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<SEC-DOCUMENT>0000910680-05-000617.txt : 20051021
<SEC-HEADER>0000910680-05-000617.hdr.sgml : 20051021
<ACCEPTANCE-DATETIME>20051021124943
ACCESSION NUMBER:		0000910680-05-000617
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20051118
FILED AS OF DATE:		20051021
DATE AS OF CHANGE:		20051021
EFFECTIVENESS DATE:		20051021

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DRYCLEAN USA INC
		CENTRAL INDEX KEY:			0000065312
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE & TELEGRAPH APPARATUS [3661]
		IRS NUMBER:				112014231
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14757
		FILM NUMBER:		051149083

	BUSINESS ADDRESS:	
		STREET 1:		290 NE 68 STREET
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33138
		BUSINESS PHONE:		3057544551

	MAIL ADDRESS:	
		STREET 1:		290 NE 68 STREET
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33138

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	METRO TEL CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>def14a111805.txt
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>

                            SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a party other than the Registrant [_]

Check the appropriate box:

[_]  Preliminary Proxy Statement
[_]  Confidential,  for  Use  of the  Commission  Only  (as  permitted  by  Rule
     14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials
[_]  Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

                               DRYCLEAN USA, Inc.
                               ------------------
                (Name of Registrant as Specified in Its Charter)

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  No fee required

[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

          1)   Title of each class of securities to which transaction applies:

          2)   Aggregate number of securities to which transaction applies:

          3)   Per unit price or other underlying value of transaction  computed
               pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
               the filing fee is calculated and state how it was determined):

          4)   Proposed maximum aggregate value of transaction:

          5)   Total fee paid:

[_]  Fee paid previously with preliminary materials.

[_]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

     1)   Amount Previously Paid:

     2)   Form, Schedule or Registration Statement No.:

     3)   Filing Party:

     4)   Date Filed:

<PAGE>

                               DRYCLEAN USA, INC.
                              290 N.E. 68TH STREET
                              MIAMI, FLORIDA 33138

                                 --------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON NOVEMBER 18, 2005

                                 --------------

                                                                  Miami, Florida
                                                                October 21, 2005

To the Stockholders of
DRYCLEAN USA, Inc.:

     NOTICE IS HEREBY  GIVEN that the 2005  Annual  Meeting of  Stockholders  of
DRYCLEAN USA,  Inc., a Delaware  corporation  (the  "Company"),  will be held on
Friday,  November 18, 2005, at 11:00 A.M., Eastern standard time, at the offices
of the Company and the Company's  subsidiary,  Steiner-Atlantic  Corp., 290 N.E.
68th Street,  Miami, Florida, for the purpose of considering and acting upon the
following matters:

     (1) The  election  of seven (7)  directors  to serve  until the next annual
meeting  of  stockholders  and until the  election  and  qualification  of their
respective successors; and

     (2) The  transaction  of such other  business  as may  properly  be brought
before the meeting or any adjournments or postponements thereof.

     The Board of Directors  has fixed the close of business on October 10, 2005
as the record date for the determination of stockholders  entitled to notice of,
and to vote at, the meeting.

                                  By Order of the Board of Directors,

                                  Lloyd Frank,
                                    Secretary

THE RETURN OF YOUR SIGNED PROXY AS PROMPTLY AS POSSIBLE WILL GREATLY  FACILITATE
ARRANGEMENTS FOR THE MEETING. NO POSTAGE IS REQUIRED IF THE PROXY IS RETURNED IN
THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.


<PAGE>

                               DRYCLEAN USA, INC.
                              290 N.E. 68TH STREET
                              MIAMI, FLORIDA 33138

                                ----------------

                                 PROXY STATEMENT
                       FOR ANNUAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON NOVEMBER 18, 2005

                                ----------------

                                  INTRODUCTION

     This Proxy Statement,  to be mailed to stockholders on or about October 21,
2005, is furnished in connection with the solicitation by the Board of Directors
of DRYCLEAN USA, Inc., a Delaware corporation (the "Company"), of proxies in the
accompanying  form (the "Proxy" or "Proxies") for use at the 2005 Annual Meeting
of Stockholders  of the Company (the  "Meeting") to be held on Friday,  November
18, 2005, and at any adjournments or postponements  thereof. The Meeting will be
held at the place and time stated in the notice attached hereto.

