SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-8161
DIONICS, INC.
(Exact name of Small Business Issuer as Specified 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 Executive Offices)
(516) 997-7474
(Issuer's Telephone Number, Including Area Code)
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
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
Common, $.01 par value per share: 3,683,678
outstanding as of November 1, 1998
(excluding 164,544 treasury shares).
<PAGE>
PART I - FINANCIAL INFORMATION
DIONICS, INC.
Index to Financial Information
Period Ended September 30, 1998
Item Page Herein
Item 1 - Financial Statements:
Introductory Comments 3
Condensed Balance Sheet 4
Condensed Statement of Operations 6
Statement of Cash Flows 8
Notes to Financial Statements 9
Item 2 - Management's Discussion and
Analysis or Plan of Operation 15
<PAGE>
DIONICS, INC.
September 30, 1998
The financial information herein is unaudited. However, in the
opinion of management, such information reflects all adjustments
(consisting only of normal recurring accruals) necessary to a fair
presentation of the results of operations for the periods being reported.
Additionally, it should be noted that the accompanying condensed financial
statements do not purport to be complete disclosures in conformity with
generally accepted accounting principles.
The results of operations for the nine months ended September 30,
1998 are not necessarily indicative of the results of operations for the
full fiscal year ending December 31, 1998.
These condensed statements should be read in conjunction with the
Company's financial statements for the year ended December 31, 1997.
<PAGE>
DIONICS, INC.
CONDENSED BALANCE SHEET
SEPTEMBER 30, DECEMBER 31,
1998 1997
(UNAUDITED) (UNAUDITED)
A S S E T S
CURRENT ASSETS:
Cash $ 472,800 $ 473,400
Accounts Receivable - Trade
(Less Estimated Doubtful
Accounts of $10,000 in 1998
and $10,000 in 1997)
- Note 2 274,200 192,300
Inventory - Notes 2 and 3 420,500 359,500
Prepaid Expenses and Other
Current Assets 29,200 25,400
Total Current Assets 1,196,700 1,050,600
PROPERTY, PLANT AND EQUIPMENT
- Note 2
(At Cost Less Accumulated
Depreciation of $1,641,800
in 1998 and $1,636,100 in 1997) 50,500 50,200
DEPOSITS AND OTHER ASSETS 18,700 20,200
Total $1,265,900 $1,121,000
<PAGE>
DIONICS, INC.
CONDENSED BALANCE SHEET
SEPTEMBER 30, DECEMBER 31,
1998 1997
(UNAUDITED) (UNAUDITED)
L I A B I L I T I E S
CURRENT LIABILITIES:
Current Portion of Long-Term
Debt - (Note 2) $ 410,000 $ 26,700
Accounts Payable 56,800 54,400
Accrued Expenses 48,400 57,200
Deferred Compensation Payable -
Current (Note 4) 275,000 50,000
Total Current Liabilities 790,200 188,300
Deferred Compensation Payable -
(Note 4) 276,000 453,000
Long-Term Debt Less Current
Maturities - (Note 5) 398,700 802,900
Total Liabilities 1,464,900 1,444,200
CONTINGENCIES AND COMMENTS
SHAREHOLDERS' EQUITY
Common Shares - $.01 Par Value
Authorized 5,000,000 Shares
Issued 3,848,222 Shares in
1998 and 3,848,222 in 1997 38,400 38,400
Additional Paid-in Capital 1,522,800 1,522,800
(Deficit) (1,536,700) (1,663,800)
24,500 (102,600)
Less: Treasury Stock at Cost
171,063 Shares in 1998 and
164,544 Shares in 1997 (223,500) (220,600)
Total Shareholders'
Equity (Deficit) (199,000) (323,200)
Total $1,265,900 $1,121,000
<PAGE>
DIONICS, INC.
CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED
SEPTEMBER 30,
1998 1997
(UNAUDITED) (UNAUDITED)
SALES $ 523,900 $ 450,000
COST AND EXPENSES:
Cost of Sales (Including
Research and Development Costs) 342,800 308,700
Selling, General and
Administrative Expenses 91,000 78,700
Total Costs and Expenses 433,800 387,400
NET INCOME FROM OPERATIONS 90,100 62,600
DIVIDENDS AND OTHER INCOME 6,100 3,000
96,200 65,600
OTHER DEDUCTIONS
Interest Expense 17,300 18,200
NET INCOME FOR THE PERIOD $ 78,900 $ 47,400
NET INCOME PER SHARE -
Basic $ .0215 $ .0129
Diluted $ .0213 $ .0126
Average Number of Shares
Outstanding Used in
Computation of Per Share
Income - Basic 3,677,159 3,683,678
Diluted 3,708,183 3,751,860
<PAGE>
DIONICS, INC.
CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
(UNAUDITED) (UNAUDITED)
SALES $1,388,400 $1,379,600
COST AND EXPENSES:
Cost of Sales (Including Research
and Development Costs) 951,900 946,500
Selling, General and
Administrative Expenses 272,500 254,400
Total Costs and Expenses 1,224,400 1,200,900
NET INCOME FROM OPERATIONS 164,000 178,700
DIVIDENDS AND OTHER INCOME 15,000 7,200
179,000 185,900
OTHER DEDUCTIONS:
Interest Expense 51,900 54,700
NET INCOME FOR THE PERIOD $ 127,100 $ 131,200
NET INCOME PER SHARE -
Basic $ .0346 $ .0356
Diluted $ .0341 $ .0350
Average Number of Shares
Outstanding Used in Computation
of Per Share Income Basic 3,677,159 3,683,678
Fully Diluted 3,723,480 3,751,860
<PAGE>
DIONICS, INC.
CONDENSED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 127,200 $ 131,200
Adjustment to Reconcile Net Income to
Net Cash Provided from Operating
Activities:
Depreciation and Amortization 5,800 9,300
Deferred Compensation and
Related Interest 47,800 45,100
Changes in Operating Assets
and Liabilities:
(Increase) Decrease in Accounts
Receivable (81,900) (8,600)
(Increase) Decrease in Inventory (61,000) 56,700
(Increase) Decrease in Prepaid
Expenses and Other Current Assets (3,800) 12,700
(Increase) Decrease in
Deposits and Other Assets 1,500 1,600
Increase (Decrease) in
Accounts Payable 2,400 (6,500)
Increase (Decrease) in
Accrued Expenses (8,700) (13,000)
Net Cash Provided from
Operating Activities 29,200 228,500
CASH FLOWS FROM
FINANCING ACTIVITIES:
Repayment of Debt (20,900) (21,300)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of Equipment (6,000) -0-
Purchase of Treasury Shares (2,900) -0-
NET (DECREASE) INCREASE IN CASH (600) 207,200
CASH - Beginning of Period 473,400 210,900
CASH - End of Period $472,800 $418,100
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 1 - BUSINESS:
The Company designs, manufactures and sells silicon semiconductor
electronic products, as individual discrete components, as multicomponent
integrated circuits and as multicomponent hybrid circuits.
The individual discrete components are predominantly transistors, diodes
and capacitors, intended for use in miniature circuit assemblies called
"hybrid microcircuits".
Due to the rapidly changing needs of the marketplace, there are continual
shifts in popularity among the various chip components offered by the
Company. Taken as a whole, the category of discrete chip components for
the hybrid circuit industry is one of the three main classes of products
offered by the Company.
A second main class of products offered by the Company is encapsulated,
assembled, integrated circuits for use in electronic digital display
functions.
The third main class of products offered by the Company is a range of
hybrid circuits that function as opto-isolated MOSFET drivers and custom
Solid State Relays.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
Assets, liabilities, revenues and expenses are recognized on the accrual
basis of accounting.
Cash and Cash Equivalents
The Company considers money market funds to be cash equivalents.
