Income      $  3,417      $  4,438      $    5,598
Net Income (Loss)     (29,224)      (32,522)        (97,486)
Net Income (Loss)
 Per Share              $(.02)        $(.03)           $(.08)
Total Assets           56,042        86,766          119,788
Long Term Debt            -0-           -0-              -0-
Dividends                 -0-           -0-              -0-

Item 7.      Management's Discussion And Analysis of Results of
Operations.




The Registrant's net loss for the year ended June 30, 2001 can
be primarily attributed to general and administrative expenses
(primarily accounting and legal expenses) of $29,922 and
depreciation and amortization expense of $-0-, and income tax
expense of $2,719.  For the year ended June 30, 2000, general and
administrative expenses (primarily accounting and legal expenses)
amounted to $28,418 and depreciation and amortization expense of
$8,662, offset by income tax benefits of $120.

Interest income declined to $3,417 during the year ended June
30, 2001 from $4,438 generated during the year ended June 30, 2000.
 For the year ended June 30, 1999, interest income amounted to
$5,598.  The varying interest income figures listed above reflects
declining cash balances from fiscal years 1999-2001.

No salaries were paid to officers of the Registrant during
fiscal years 1999, 2000 and 2001.

The Registrant has financed its activities primarily from prior
operating activities.  For fiscal years 1999, 2000 and 2001, cash
flows from investing activities have not been material.  For fiscal
years 2001 and 2000, cash flows from financing activities have been
immaterial.  During fiscal year 1999, cash was used in financing
activities from the spinoff of Lite King Corp. (amounting to
$723,564).

As of June 30, 2001, the Registrant had total assets of
$56,042, total liabilities of $4,500 and shareholders' equity of
$51,542.  June 30, 2001 figures for the Registrant include current
assets of $56,042 (cash and cash equivalents), current liabilities
of $4,500 consisting of accrued expenses, and shareholders equity
of $51,542, consisting of common stock of $12, paid in capital of
$1,444,070 and an accumulated deficit of $1,392,540.  The current
ratio (current assets to current liabilities) at June 30, 2001 was
approximately 12:1.

As of June 30, 2000, the Registrant had total assets of
$86,766, total liabilities of $6,000 and shareholders' equity of
$80,766.  June 30, 2000 figures for the Registrant include current
assets of $86,766 (cash and cash equivalents), current liabilities
of $6,000 (accrued expenses), and shareholders' equity of $80,766,
consisting of common stock of $12, paid in capital of $1,444,070
and an accumulated deficit of $1,363,316.  The current ratio
(current assets to current liabilities) at June 30, 2000 was
approximately 14:1.

A comparison with total assets, liabilities and shareholders'
equity figures at June 30, 1999 would not be meaningful since June
30, 1998 figures include the assets, liabilities and shareholders'
equity of Lite King Corp., the ownership of which was spun out to
the Registrant's shareholders during the fiscal year ended June 30,
1999.



Management is currently seeking out private companies for a
possible merger/acquisition, although no assurance can be given
that any of its efforts will lead to an eventual merger/acquisition
in the near future.  At the present time, management is currently
considering several projects for potential merger/acquisition,
although no assurance can be given that any will lead to
merger/acquisition.

On July 24, 2000 the Registrant effected a one (1) for two
hundred (200) reverse split of its common stock and reduced the
number of authorized shares from 350,000,000 to 50,000,000.  This
reverse split was completed to make the Registrant more presentable
to future merger/acquisition candidates.

Item 8.      Financial Statements

Attached.

Item 9.      Changes In and Disagreements with Accountants in
Accounting and Financial Disclosure.

None.