     All Proxies  properly and timely  received will be voted in accordance with
the specifications made thereon or, in the absence of any specification, for the
election of all of the nominees  named herein to serve as  directors.  Any Proxy
given  pursuant  to this  solicitation  may be revoked  by the person  giving it
provided  such notice or new proxy is received  before the vote by (i) notice in
writing or by a later  dated  proxy  received  by the  Company at 290 N.E.  68th
Street, Miami, Florida 33138, Attention:  President, or (ii) by voting in person
at the Meeting.

     Only holders of record of the Company's  Common Stock (the "Common  Stock")
as of the close of business on October 10, 2005 (the "Record Date") are entitled
to notice of, and to vote at, the Meeting or any  adjournments or  postponements
thereof for which a new record date is not fixed. As of the close of business on
the Record Date,  there were issued and outstanding  7,024,450  shares of Common
Stock.  Stockholders whose Common Stock is held in "street name" (that is, whose
shares are held by, and  registered  in the name of, a broker or other  nominee)
who  wish to vote at the  Meeting  will  need to  obtain a proxy  form  from the
institution  that holds their shares and follow the voting  instructions on that
form.

     The  presence,  in person or  represented  by proxy,  of a majority  of the
outstanding  Common  Stock  will  constitute  a quorum  for the  transaction  of
business at the Meeting. Brokers that are members of the New York Stock Exchange
have  discretion  to vote the shares of their  clients  that the broker holds in
street name for its  customers but as to which the broker has received no voting
direction from the beneficial  owner of the shares with respect to non-contested
elections of  directors  and certain  other  matters.  Brokers  are,  therefore,
expected to vote such shares on the election of directors.  If a broker, nominee
or other  fiduciary  holding shares in "street name" votes some, but not all, of
the shares held by it as record owned for one or more beneficial owner of shares
on one or more  matters,  the  shares  not  voted by it on a matter  are  called
"broker  non-votes."  Proxies  submitted  which  contain  abstentions  or broker
non-votes will be deemed present at the Meeting for  determining the presence of
a quorum.

     Each share of Common  Stock held as of the Record  Date is  entitled to one
vote on each matter to be acted upon at the  Meeting.  A plurality  of the votes
(that is, the seven persons  receiving the highest number of affirmative  votes)
of the  shares  present in person or  represented  by proxy at the  Meeting  and
entitled to vote on the election of directors  will be required for the election
of directors. Accordingly, shares as to which authority to vote is withheld from
Proxies and broker  non-

<PAGE>

votes  will  have no  effect  on the  outcome  of the  vote on the  election  of
directors.  While the  Company  knows of no matters  other than the  election of
directors  to  be  brought  before  the  Meeting  (see  "Miscellaneous  -  Other
Matters"),  if any other matters are brought before the Meeting,  under Delaware
law approval thereof will require the affirmative  vote of either  (depending on
the nature of the  matter) a majority of the Common  Stock  present in person or
represented  by proxy at the Meeting and entitled to vote on the subject  matter
or a majority of all outstanding  shares of Common Stock.  Abstentions will have
the effect of a negative vote on all such matters. Broker non-votes will have no
effect on the outcome of the vote on a matter  requiring  approval by a majority
of those entitled to vote on the matter,  but will have the effect of a negative
vote on any matter requiring approval by a majority of all outstanding shares of
Common Stock.

                         OWNERSHIP OF CERTAIN BENEFICIAL

                              OWNERS AND MANAGEMENT

     The following table sets forth information,  as at September 30, 2005, with
respect to the shares of Common  Stock  that are  beneficially  owned by (i) any
person  (including any "group," as that term is used in Section  13(d)(3) of the
Securities  Exchange  Act  of  1934)  who is  known  to  the  Company  to be the
beneficial owner of more than five percent of the Company's  outstanding  Common
Stock,  (ii)  the  executive  officers  of the  Company  named  in  the  Summary
Compensation Table under the caption "Executive Compensation," below, (iii) each
director  and  nominee  to  serve  as a  director  of the  Company  and (iv) all
executive officers and directors of the Company as a group:

