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, 2002
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 3, 2002, 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 3, 2002
was 1,242,394.


                        DAINE INDUSTRIES, INC.

                                PART I

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 pre-split. The distribution of
stock certificates of Lite King was made in May 1999.

Management of the Registrant believes 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, 2002, the Registrant had a net loss
of $27,106. For the year ended June 30, 2001, the Registrant had a net
loss of $29,224.

Item 2.   Properties

As of June 30, 2002, 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, 2000        *                  *
Quarter ended December 31, 2000         *                  *
Quarter ended March 31, 2001            *                  *
Quarter ended June 30, 2001             *                  *
Quarter ended September 30, 2001        *                  *
Quarter ended December 31, 2001         *                  *
Quarter ended March 31, 2002            *                  *
Quarter ended June 30, 2002             *                  *

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

On August 26, 2002, there was no market for the shares of the Registrant.
Number of shareholders of record on August 26, 2002 was 661.

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.
In May 1999, the registrant distributed 2,484,620 shares of its former
subsidiary Lite King Corp. in a tax-free distribution to its shareholders.

Item 6.   Selected Financial Data

                                For The Year Ended June 30,
                         2002              2001              2000
                       --------          --------          --------
Interest Income        $    711          $  3,417          $  4,438
Net Income (Loss)       (27,106)          (29,224)          (32,522)
Net Income (Loss)
   Per Share            $ (.02)           $(.02)             $(.03)
Total Assets             28,936            56,042            86,766
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, 2002 can be
primarily attributed to general and administrative expenses (primarily
accounting and legal expenses) of $26,895 and depreciation and
amortization expense of  $-0-, and income tax expense of $922. For the
year ended June 30, 2001, general and administrative expenses (primarily
accounting and legal expenses) amounted to $29,922 and depreciation and
amortization expenses of $-0-, and income tax expense of $2,719.

Interest income declined from $711 during the year ended June 30, 2002
from $3,417 generated during the year ended June 30, 2001. For the year
ended June 30, 2000, interest income amounted to $4,438. The varying
interest income figures listed above reflects declining cash balances from
fiscal years 2000-2002 and lower interest rates.

No salaries were paid to officers of the Registrant during fiscal years
2000, 2001 and 2002.

The Registrant has financed its activities primarily from prior operating
activities. For fiscal years 2000, 2001 and 2002, cash flows from
investing activities have not been material. For fiscal years 2002 and
2001, cash flows from financing activities have been immaterial.

As of June 30, 2002, the Registrant had total assets of $28,936, total
liabilities of $4,500 and shareholders' equity of $24,436. June 30, 2002
figures for the Registrant include current assets of $28,936 (cash and
cash equivalent), current liabilities of $4,500 consisting of accrued
expenses, and shareholders equity of $24,436, consisting of common stock
of $12, paid in capital of $1,444,070 and an accumulated deficit of
$1,419,646. The current ratio (current assets to current liabilities) at
June 30, 2002 was approximately 5:1.

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 (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. No financial



data is presented for the fiscal years ended June 30, 1998 and 1999 as
Lite King Corp was spun out to the Registrant's shareholders in 1998 and
presentation of the data would not be comparative.  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 in discussion for a potential
merger/acquisition, although no assurance can be given that such
discussion will lead to a 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    51    President and Director   Next annual meeting.
Anne Seidenfeld      89    Treasurer, Secretary and
                             Director               Next annual meeting.
Gerald Kaufman       61    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 was
President of Excess Materials Inc., a 70% owned subsidiary of Modern
Technology Corp until early 2002 when Excess Materials Inc. was
liquidated. From December 2000 until May 29, 2002 he was secretary and
director of Scientio, Inc., a public company which was engaged in the
software development field. On May 29, 2002, he became president and
treasurer of Scientio Inc., which is no longer engaged in the software
field and is seeking a merger/acquisition as a public company and he also
remains a director of Scientio, Inc.

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 was secretary-treasurer of Lite King Corp. She was also
treasurer-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 was a director of Lite
King Corp from 1998 until 2001. He has been a director of Scientio Inc.
since May 29, 2002. He has also been a director of American Mayflower Life
Insurance Co. since 1973.

Arthur Seidenfeld is the son of Anne Seidenfeld.

No form 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, 2002.