      PART III

Item 10.      Directors and Executive Officers

The executive officers and directors of the Registrant are as
follows:

                     Age  Title                    Term Expires

Arthur Seidenfeld    50   President and Director   Next annual
                                                   meeting
Anne Seidenfeld      88   Treasurer,Secretary      Next annual
and Director                                       meeting
Gerald Kaufman       60   Director                 Next annual
                                                   meeting

Each of the above named individuals has served the Registrant
in the capacity indicated since its formation on September 24, 1987
(with the exception that Anne Seidenfeld became the Registrant's
secretary on December 17, 1989 and Gerald Kaufman became a director
in 1990), and Arthur Seidenfeld and Anne Seidenfeld may be deemed a
"parent" under the Rules and Regulations promulgated under the
Securities Act of 1933, as amended.

Arthur Seidenfeld, has been president and a director of the
Registrant since its formation.  Mr. Seidenfeld was awarded a B.S.
Degree in Accounting from New York University in 1972 and an M.B.A.
in Finance in 1978 from Pace University.

He is also President and Director of Modern Technology Corp.,
a public company.  He was president of Lite King Corp., from 1989
until March 2001.  He was also President and a Director of Davin
Enterprises, Inc. ( a publicly traded company that went public in
Sept. 1987), from 1987 until December 1997 when Davin merged with
Creative Masters International, a manufacturer of replica cars.
From July 1994 until April 1997, he was also treasurer-secretary of
Soft Sail Wind Power Inc., a newly established company engaged in
wind energy research and development activities.  From December
1996 until December 1998, he was President and Director of Coral
Development Corp., a public company which merged with Omnicomm
Systems Inc., a company engaged in the computer software/internet
field.  He is president of Excess Materials, Inc., a 70% owned
subsidiary of Modern Technology Corp. engaged in the internet e-
commerce field.  Since December 2000, he is secretary and director
of Scientio, Inc., a software development company.


Anne Seidenfeld, Treasurer-Secretary and Director, received
her diploma from Washington Irving High School, New York City, in
1931.  Mrs. Seidenfeld is the Treasurer, Secretary and Director of
Modern Technology Corp. and Lite King Corp.  She is treasurer and
secretary of Excess Materials Inc.  She was Treasurer, Secretary
and Director of Coral Development Corp. from December 1996 to
December 1998 and was treasurer, secretary and director of Davin
Enterprises, Inc. from 1987 until December 1997.

Gerald Kaufman, Director, has been a practicing attorney for
over thirty years.  He has served as a director of the Registrant,
along with being a director of Modern Technology Corp. since 1990
and a director of Lite King Corp since 1998.  He has also been a
director of American Mayflower Life Insurance Co. since 1973.

Arthur Seidenfeld is the son of Anne Seidenfeld.

No forms 4 or 5 were required to be filed by officers or
directors during the fiscal year ended June 30, 2001.


Item 11.      Management - Remuneration and Transactions

The officers of the Registrant did not receive salaries from
the Registrant during the year ended June 30, 2001 with the
exception of the salaries received from Lite King Corp.

      PART IV

Item 12.      Security Ownership of Certain Beneficial Owners and
Management.

a.      The following are known to Registrant to be beneficial owners
of 5% or more of the Registrant's common stock (effective for
200/1 reverse split on July 24, 2000):


Title of Class
Common Stock

Name of Beneficial Owner        Amount &            Percentage
                                Nature of             of Class
                                Beneficial
                                Ownership

Modern Technology Corp.
461 Beach 124 Street
Belle Harbor, New York            360,000            29.0%

Arthur Seidenfeld
461 Beach 124 Street
Belle Harbor, New York            180,000            14.5%

Anne Seidenfeld
461 Beach 124 Street
Belle Harbor, New York            100,000            8.0%

American Israel Ventures Corp.
461 Beach 124 Street
Belle Harbor, New York             75,000            6.0%



Arthur Seidenfeld and Anne Seidenfeld are president and secretary,
treasurer respectively of Modern Technology Corp. and also own 48%
and 12% respectively of the common stock of Modern Technology Corp.
Arthur Seidenfeld owns 70% of the outstanding shares of American
Israel Ventures Corp.  Anne Seidenfeld owns 25% of the outstanding
shares of American Israel Ventures Corp.  Arthur Seidenfeld and
Anne Seidenfeld are president and treasurer-secretary respectively
of American Israel Ventures Corp.

b.      The shares owned by management are as follows:
Common Stock.
Name of Beneficial Owner        Amount &            Percentage
                                Nature of             of Class
                                Beneficial
                                Ownership


  Arthur Seidenfeld              180,000            14.5%
  Anne Seidenfeld                100,000             8.0%
  Gerald Kaufman                  15,000             1.2%

Item 13.      Certain Relationships and Related Transactions.