<TABLE>
<CAPTION>
                                                     AMOUNT AND
                                                     NATURE OF
                                                     BENEFICIAL                  PERCENT
         BENEFICIAL OWNER                            OWNERSHIP (1)              OF CLASS (2)
         ----------------                            -------------              ------------
<S>                                                     <C>                         <C>
         William K. Steiner                             1,800,977                   25.6% (3)
         290 N.E. 68th Street
         Miami, FL  33138

         Michael S. Steiner                             1,760,577                   25.1% (3)
         290 N.E. 68th Street
         Miami, FL  33138

         Alan I. Greenstein                             1,013,200                   14.4% (3)
         290 N.E. 68th Street
         Miami, FL  33138

         Venerando Indelicato                             304,937 (4)                4.3%

         David Blyer                                       10,000 (5)                 *

         Lloyd Frank                                       34,119 (6)                 *

         Alan M. Grunspan                                  21,200 (7)                 *

         Stuart Wagner                                     15,000 (8)                 *

         Executive officers and                         4,960,010 (9)                 70.3%
         directors as a group
         (8 persons)
</TABLE>

- ---------------------------
Footnotes appear on the following page.


                                      -2-
<PAGE>

(1)  Except as noted in the following  footnotes,  all beneficially owned shares
     are owned with sole voting and investment power.

(2)  Asterisk indicates less than one percent.

(3)  See   "Stockholders   Agreement,"   below,  for  information   regarding  a
     Stockholders  Agreement  entered into among William K. Steiner,  Michael S.
     Steiner and Alan I.  Greenstein  pursuant to which they have agreed to vote
     an aggregate  of  4,520,954  shares  (64.4%) of the  Company's  outstanding
     Common Stock for the election of those persons  designated  between them as
     the  directors  of the  Company.  As a  result,  and  giving  effect to the
     additional  shares  owned by each that are not subject to the  Stockholders
     Agreement,  Messrs.  William K.  Steiner,  Michael S.  Steiner  and Alan I.
     Greenstein may be deemed to be the beneficial owners of 4,561,454  (64.9%),
     4,521,054  (64.4%) and 4,534,154  (64.5%),  respectively,  of the Company's
     Common  Stock,  of which  40,500,  100 and 13,200  shares of the  Company's
     Common Stock, respectively, are held by them with sole voting power and, in
     each case,  4,520,954  shares are held with shared voting  power.  Each has
     sole dispositive power of all of the shares reflected as beneficially owned
     by him in the table.

(4)  Includes  (a) 163,718  shares  (2.3% of the  Company's  outstanding  Common
     Stock) owned by Mr. Indelicato and his wife as co-trustees under his living
     trust under which the sole lifetime  beneficiary is Mr.  Indelicato and (b)
     141,219  shares (2.0% of the Company's  outstanding  Common Stock) owned by
     Mr.  Indelicato and his wife as  co-trustees  under the living trust of Mr.
     Indelicato's  wife  under  which  the  sole  lifetime  beneficiary  is  Mr.
     Indelicato's  wife. Mr. Indelicato  disclaims  beneficial  ownership of the
     shares owned by his wife's living trust.

(5)  Represents  shares  which are not  outstanding  but which  are  subject  to
     issuance upon the exercise of a stock option that is presently  exercisable
     in full.

(6)  Includes  21,494  shares owned by Mr.  Frank's  wife, as to which Mr. Frank
     disclaims beneficial ownership.

(7)  Includes  10,000 shares which are not  outstanding but which are subject to
     issuance upon the exercise of a stock option that is presently  exercisable
     in full.

(8)  Represents  (a) 5,000 shares owned by Mr.  Wagner's  wife,  as to which Mr.
     Wagner disclaims beneficial ownership,  and (b) 10,000 shares which are not
     outstanding  but which are subject to issuance upon the exercise of a stock
     option that is presently exercisable in full.

(9)  Includes (a) 26,494 shares owned by spouses of directors,  as to which such
     directors disclaim  beneficial  ownership,  and (b) 30,000 shares which are
     not  outstanding  but which are  subject to issuance  upon the  exercise of
     stock options that are presently exercisable in full.