Merchandise Inventory
Inventory is stated at the lower of cost (which represents cost of
materials and manufacturing costs on a first-in, first-out basis) or
market.
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
Property, Plant and Equipment
Property, Plant and Equipment is stated at cost less accumulated
depreciation and amortization. Expenditures for renewals and improvements
that significantly extend the useful life of assets are capitalized for all
assets; depreciation is provided over the estimated useful lives of the
individual asset, using the straight- line method. The following asset
lives are in effect:
Machine and Equipment 8 Years
Testing Equipment 8 Years
Furniture and Fixtures 10 Years
Building Improvements 10 Years
Building 25 Years
Deferred Compensation Plan
Future payments required under a plan of deferred compensation adopted in
1987, as well as interest accrued thereon are being charged to operations
over the period of expected service.
Bad Debts
The Company maintains a constant allowance for doubtful accounts of
$10,000.
NOTE 3 - INVENTORY:
Inventories are stated at the lower of cost (which represents cost of
materials and manufacturing costs on a first-in, first-out basis) or
market, and are comprised of the following:
September 30, December 31,
1998 1997
(Unaudited) (Unaudited)
Finished Goods $ 46,600 $ 39,900
Work-in-Process 226,700 193,700
Raw Materials 105,400 90,100
Manufacturing Supplies 41,800 35,800
Total $420,500 $359,500
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 4 - DEFERRED COMPENSATION PAYABLE:
In 1987 the company entered into an agreement, amended in 1997, which calls
for payments to its chief executive officer upon his reaching the age of
65, provided that he has not voluntarily terminated his employment prior to
that event. Such agreement further provides that in the event of death or
termination of employment of the officer prior to age 65, such payments are
to commence during the month subsequent to such event. Assuming his
continuous employment until age 65, the terms of the agreement call for the
executive to receive $25,000 per month for the 12-month period from
November 1, 1998 to October 31, 1999 and $6,666,66 per month for the
following 60 consecutive months.
Other than a Life Insurance policy to cover death benefits, the Company has
no designated funds to meet these requirements. In view of its
indebtedness and need for operating capital, there can be no assurance that
the company will be able to satisfy the terms of this agreement, in full or
in part. Should such circumstances occur, the terms of the agreement may
have to be renegotiated to better match the Company's then-current
financial circumstances. Although there can be no assurance of the
following, the Company believes that if such renegotiation becomes
necessary it will be able to agree on terms acceptable to both parties.
The above-mentioned Life Insurance policy had a cash surrender value at
12/31/97 of approximately $1,700 which is included in other assets.
NOTE 5 - LOANS PAYABLE - CADLE COMPANY:
Effective February 29, 1994, the Company and Apple Bank for Savings (the
"Bank") entered into a restructuring Agreement, whereby the Bank agreed to
forgive a portion of existing indebtedness of the Company and to
restructure the balance. In October 1988, the Company had obtained from
the Bank a Commercial Equity Line in the original principal amount of $1
million (the "Original Mortgage") and in 1990 the Company had obtained
certain other asset-based loans from the bank in the principal amount of
$283,850 (the "1990 Loans").
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 5 - LOANS PAYABLE - CADLE COMPANY: (Continued)
Pursuant to the Restructuring Agreement:
A. The bank has forgiven $376,146.59 of accrued and unpaid interest
stemming from the Original Mortgage and the 1990 Loans.
B. The 1990 Loans have been 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, the Company will pay interest only at an
annual rate of 6.0 percent. Of that amount, only one-third (2.0 percent)
will be paid monthly, with the remainder accruing and becoming part of
unpaid principal at the end of that period. During the second five-year
period, the balance due will be paid over 60 equal monthly installments,
plus interest at Prime plus two percent.
C. The remaining balance of $750,000 outstanding on the Original Mortgage
Loan has been replaced by a new $415,000 Mortgage Loan plus two additional
Term Loans of $167,500 each. These are treated as follows:
The new $415,000 Mortgage Loan ("Mortgage Loan B") has a five-year term and
bears interest at of 7.5 percent. For the first two years of Mortgage Loan
B, the Company is obligated to pay interest only, on a monthly basis.