The Registrant's corporate office is in the facility of Lite
King Corp., an affiliated company.

Item 14.      Exhibits, Financial Statements and Schedules.

a)  Financial Statements and Financial Statement Schedules.

Balance Sheets - June 30, 2001 and 2000.
Statement of Shareholders' Equity For the Period July 1, 1998
to June 30, 2001.
Statement of Operations For the Years Ended June 30, 2001,
2000 and 1999.
Statement of Cash Flows For the Years Ended June 30, 2001,
2000, and 1999.
Notes to the Financial Statements For the Years Ended June 30,
2001, 2000 and 1999.

b)  Schedules

Other schedules not submitted are omitted because the
information is included elsewhere in the financial statements
or the notes thereto, or the conditions requiring the filing
of these schedules are not applicable.

Supplemental information to be furnished with reports filed
pursuant to Section 15(d) of the Securities Act of 1934 by
Registrant which have not registered securities pursuant to
Section 12 of the Securities Act of 1934:

a)      No annual report or proxy material has been sent to
security holders.  When such report or proxy materials
are furnished to securities holders subsequent to the
filing of this report, copies shall be furnished to the
Commission when sent to securities holders.




                       SIGNATURES

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


                 DAINE INDUSTRIES, INC.



                 BY:     Arthur Seidenfeld
                         President
                 Dated:  September 20, 2001



Pursuant to the requirements of the Securities 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 date
indicted.

Name                          Title                            Date



Arthur Seidenfeld            President and Director      Sept. 20, 2001
Principal Executive
Officer and Principal
Financial Officer



Anne Seidenfeld              Treasurer, Secretary        Sept. 20, 2001
and Director



Gerald Kaufman               Director                    Sept. 20, 2001


















                  DAINE INDUSTRIES, INC.

                   FINANCIAL STATEMENTS

                  JUNE 30, 2001 AND 2000
























                  I N D E X





                                                     Page


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT       1


BALANCE SHEETS - ASSETS                                 2


BALANCE SHEETS
  - LIABILITIES AND SHAREHOLDERS' EQUITY                2


STATEMENTS OF SHAREHOLDERS' EQUITY                      3


STATEMENTS OF OPERATIONS                                4


STATEMENTS OF CASH FLOWS                                5


NOTES TO THE FINANCIAL STATEMENTS                       7-10












      REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


To the Board of Directors and Shareholders
DAINE INDUSTRIES, INC.
Brooklyn, New York


We have audited the accompanying balance sheets of DAINE
INDUSTRIES, INC. as of June 30, 2001 and 2000 and the related
statements of operations, statements of shareholders' equity and
cash flows for each of the three years in the period ended June 30,
2001.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion
on these financial statements based upon our audit.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our 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 DAINE
INDUSTRIES, INC. as of June 30, 2001 and 2000, and the results of
its operations and its cash flows for each of the three years in
the period ended June 30, 2001, in conformity with generally
accepted accounting principles.




                                 GREENBERG & COMPANY LLC

Springfield, New Jersey
July 20, 2001


                                           Page 1 of 10


                          DAINE INDUSTRIES, INC.
                             BALANCE SHEETS



                              A S S E T S


                                         June 30,
                                    2001        2000
                                    ----        ----

CURRENT ASSETS
Cash and Cash Equivalents      $  56,042    $ 86,766
                                  ------      ------
Total Current Assets              56,042      86,766
                                  ------      ------
FIXED ASSETS, At Cost
Machinery and Equipment          31,032       31,032
Less:  Accumulated Depreciation (31,032)     (31,032)
                                 ------       ------
                                    -0-          -0-
                                 ------       ------