STOCKHOLDERS AGREEMENT

     William K. Steiner,  Michael S. Steiner and Alan I. Grunspan are parties to
a Stockholders  Agreement,  dated July 22, 2004 (the "Stockholders  Agreement"),
pursuant  to  which  William  K.  and  Michael  S.  Steiner  (together  with any
transferees to whom either of them transfers  Shares,  as defined below,  to the
extent  of  the  Shares  so  transferred,   collectively,  the  "Steiner  Family
Stockholders")  and Mr.  Greenstein  (together  with any  transferee  to whom he
transfers Shares, to the extent of the Shares so transferred,  collectively, the
"Greenstein  Stockholders")  have agreed,  except to the extent otherwise agreed
from time to time by (a) the  holders  of a majority  of the Shares  held by the
Greenstein  Stockholders and (b) the holders of a majority of the Shares held by
the Steiner Family Stockholders, to vote the 1,760,477,  1,760,477 and 1,000,000
shares of the  Company's  Common  Stock  currently  own of record by  William K.
Steiner, Michael S. Steiner and Mr. Greenstein,

                                      -3-
<PAGE>

respectively  (collectively the "Shares"),  to elect as directors of the Company
(x) one  designee  as may be selected by the holders of a majority of the Shares
held by the  Greenstein  Stockholders  and (y) such  other  designees  as may be
selected by the  holders of a majority of the Shares held by the Steiner  Family
Stockholders.  Should any designee of the Greenstein Stockholders or the Steiner
Family Stockholders  resign,  determine not to seek re-election to the Company's
Board of  Directors,  be removed  from  office,  die,  become  incapacitated  or
otherwise cease to serve on the Board,  and should such designee not be replaced
by the Board with the a  designee  recommended  to the Board by the  stockholder
group who designated the director being replaced, or should such designee's term
of office expire, the parties to the Stockholders Agreement are to take all such
action as may be permitted under the Company's  Certificate of  Incorporation or
By-laws and laws of its state of  incorporation  to  promptly  call a special or
other  meeting of  stockholders  of the Company  and vote,  or execute a written
consent,  to elect as the successor to such former director a person  designated
by the holders of a majority of the Shares held by the  stockholder  group whose
designee is to be replaced.  The  Stockholders  Agreement is to terminate on the
earliest  to occur of (i) the date  agreed to in writing by the owners of record
of a  majority  of the  Shares and (ii) the  liquidation  of the  Company or the
Company's merger with, or sale of substantially all of its assets to, or another
change in control  transaction  with,  another  entity  that is  approved by the
Board, following which transaction or series of transactions the stockholders of
the Company  immediately prior to the first of such transactions do not own more
than  50%  of the  outstanding  voting  power  of the  resulting  entity  at the
effective date of the last of such transactions.  The slate of nominees proposed
in this Proxy Statement to serve as directors was approved by each of William K.
Steiner, Michael S. Steiner and Alan I. Greenstein.

                              ELECTION OF DIRECTORS

     Unless otherwise  directed,  the persons named in the enclosed Proxy intend
to cast all votes  pursuant  to Proxies  received  for the  election  of Messrs.
Michael S. Steiner,  William K. Steiner,  Venerando J. Indelicato,  David Blyer,
Lloyd Frank,  Alan M. Grunspan and Stuart Wagner (said persons being hereinafter
referred  to as the  "nominees")  as  directors  upon  their  nomination  at the
Meeting.  Directors  elected at the  Meeting  will serve  until the next  Annual
Meeting of Stockholders  and until their  respective  successors are elected and
qualified.  All nominees  were elected by  stockholders  at the  Company's  2004
Annual Meeting of Stockholders.

     In the event that any of the nominees should become unavailable to serve as
a director for any reason, the holders of Proxies have  discretionary  authority
to vote for one or more alternate nominees who may be designated by the Board of
Directors.  The Company believes that all of the nominees are available to serve
as directors.

BACKGROUND OF NOMINEES

     Michael S. Steiner,  49, has been President,  Chief Executive Officer and a
director of the Company since  November  1998 and President and Chief  Executive
Officer of Steiner-Atlantic Corp., a subsidiary of the Company ("Steiner") since
1988.