Thereafter, monthly payments will include interest plus the amount of
$1,921.30, which began in April 1996, towards reduction of debt. At the
end of the five-year period, the then-remaining principal ($347,754.50)
will be due.
The first new Term Loan ("Term Loan C") stemming from the Original
Mortgage has a face amount of $167,500 and carries the same interest rate
and payment terms over two five-year periods as the new $283,850 Term Loan
A described in Paragraph B above.
The second new Term Loan ("Term Loan D") stemming from the Original
Mortgage also has a face amount of $167,500, but carries an annual interest
rate of 4.0 percent, none of which is payable during the initial five-year
period. This interest will accrue and will be added to the principal at
the end of the first five-year period. The new total balance due will be
repaid over the second five-year period with 60 equal monthly installments
plus interest of Prime plus two percent.
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 5 - LOANS PAYABLE - CADLE COMPANY - (Continued)
D. Term Loans A and C also carry convertibility rights under which the Bank
may, at its sole discretion, exchange debt for Common Stock in the Company
at the price of (I) $.75 per share until May 31, 1995, (ii) $1.00 per share
from June 1, 1995 until January 31, 1997, and (iii) $1.25 per share from
February 1, 1997 until expiration, provided, however, that the aggregate
number of shares that the Bank may acquire will not exceed 15 percent of
the number of then outstanding shares of the Company's Common Stock,
subject to certain anti-dilution rights. These convertibility rights
expire upon the payment-in-full of the balance due on Mortgage Loan B, due
to mature on the Interim Maturity Date which will occur in March 1999.
E. Having met, in 1994 and 1995, certain particular financial
performance standards as called for in the January 31, 1994 Debt
Restructuring Agreement, the Company has qualified in full for the
Forgiveness of specific elements of its debt. While according to the terms
of the Agreement, the actual forgiveness is due to be formally granted on
"the interim Maturity Date" which will occur in March 1999, the Company
has, in the interests of more accurately describing its over-all debt
situation, decided to adopt those changes in its current and future
reports. The forgiveness will cover all of the principal and accrued
interest on Term Loan D and all of the accrued interest on both Term Loans
A and C, as more fully described in the above-referenced Debt Restructuring
Agreement.
All the Company's Assets are pledged to the foregoing loans.
In September 1994, the Company was advised that the foregoing loans were
purchased from the Bank by D.A.N. Joint Venture, a Limited Partnership, an
affiliate of the Cadle Company.
NOTE 6 - STOCK OPTION PLAN
In September 1997, the Board of Directors of the Company adopted the 1997
Incentive Stock Option Plan (the "1997 Plan") for employees of the Company
to purchase up to 250,000 shares of common Stock of the Company. Options
granted under the 1997 plan are "incentive stock options" as defined in
Section 422 of the Internal Revenue Code. Any stock options granted under
the 1997 Plan shall be granted at no less than 100% of the fair market
value of the Common Stock of the Company at the time of the grant. As of
September 30, 1998, options to acquire 120,000 shares of Common Stock have
been granted under the 1997 Plan. All of such options were granted on
September 11, 1997 and have an exercise price of $.38 per share. As of
September 30, 1998, 130,000 options were available for future grant. The
1997 Plan is subject to obtaining stockholder approval within twelve months
of the adoption of the 1997 Plan. The plan has been approved at September
30, 1998.