TOTAL ASSETS                    $56,042      $86,766
                                 ======       ======

      L I A B I L I T I E S  A N D  S H A R E H O L D E R S'  E Q U I T Y



CURRENT LIABILITIES
Accrued Expenses                  $4,500      $6,000
                                   -----       -----
Total Current Liabilities          4,500       6,000
                                   -----       -----
COMMITMENTS AND CONTINGENCIES


SHAREHOLDERS' EQUITY
Common Stock (Par Value
  $.00001) 50,000,000 shares
  authorized, 1,242,394
  shares issued and outstanding       12          12
Paid-In Capital                1,444,070   1,444,070
Retained Earnings (Deficit)   (1,392,540) (1,363,316)
                               ---------   ---------
TOTAL SHAREHOLDERS' EQUITY        51,542      80,766
                               ---------   ---------

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY            $ 56,042    $ 86,766
                                  ======      ======

See accompanying summary of accounting policies and notes to the
financial statements.
                                                   Page 2 of 10





                     DAINE INDUSTRIES, INC.
              STATEMENTS OF SHAREHOLDERS' EQUITY
         For The Period July 1, 1998 to June 30, 2001



                     Common Stock                             Total
                  Number      $.00001             Retained    Share-
                      of        Par   Paid-In     Earnings    holders'
                  Shares       Value  Capital     (Deficit)   Equity
                  ---------    --    ---------     -------   --------

BALANCES AT
JULY 1, 1998      1,242,394   $12   $1,444,070 $   134,520  $1,578,602

Net Income (Loss
for the Year Ended
June 30, 1999                                      (97,486)   (97,486)

Lite King Corp
spinoff to Daine
stockholders                                    (1,367,828) (1,367,828)
                  ---------    --    ---------   ---------   ---------
BALANCES AT
JUNE 30, 1999     1,242,394    12    1,444,070  (1,330,794)    113,288

Net Income (Loss)
for the Year Ended
June 30, 2000                                      (32,522)    (32,522)
                  ---------    --    ---------   ---------      ------
BALANCES AT
JUNE 30, 2000     1,242,394    12    1,444,070  (1,363,316)     80,766

Net Income (Loss)
for the Year Ended
June 30, 2001                                      (29,224)    (29,224)

                  ---------    --    ---------   ---------      ------
BALANCES AT
JUNE 30, 2001     1,242,394   $12   $1,444,070 $(1,392,540) $   51,542
                  =========    ==    =========   =========      ======





See accompanying summary of accounting policies and notes to the financial
statements.


                                                              Page 3 of 10


                          DAINE INDUSTRIES, INC.
                         STATEMENTS OF OPERATIONS




                                      For The Years Ended June 30,
                                        2001       2000        1999
                                        ----       ----        ----

Interest Income                    $   3,417  $   4,438   $   5,598

General and Administrative
  Expenses                           (29,922)   (28,418)    (57,724)

Depreciation and Amortization
  Expense                                -0-     (8,662)     (5,320)
                                      ------     ------      ------
INCOME (LOSS) BEFORE INCOME TAXES    (26,505)   (32,642)    (57,446)

Income Tax Expense (Benefit)           2,719       (120)      3,199
                                      ------     ------      ------
INCOME (LOSS) FROM CONTINUING
OPERATIONS                           (29,224)   (32,522)    (60,645)

Spun-off Operations:
  Income (loss) from operation of
  Lite King Corp subsidiary (less
  applicable income tax expense of
  $-0-, $-0- and $352, respectively)     -0-        -0-     (36,841)
                                      ------     ------      ------

NET INCOME (LOSS)                  $ (29,224) $ (32,522)  $ (97,486)
                                      ======     ======      ======

Earnings (Loss) Per Share           $   (.02) $    (.03)  $    (.08)
                                         ===        ===         ===

Weighted Average Number of Common
  Stock Outstanding                1,242,394    1,242,394   1,242,394
                                   =========    =========   =========











See accompanying summary of accounting policies and notes to the financial
statements.