     William K.  Steiner,  75, has been  Chairman of the Board and a director of
the  Company  since  November  1998 and  Chairman of the Board and a director of
Steiner since he founded Steiner in 1960.

     Venerando  Indelicato,  72, was President of the Company from December 1967
until November 1998 and since that time has been  Treasurer and Chief  Financial
Officer of the Company.  Mr. Indelicato has been a director of the Company since
1967.

     David  Blyer,  45, has served as a director of the Company  since  November
1998. Mr. Blyer was Chief Executive  Officer and President of Vento Software,  a
developer of software for

                                      -4-
<PAGE>

specialized business  applications,  from 1994, when he co-founded that company,
until mid-2002. Since that time, Mr. Blyer has been an independent consultant.

     Lloyd Frank,  80, has been a director of the Company since 1977.  Mr. Frank
has been counsel to the law firm of Troutman Sanders LLP since April 2005. Prior
thereto, Mr. Frank was a member of Jenkens & Gilchrist Parker Chapin LLP and its
predecessor  from  1977  until  the end of 2003 and  counsel  to that  firm from
January 2004 until he joined Troutman Sanders LLP. The Company retained Troutman
Sanders LLP and Jenkens & Gilchrist  Parker Chapin LLP during the Company's last
fiscal year and is retaining  Troutman Sanders LLP during the Company's  current
fiscal year. Mr. Frank is also a director of Park Electrochemical Corp. and Volt
Information Sciences, Inc.

     Alan M.  Grunspan,  46, has served as a director of the  Company  since May
1999.  Since December  2004,  Mr.  Grunspan has been a member of the law firm of
Carlton  Fields  LLC.  Mr.  Grunspan  was a member  of the law  firm of  Kaufman
Dickstein & Grunspan, P.A. from 1989 until he joined Carlton Fields LLC.

     Stuart  Wagner,  74, has served as a director of the Company since November
1998.  Mr.  Wagner has been retired  since 2001.  From 1975 to 1997,  Mr. Wagner
served as President and Chief  Executive  Officer of Wagner  Products  Corp.,  a
manufacturer  and distributor of products in the HVAC industry,  a company which
he founded,  and served as a consultant to  Diversified  Corp.,  which  acquired
Wagner  Products  Corp.,  from 1997 until 2001. Mr. Wagner is also a director of
Watsco, Inc.

     Michael S.  Steiner is the son of  William K.  Steiner.  There are no other
family  relationships  among any of the directors and executive  officers of the
Company.  All directors serve until the next annual meeting of stockholders  and
until  the  election  and  qualification  of their  respective  successors.  All
officers serve at the pleasure of the Board of Directors.

DIRECTORS' INDEPENDENCE

     The Board of Directors has determined that David Blyer,  Lloyd Frank,  Alan
Grunspan and Stuart Wager  (constituting  a majority of the Board of  Directors)
are  "independent  directors"  pursuant  to Section  121A of the  standards  for
listing of the American  Stock  Exchange LLC  ("AMEX"),  on which the  Company's
Common Stock is listed.  In reaching its conclusion,  the Board  determined that
these  individuals  do not have a material  relationship  with the Company  that
would interfere with their exercise of independent judgment, and do not have any
of the specific  relationships  set forth in that Section that would  disqualify
them from being considered independent directors.

CONTROLLED COMPANY

     As a result of the  Stockholders  Agreement,  Messrs.  William K.  Steiner,
Michael S. Steiner and Alan I.  Greenstein  are a group with shared voting power
over an aggregate of 64.4% of the Company's Common Stock. They own an additional
..8% of the  Company's  Common  Stock  which is not  subject to the  Stockholders
Agreement.  Accordingly, the Company is a "controlled company" under the listing
standards  of AMEX.  Therefore,  the  Company  is not  subject  to AMEX's  rules
otherwise  requiring  companies  like the  Company to have a Board of  Directors
consisting of at least 50% "independent  directors," governing the determination
of executive compensation and governing the nomination of directors. The Company
has, however,  voluntarily complied with AMEX's minimum independent director and
executive compensation determination rules.