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 7 - INCOME TAXES:
As of December 31, 1997 the Company had a federal operating loss carry
forward of $865,600. This net operating loss originated in 1989 through
1992 and may be carried forward and expires as follows:
Year of Origin Amount Carry Forward
Expires In
1990 $566,800 2005
1991 65,600 2006
1992 233,200 2007
$865,600
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
A. LIQUIDITY AND CAPITAL RESOURCES
After many years of steadily reducing its losses, the Company finally
crossed into increasing profitability for the full-years 1996 and 1997. In
the First Quarter of 1998, however, the Company briefly showed a loss
again, at which time it was found necessary to shift certain mid-management
assignments in order to gain more aggressive pursuit of the Company's
numerous growth opportunities. The temporary "growing pains" were overcome
by those reassignments and were soon followed by a strong rebound to
profitability in both the Second and Third Quarters of 1998.
The Company had earlier achieved significant easing of its debt
obligations through a favorable restructuring of Bank debt in January of
1994. That new Agreement, however, called for a large (almost $350,000)
"balloon" payment on its Mortgage Note plus the commencement of payments on
two other Notes, all early in 1999. The Company fortunately has already
accumulated the required funds for the balloon payment, resulting from its
recently profitable and cash-flow-positive operations, but the fact that
this payment is due within twelve-months of this report means that such
amount must be included under Current Liabilities on the Balance Sheet.
Also now included in Current Liabilities are a number of payments under the
Company's Deferred Compensation Agreement with its Chief Executive Officer.
The combined effects of all the above debt obligations increases Current
Liabilities to $790,200 from the $188,300 which showed at December 31,
1997. Total Liabilities, however, have only increased $20,700 in the same
period of time. While the Company's present cash position is enough to
cover the Bank debt payment that is due in early 1999, the Deferred
Compensation Agreement may not be adequately funded. In such case, the
terms of the present agreement may have to be renegotiated to better match
the then-current financial condition of the Company. Due to the above
obligations, the Company's ratio of Current Assets to Current Liabilities
has dropped to 1.51:1. If Deferred Compensation is entirely removed from
the calculation, the Current Ratio would drop to only 2.32:1, although no
assurance can be given that such will be the result of any renegotiation.
Management has also continued its search for additional Working
Capital to provide further growth momentum for the Company. Contacts with
potential lenders or investors are always in some state of motion, but no
assurance can be given of any positive outcome. At the time of this writing
early in November of 1998, the Company has successfully negotiated with and
received a Letter of Commitment from a prospective lender, regarding a
refinancing of the above-referenced Mortgage Note in an amount of $385,000.
If successfully completed, this transaction will provide the funds needed
to make the balloon payment referred to earlier, but would, for a limited
time, require a reduction on the Deferred Compensation payments. Since
there are still several hurdles to be overcome, it would be premature at
this time to assume that there will be a successful completion of this
refinancing, although Management is encouraged regarding those prospects.
Meanwhile, the Company is well able to support its ongoing operations.
Working Capital has, however, dropped to $406,500, down from $862,300 at
December 31, 1997 as a direct result of the previously described large
shift forward in Current Liabilities.
B. RESULTS OF OPERATIONS
Sales in the Third Quarter of 1998 rose 16.4 percent over the same
period last year, reaching $523,900 in the current period as compared to
$450,000 in the Third Quarter of 1997 and $419,800 in the Third Quarter of
1996. Most of the increase occurred in the Company's core-technology
products based on micro-photovoltaics, and also traced partly to a First
Quarter shift toward a more aggressive middle-management team.
Gross Profit in the Third Quarter of 1998 was 34.5 percent of sales,
as compared to 31.4 percent in the same period last year and 29 percent in
the Third Quarter of 1996. These improvements represent steady progress
based on moderately increased sales volume as against many items of
relatively fixed costs.
Selling, General and Administrative costs for the Third Quarter of
1998 were 17.4 percent of sales, relatively unchanged from the same period
last year and down very slightly from the 18.1 percent recorded in the
Third Quarter of 1996.
Net Income for the Third Quarter of 1998 rose 66.5 percent to $78,900,
up from $47,400 in the same period last year and $28,700 in the Third
Quarter of 1996.