                                                             Page 4 of 10


                               DAINE INDUSTRIES, INC.
                             STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                 For The Years Ended June 30,
                                                2001           2000        1999
                                                ----          -----        ----


<S>                                          <C>            <C>      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)                            $(29,224)      $(32,522) $ (97,486)
Adjustment to Reconcile Net Income
  to Net Cash Provided By (Used In)
  Operating Activities:
Depreciation and Amortization
  Expense                                         -0-          8,662      5,320
      Loss from Spunoff Operations                -0-            -0-     36,841
Change in Assets and Liabilities:
Increase (Decrease) in Accounts
  Payable and Accrued Expenses                 (1,500)         (500)        500
                                               ------        ------      ------
Net Cash Provided By (Used In)
  Continuing Operations                       (30,724)      (24,360)    (54,825)
                                               ------        ------      ------
Net Cash Provided By (Used In)
  Spunoff Operations                              -0-           -0-     136,841
                                              ------         ------     -------
  Net Cash Provided By (Used In)
      Operating Activities                   (30,724)       (24,360)     83,816
                                              ------         ------      ------

CASH FLOWS FROM FINANCING ACTIVITIES
Spinoff of Lite King Corp                        -0-            -0-    (723,564)
                                                 ---            ---     -------
Net Cash (Used In) Financing
  Activities                                     -0-            -0-    (723,564)
                                                 ---            ---     -------
Net Increase (Decrease) in Cash and
Cash Equivalents                             (30,724)       (24,360)   (639,748)

Cash and Cash Equivalents at
Beginning of Period                           86,766        111,126     750,874
                                              ------        -------     -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD                               $ 56,042      $  86,766   $ 111,126
                                              ======         ======     =======


Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest                                    $    -0-      $    -0-    $     -0-
Income Taxes                                $  2,719      $    501    $   2,922
</TABLE>
See accompanying summary of accounting policies and notes to the financial
statements.
                                                                Page 5 of 10



                         DAINE INDUSTRIES, INC.
                 NOTES TO THE FINANCIAL STATEMENTS
             FOR THE YEARS ENDED JUNE 30, 2001 AND 2000





NOTE 1:      ORGANIZATION AND NATURE OF OPERATIONS

Daine Industries, Inc. (Daine) is a Delaware corporation.
Daine owned 100% of the stock of Lite King Corp. (LKC) a New
York corporation through November 19, 1998.  Daine's principal
purpose was to acquire and merge with an operating company.
LKC's principal business is the manufacture and assembly of
electrical wiring devices, cord sets and sockets.  LKC's
customers consist of manufacturers of lamps, chandeliers,
Christmas and Halloween illuminated decorations, novelties,
point of purchase displays, signs, and other electrical
specialties.  The customers are located throughout North
America.

On November 19, 1998, Daine filed a Form 10-SB to spin-off Lite
King Corp's shares of common stock to its shareholders on a pro
rata basis. The Registrant owned all of the 2,484,620
outstanding shares of Lite King which was distributed to its
shareholders as of November 30, 1998 on the basis of one share
of Lite King for each 100 shares of Daine held. The
distribution of stock certificates of Lite King was made in May
1999.


NOTE 2:      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accounts of the Company and its consolidated 100% owned
subsidiary, Lite King Corporation, are included in the
financial statements through March 31, 1999.  LKC incurred a
loss of $36,841 through March 31, 1999.  (See spinoff)  All
significant intercompany balances and transactions have been
eliminated.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid, short-term
investments with original maturities of 90 days or less.  The
carrying amount reported in the accompanying balance sheets
approximates fair value.



                                                     Page 6 of 10


                     DAINE INDUSTRIES, INC.
                NOTES TO THE FINANCIAL STATEMENTS
          FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
                        (Continued)





PROPERTY AND EQUIPMENT, At Cost

Depreciation is calculated using the straight line method over
the asset's estimated useful life, which generally
approximates 10 years.


ESTIMATES IN 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 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.