                                  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

                                Amount & Nature of      Percentage of
Name of Beneficial Owner       Beneficial Ownership         Class
------------------------       --------------------     -------------
Modern Technology Corp.
461 Beach 124 St.
Belle Harbor, New York               360,000                29.0%

Arthur Seidenfeld
461 Beach 124 St.
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.
                                Amount & Nature of      Percentage of
Name of Beneficial Owner       Beneficial Ownership         Class
------------------------       --------------------     -------------
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 Modern Technology
Corp., an affiliated company.

Item 14.  Exhibits, Financial Statements and Schedules.

a)  Financial Statements and Financial Statement Schedules.

Balance Sheets- June 30, 2002 and 2001.
Statement of Shareholders' Equity For The Period July 1, 1999 to June 30,
2002.
Statement of Operations For The Year Years Ended June 30, 2002, 2001 and 2000.
Statement of Cash Flows For The Years Ended June 30, 2002, 2001, and 2000.
Notes to the Financial Statements For the Years Ended June 30, 2002, 2001 and
2000.

b)  Schedules

Other schedules not submitted are omitted because the information is
included elsewhere in the financial statements of 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:

c)  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 3, 2002

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 indicated.

Name                             Title                      Date
----                             -----                      ----
Arthur Seidenfeld     President and Director            Sept. 3, 2002
                      Principal Executive Officer and
                      Principal Financial Officer

Anne Seidenfeld       Treasurer-Secretary and
                      Director                          Sept. 3, 2002

Gerald Kaufman        Director                          Sept. 3, 2002





















                          DAINE INDUSTRIES, INC.

                           FINANCIAL STATEMENTS

                          JUNE 30, 2002 AND 2001

























                                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                          6-9












             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, 2002 and 2001 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, 2002.  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 auditing standards generally
accepted in the United States of America.  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, 2002 and 2001, and the results of its operations and its
cash flows for each of the three years in the period ended June 30, 2002,
in conformity with accounting principles generally accepted in the United
States of America.



                                   GREENBERG & COMPANY LLC

Springfield, New Jersey
July 15, 2002
                                                             Page 1 of 9



                          DAINE INDUSTRIES, INC.
                             BALANCE SHEETS

                              A S S E T S

                                                    June 30,
                                               2002          2001

CURRENT ASSETS
     Cash and Cash Equivalents           $    28,936     $    56,042
                                         -----------     -----------
     Total Current Assets                     28,936          56,042
                                         -----------     -----------
FIXED ASSETS, At Cost
     Machinery and Equipment                  31,032          31,032
     Less:  Accumulated Depreciation         (31,032)        (31,032)
                                         -----------     -----------
                                         $       -0-             -0-
                                         -----------     -----------

TOTAL ASSETS                             $    28,936     $    56,042
                                         ===========     ===========

   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     $     4,500
                                         -----------     -----------
     Total Current Liabilities                 4,500           4,500
                                         -----------     -----------

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)          (1,419,646)     (1,392,540)
                                         -----------     -----------
TOTAL SHAREHOLDERS' EQUITY                    24,436          51,542
                                         -----------     -----------


TOTAL LIABILITIES AND
     SHAREHOLDERS' EQUITY                $    28,936     $    56,042
                                         ===========     ===========


See accompanying summary of accounting policies and notes to the financial
statements.
                                                             Page 2 of 9



                          DAINE INDUSTRIES, INC.
                   STATEMENTS OF SHAREHOLDERS' EQUITY
               For The Period July 1,1999 to June 30, 2002



                      Common Stock                                Total
                    Number    $.00001               Retained      Share-
                      of        Par     Paid-In     Earnings     holders'
                    Shares     Value    Capital     (Deficit)     Equity
                   ---------  -------  ----------  -----------   --------
BALANCES AT
JULY 1, 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
Net Income (Loss)
For the Year Ended
June 30, 2002                                          (27,106)   (27,106)
                   ---------    ---    ----------  -----------   --------
BALANCES AT
JUNE 30, 2002      1,242,394    $12    $1,444,070  $(1,419,646)  $ 24,436
                   =========    ===    ==========  ===========   ========
















See accompanying summary of accounting policies and notes to the financial
statements.
                                                             Page 3 of 9



                          DAINE INDUSTRIES, INC.
                         STATEMENTS OF OPERATIONS




                                         For The Years Ended June 30,
                                        2002         2001         2000
                                     ----------   ----------   ----------

  Interest Income                    $      711   $    3,417   $    4,438

  General and Administrative
    Expenses                            (26,895)     (29,922)     (28,418)