                                      -5-
<PAGE>

MEETINGS OF THE BOARD OF DIRECTORS

     During  the  Company's  fiscal  year  ended  June 30,  2004,  its  Board of
Directors  held  five  meetings.  Each  director  attended  at least  75% of the
meetings of the Board of Directors  and the  committees  on which he served that
were held during that fiscal year.

     It is the Company's  policy that,  absent  extenuating  circumstances,  all
members of the Board of Directors  attend meetings of  stockholders.  All of the
members of the Board attended the Company's 2004 Annual Meeting of  Stockholders
except William K. Steiner and Stuart Wagner.

COMMITTEES OF THE BOARD

     The Board of Directors has standing Audit and Compensation Committees.  The
Board does not have a standing Nominating Committee.

     The Board's Audit Committee consists of Alan M. Grunspan (Chairman),  David
Blyer  and  Stuart  Wagner.  The  Audit  Committee  provides  assistance  to the
Company's   Board   of   Directors   in   fulfilling   the   Board's   oversight
responsibilities.  The Audit Committee  operates under a written charter adopted
by the Board of Directors,  which the Committee annually reviews,  assesses and,
with respect to which,  if it deems it  appropriate,  recommends  changes to the
Board.  A copy of the  Audit  Committee's  charter  was  attached  to the  Proxy
Statement  used  in  connection  with  the  Company's  2004  Annual  Meeting  of
Stockholders.  Under its charter,  the Audit Committee  serves as an independent
and objective party to monitor the Company's financial and accounting  reporting
process and internal  control  system;  reviews and appraises  the  performance,
qualifications  and  independence  of the  Company's  independent  auditor;  and
provides  an open  avenue  of  communication  among  the  Company's  independent
auditor,  financial and senior management and the Board. Among other things, the
Audit Committee  reviews the financial  reports and other financial  information
provided  by the  Company to the  Securities  and  Exchange  Commission  and the
public; the Company's systems of internal control over financial reporting;  and
the Company's auditing,  accounting and financial reporting processes generally.
The Audit  Committee also is responsible  for the  appointment and retention of,
and  oversees  the work of, the  Company's  independent  auditor,  confirms  the
independence  of the  independent  auditor  and  approves  the  fees  and  other
compensation  to be paid to the  independent  auditors.  A report  of the  Audit
Committee  appears under the caption "Audit Committee  Report," below. The Audit
Committee held four meetings during the year ended June 30, 2005.

     The Board of Directors has concluded  that each of the members of the Audit
Committee is an  "independent  director" under Section 121A of the standards for
listing of the AMEX, as well as Rule 10A-3  promulgated  by the  Securities  and
Exchange  Commission (the "SEC") under the Securities  Exchange Act of 1934, and
is able to read and understand  fundamental  financial  statements,  including a
company's balance sheet, income statement and cash flow statement.  The Board of
Directors has concluded that Stuart Wagner, a member of the Audit Committee,  is
an "audit  committee  financial  expert,"  within the  meaning of Item 401(h) of
Regulation S-K promulgated by the SEC.

     The members of the Compensation  Committee are David Blyer, Lloyd Frank and
Stuart Wagner,  each of whom is an "independent  director" under Section 121A of
the AMEX listing standards for purposes of sitting on the Company's Compensation
Committee. This Committee determines the compensation of all executive officers,
administers  the  Company's  employee  stock  option plans  (including  granting
options),  approves changes in the Company's  Section 401(k) profit sharing plan
and reviews the Company's  other employee  benefit  arrangements.  The Company's
Chief Executive  Officer is not permitted to be present during the deliberations
or voting on his  compensation.  The Compensation  Committee did not meet during
the year ended June 30, 2005.

                                      -6-
<PAGE>

DIRECTOR NOMINATION PROCESS

     As a "controlled  company" under AMEX's listing  standards,  the Company is
not required to cause nominees for director to be selected or recommended to the
Board by either a nominating committee comprised solely of independent directors
or by a majority of the Company's independent directors.  The Board of Directors
has  determined not to form a nominating  committee  because it is a "controlled
company," with more than a majority of the Company's Common Stock owned by three
stockholders  who have agreed to vote  together in the election of directors and
can,   therefore,   elect  all  directors  (see  "Stockholders   Agreement"  and
"Controlled  Company,"  above)  and  because  there  has  historically  been few
vacancies on the Board.