INCOME TAXES

The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes."  SFAS 109 has as its basic
objective the recognition of current and deferred income tax
assets and liabilities based upon all events that have been
recognized in the financial statements as measured by the
provisions of the enacted tax laws.

Valuation allowances are established when necessary to reduce
deferred tax assets to the estimated amount to be realized.
Income tax expense represents the tax payable for the current
period and the change during the period in the deferred tax
assets and liabilities.












                                                Page 7 of 10


                   DAINE INDUSTRIES, INC.
              NOTES TO THE FINANCIAL STATEMENTS
        FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
                      (Continued)




SPINOFF

In April of 1999, Daine Industries Inc. distributed all
2,484,620 issued and outstanding shares of Lite King Corp. to
the shareholders of Daine Industries Inc. on a pro rata basis.
 Daine did not recognize any gain or loss on the distribution
and also relies on Internal Revenue Code section 355 to treat
the distribution as a nontaxable stock dividend to Daine's
shareholders.

The following financial information relating to Lite King Corp
is provided pursuant to APB 30 (the amounts provided for the
year ended June 30, 1999 only included the operations of Lite
King through March 31, 1999).

                     For the Year Ended
                       June 30, 1999
                       -------------
Sales, net               $1,080,031
Interest income              15,434
Depreciation
  expense                    27,443

NOTE 3:      INCOME TAXES

Income taxes are accrued at the statutory U.S. and state income
tax rates.

Current income tax expense for June 30, 2001 and 1999 is
principally due to state and local income taxes based upon
capital.











                                               Page 8 of 10


                   DAINE INDUSTRIES, INC.
              NOTES TO THE FINANCIAL STATEMENTS
          FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
                         (Continued)


                               June 30,
                               -------
                       2001     2000        1999
                       ----     ----        ----
Current tax expense (benefit):
Income tax at
 statutory rates     $2,719   $  -0-      $3,199
Other differences       -0-     (120)        -0-
                      -----      ---       -----
Total Tax Expenses
       (Benefit)     $2,719   $ (120)     $3,199
                      =====      ===       =====

The tax effect of significant temporary differences, which
comprise the deferred tax assets and liabilities are as
follows:
                              June 30,
                              -------
                         2001        2000
                         ----        ----
  Deferred tax asset:
    Operating loss
    carryback           $44,000      $36,000
  Valuation allowance   (44,000)     (36,000)
                         ------      ------
Net deferred tax asset $   -0-      $  -0-
                         ======      ======
During the year ended June 30, 1999, Daine distributed the
stock of its subsidiary Lite King to Daine shareholders in a
tax free spinoff.  Daine has generated operating loss
carryforwards of approximately $116,500 which must be carried
forward for tax purposes until 2021.  The tax benefits
associated with these losses have been fully reserved in the
valuation allowance due to Daine's lack of operating
profitability.

NOTE 4:      POSTRETIREMENT EMPLOYEE BENEFITS

The company does not have a policy to cover employees for any
health care or other welfare benefits that are incurred after
employment (postretirement).  Therefore, no provision is
required under SFAS's 106 or 112.

NOTE 5:      COMMON STOCK

On July 24, 2000 the Company effected a one (1) for two hundred
(200) reverse split of the Company's common stock and reduced
the number of authorized shares from 350,000,000 to 50,000,000.
 The effective date of the reverse split is July 24, 2000 and
all share and per share amounts are retroactively restated to
give effect for the reverse split within these financial
statements.
                                                   Page 9 of 10




                          DAINE INDUSTRIES, INC.
                    NOTES TO THE FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
                             (Continued)



NOTE 6:      CONTINGENCIES

The Company as owner of a vehicle and the Company's president,
as driver are defendants in a lawsuit in the County of
Brooklyn, New York State seeking damages of $1,100,000 as a
result of an accident. The Company has liability insurance in
the amount of $1,000,000. The Company and its president have
denied any and all liability and are being defended by the
insurance company. The Company expects the lawsuit to be
dismissed or to be settled within the policy limits.


































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