For the Nine-Months of 1998, total sales volume reached $1,388,400,
essentially matching the $1,379,600 level of the same period last year, but
well up from $1,104,600 for the Nine-Months of 1996. By matching the 1997
Nine-Month sales total, the Company fully recovered from its First Quarter
1998 slip, caused by the temporary "growing pains" cited earlier.
In terms of Net Income for the Nine-Months of 1998, the Company
essentially matched the level achieved in the same period last year, with
$127,100 in the current period and $131,200 in the Nine-Months of 1997.
These compare favorably to the $26,700 in the same period of 1996.
Addressing its bigger, long-term picture, the Company has made great
strides in dealing with its debt situation as well as its need for
currently profitable operations. The debt picture has now entered a new
phase in which, in the next several months, significant repayment
obligations come to the surface. The Company has already put into reserves
enough cash to make the required "balloon" payment on its real-estate
Mortgage Note when that becomes due, but Management has continued to search
for refinancing opportunities on more favorable terms. As described
earlier, the Company has already received a Letter of Commitment from a
prospective lender and is hopeful of successfully closing on this
refinancing before the end of the year. Although certain issues still
remain to be addressed, and thus no assurance can yet be given concerning a
successful outcome, Management is encouraged to believe that such will be
the case. Even if a refinancing does not materialize, the Company expects
to be able to continue supporting its ongoing operations from internally
generated cash flow.
Beyond its debt situation, the Company currently has a significant
order-backlog for core-technology products which should support continuing
growth in sales. There is particularly encouraging evidence for growth
within the Company's patented micro-photovoltaic product lines and their
markets. These include Solid State Relays used in computer-controlled
flight-control systems aboard the AIRBUS aircraft, as well as rapidly
growing use of MOSFET-drivers for certain segments of the medical-
electronics field. Looking back at the recovery the Company has made in
recent years, and the build-up in momentum, there is much reason for
optimism that Management's goal of continued increases in sales and profits
will be met. As always, risks of failure or at least disappointment
persist, but the Company is stronger now and is well back from the brink it
once fought so desperately and successfully to avoid.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote
of Security-Holders
Pursuant to a Consent Statement dated August 13, 1998, the
Registrant solicited written consents of its stockholders with
respect to the Registrant's 1997 Incentive Stock Option Plan.
The Consent Statement provided that written consents would be
tabulated on September 10, 1998. On such date, such tabulations,
which resulted in the approval and adoption of the Registrant's
1997 Incentive Stock Option Plan, were as follows: 2,342,652
affirmative votes, 37,942 negative votes and 22,450 votes
abstained.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. There are no exhibits applicable to this Form 10-
QSB.
(b) Reports on Form 8-K. Listed below are Current Reports on
Form 8-K filed by the Registrant during the fiscal quarter
ended September 30, 1998:
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DIONICS, INC.
(Registrant)
Dated: November 10, 1998 By: /s/Bernard Kravitz
Bernard Kravitz,
President
Dated: November 10, 1998 By: /s/Bernard Kravitz
Bernard Kravitz,
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM DIONICS, INC.'S QUARTERLY REPORT FOR THE QUARTER ENDED SEPTEMBER 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 472,800
<SECURITIES> 0
<RECEIVABLES> 274,200
<ALLOWANCES> 0
<INVENTORY> 420,500
<CURRENT-ASSETS> 1,196,700
<PP&E> 1,692,300
<DEPRECIATION> 1,641,800
<TOTAL-ASSETS> 1,265,900
<CURRENT-LIABILITIES> 790,200
<BONDS> 674,700
<COMMON> 38,400
0
0
<OTHER-SE> 1,522,800
<TOTAL-LIABILITY-AND-EQUITY> 1,265,900
<SALES> 1,388,400
<TOTAL-REVENUES> 1,388,400
<CGS> 951,900
<TOTAL-COSTS> 1,224,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,900
<INCOME-PRETAX> 127,100
<INCOME-TAX> 0
<INCOME-CONTINUING> 127,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127,100
<EPS-PRIMARY> .035
<EPS-DILUTED> .034
</TABLE>