     Instead,  the  full  Board  of  Directors,  a  majority  of whom  meet  the
"independent  director" criteria under the AMEX listing standards,  participates
in the  consideration  of director  nominees.  The Board does not have a charter
governing its nomination process.

     While the Board will consider nominees recommended by stockholders,  it has
not actively solicited recommendations from stockholders. Although the Board has
not established specific minimum qualifications, or specific qualities or skills
for  prospective  nominees,  the  Board  will  consider,  among  other  things a
potential nominee's financial and business experience,  educational  background,
understanding  of  the  Company's  business  and  industry,  skills  that  would
complement rather than duplicate skills of existing Board members,  demonstrated
ability in his or her professional field, integrity and reputation,  willingness
to work productively with other members of the Board and represent the interests
of  stockholders  as a whole,  and time  availability to perform the duties of a
director,  as well as the then current  size and  composition  of the Board.  No
weight is assigned  to any of the factors and the Board may change its  emphasis
on  certain  of these  factors  from  time to time in light of the  needs of the
Company at the time. The Board will evaluate nominees of stockholders  using the
same criteria as it uses in evaluating other nominees to the Board.

     A stockholder  seeking to recommend a prospective nominee should submit the
recommendation  to  the  Board  in  the  manner  described  under   "Stockholder
Communications  with  Directors,"  below, and within the time frame described in
the second sentence under the caption  "Miscellaneous - Stockholder  Proposals,"
below. The recommendation  should include,  in addition to the name and business
or  residence  address of the nominee,  the written  consent of the person being
recommended  to being named in the  Company's  proxy  statement  relating to the
stockholder vote on his or her election and to serving as a director if elected.
The  recommendation  must also include all information that would be required to
be  disclosed  concerning  such  nominee in  solicitations  of  proxies  for the
election  of  directors  pursuant  to  Regulation  14A under the  Exchange  Act,
including,  but not limited to, the  information  required by Items 401, 403 and
404 of Regulation S-B of the SEC. In addition, the stockholder  recommending the
proposed nominee must provide the recommending  stockholder's  name, address and
number of shares of the Company's Common Stock owned by such stockholder as they
appear on the  Company's  stockholder  records and the length of time the shares
have been owned by the recommending stockholder (or, if held in "street name," a
written   statement  from  the  record  holder  of  the  shares  confirming  the
information concerning such stock ownership of the recommending stockholder) and
whether the  recommendation is being made with or on behalf of one or more other
stockholders  (and,  if so,  similar  information  with  respect  to each  other
stockholder with or on behalf of whom the recommendation is being made).

     Each  nominee for  election  named in this Proxy  Statement is standing for
re-election.  William K. Steiner, Michael S. Steiner and Alan I. Greenstein, who
are  parties to a  Stockholders  Agreement  relating  the voting of 64.4% of the
Company's Common Stock, have agreed to vote for the nominees named in this Proxy
Statement.  See  "Ownership  of  Certain  Beneficial  Owners  and  Management  -
Stockholders Agreement," above.

                                      -7-
<PAGE>

STOCKHOLDER COMMUNICATIONS WITH DIRECTORS

     Stockholders  may  communicate  directly  with  the  Board  or one or  more
specific directors by sending a written  communication to: Board of Directors or
a specific director,  c/o the Company's President,  290 N.E. 68th Street, Miami,
Florida 33138.  The Company's  President will forward the  communication  to the
director or directors to whom it is addressed,  except for  communications  that
are (1)  advertisements  or  promotional  communications,  (2) related solely to
complaints  by users of the  Company's  products or services  that are  ordinary
course of  business  customer  service  and  satisfaction  issues or (3) clearly
unrelated to the Company's business,  industry,  management,  Board or committee
matters.  The President will make all communications not specifically  addressed
to any one  director  available  to each member of the Board at the Board's next
regularly scheduled meeting.

CODES OF BUSINESS CONDUCT AND ETHICS

     The Company has adopted a Code of Business  Conduct and Ethics that applies
to all of its directors, officers and employees, which is supplemented by a Code
of Conduct that  additionally  applies to its Chief Executive Officer and senior
financial officers. Copies of these codes are available on the Company's website
at www.drycleanusa.com by clicking on "Investors."