  Depreciation and Amortization
    Expense                                 -0-          -0-       (8,662)
                                     ----------   ----------   ----------
INCOME (LOSS) BEFORE INCOME TAXES       (26,184)     (26,505)     (32,642)

  Income Tax Expense (Benefit)              922        2,719         (120)
                                     ----------   ----------   ----------
INCOME (LOSS)                        $  (27,106)  $  (29,224)  $  (32,522)
                                     ==========   ==========   ==========


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

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 9



                          DAINE INDUSTRIES, INC.
                         STATEMENTS OF CASH FLOWS


                                            For The Years Ended June 30,
                                            2002        2001        2000
                                         ---------   ---------   ---------

CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income (Loss)                      $(27,106)   $(29,224)   $(32,522)
  Adjustment to Reconcile Net Income
    to Net Cash Provided By (Used In)
    Operating Activities:
      Depreciation and Amortization
        Expense                               -0-         -0-       8,662
      Change in Assets and Liabilities:
        Increase (Decrease) in Accounts
          Payable and Accrued Expenses        -0-      (1,500)       (500)
                                         --------    --------    --------

  Net Cash Provided By (Used In)
      Operating Activities                (27,106)    (30,724)    (24,360)
                                         --------    --------    --------

     Net Increase (Decrease) in Cash and
       Cash Equivalents                   (27,106)    (30,724)    (24,360)

     Cash and Cash Equivalents at
       Beginning of Period                 56,042      86,766     111,126
                                         --------    --------    --------

CASH AND CASH EQUIVALENTS AT
     END OF PERIOD                       $ 28,936    $ 56,042    $ 86,766
                                         ========    ========    ========


Supplemental Disclosures of Cash Flow Information:
     Cash Paid During the Year for:
          Interest                       $    -0-    $    -0-    $    -0-
          Income Taxes                   $    922    $  2,719    $    501










See accompanying summary of accounting policies and notes to the financial
statements.
                                                             Page 5 of 9



                          DAINE INDUSTRIES, INC.
                   NOTES TO THE FINANCIAL STATEMENTS
           FOR THE YEARS ENDED JUNE 30, 2002, 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 was the manufacture and assembly of electrical
         wiring devices, cord sets and sockets.  LKC's customers consisted
         of manufacturers of lamps, chandeliers, Christmas and Halloween
         illuminated decorations, novelties, point of purchase displays,
         signs, and other electrical specialties.

         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

         CASH AND CASH EQUIVALENTS

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

         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.













                                                             Page 6 of 9



                          DAINE INDUSTRIES, INC.
                    NOTES TO THE FINANCIAL STATEMENTS
            FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                             (Continued)


         ESTIMATES IN FINANCIAL STATEMENTS

         The preparation of financial statements in conformity with U.S.
         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.

         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.











                                                             Page 7 of 9



                          DAINE INDUSTRIES, INC.
                   NOTES TO THE FINANCIAL STATEMENTS
           FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                              (Continued)


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, 2002 and 2001 is
         principally due to state and local income taxes based upon
         capital.
                                                   June 30,
                                           2002      2001      2000
                                          -------   -------   -------
           Current tax expense (benefit):
             Income tax at
              statutory rates             $   922   $ 2,719   $   -0-
             Other differences                -0-       -0-      (120)
                                          -------   -------   -------
           Total Tax Expenses
             (Benefit)                    $   922   $ 2,719   $  (120)
                                          =======   =======   ========

         The tax effect of significant temporary differences, which
         comprise the deferred tax assets and liabilities are as follows:

                                               June 30,
                                           2002        2001
                                        ---------   ---------
           Deferred tax asset:
             Operating loss
             carryback                   $ 52,200   $ 44,000
             Valuation allowance          (52,200)   (44,000)
                                         --------   --------
           Net deferred tax asset        $    -0-   $    -0-
                                         ========   ========

         The Company has net operating loss (NOL) carryforwards for income
         tax purposes of approximately $143,600.  This loss is allowed to
         be offset against future income until the year 2022 when the
         NOL's will expire.  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.
                                                             Page 8 of 9



                          DAINE INDUSTRIES, INC.
                   NOTES TO THE FINANCIAL STATEMENTS
            FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                               (Continued)


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.

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.  Accordingly, there has been no accrual
         for a contingent liability in these financial statements.


























                                                             Page 9 of 9