AUDIT COMMITTEE REPORT

     Management  has the  primary  responsibility  for the  Company's  financial
reporting process,  including its consolidated  financial statements,  while the
Board is  responsible  for  overseeing  the Company's  accounting,  auditing and
financial reporting  practices and the Company's  independent public accountants
have the responsibility for the examination of the Company's annual consolidated
financial statements, expressing an opinion on the conformity of those financial
statements with accounting  principles  generally  accepted in the United States
and issuing a report thereon.  The  responsibilities  of the Audit Committee are
described  under the caption  "Election of Directors - Committees of the Board."
In assisting the Board in fulfilling its oversight  responsibility  with respect
to the Company's year ended June 30, 2005, the Audit Committee:

o    Reviewed and discussed the audited  consolidated  financial  statements for
     the fiscal year ended June 30, 2005 with  management  and Morrison,  Brown,
     Argiz & Farra, LLP ("Morrison,  Brown"),  the Company's  independent public
     accountants;

o    Discussed  with  Morrison,  Brown the matters  required to be  discussed by
     Statement  on  Auditing  Standards  No. 61  relating  to the conduct of the
     audit; and

o    Received  the  written  disclosures  and the letter  from  Morrison,  Brown
     regarding its  independence  as required by  Independence  Standards  Board
     Standard No. 1, "Independence Discussions with Audit Committees." The Audit
     Committee  also discussed  Morrison,  Brown's  independence  with Morrison,
     Brown and considered  whether the provision of non-audit  services rendered
     by Morrison,  Brown was compatible with maintaining its independence  under
     SEC rules governing the  independence of a company's  outside auditors (see
     "Miscellaneous - Auditors").

     Based  on  the  foregoing  review  and  discussions,  the  Audit  Committee
recommended  to the Board  that the  Company's  audited  consolidated  financial
statements  for the fiscal year ended June 30, 2005 be included in the Company's
Annual Report on Form 10-KSB filed with the SEC for that year.

                                                 Respectfully,

                                                 David Blyer
                                                 Alan M. Grunspan
                                                 Stuart Wagner


                                      -8-
<PAGE>

                             EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The following table sets forth  information  concerning the compensation of
Michael S. Steiner, the Company's only executive officer whose cash compensation
exceeded  $100,000  during the  Company's  fiscal  year ended June 30,  2004 for
services in all  capacities to the Company during the Company's  2004,  2003 and
2002 fiscal years:

                                  Annual Compensation
                                  -------------------

    Name and                                                        All Other
Principal Position                Year             Salary        Compensation(1)
- ------------------                ----             ------        ---------------

Michael S. Steiner,               2005             $250,000          $1,166(1)
President and Chief               2004              250,000           1,082
Executive Officer                 2003              250,000             875

Alan I. Greenstein,               2005             $125,000             --
Executive Vice President          2004 (2)           12,019             --
and Chief Operating Officer
- ----------------------

(1)  "All Other  Compensation" for fiscal 2005 represents the Company's matching
     contribution  in fiscal 2005 for  Michael S.  Steiner  under the  Company's
     Profit Sharing Plan pursuant to Section 401(k) of the Internal Revenue Code
     of 1986, as amended.

(2)  Mr. Greenstein joined the Company in May 2004.

OPTION GRANTS AND EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUES

     No options were granted to, or exercised by,  Michael S. Steiner or Alan I.
Greenstein  during the  Company's  fiscal  year ended June 30, 2005 nor were any
options held by Messrs. Steiner or Greenstein at June 30, 2005.

STANDARD REMUNERATION OF DIRECTORS

     Each non-employee director receives a fee of $5,000 per annum. The Chairman
of the Audit Committee  (presently Alan M. Grunspan)  receives an additional fee
of $5,000 per annum for services in that capacity. Directors are also reimbursed
for out-of-pocket  expenses incurred in connection with performing their duties.
In the event that the Board of Directors  holds more than four meetings during a
fiscal  year in addition  to its annual  meeting  held on the date of the Annual
Meeting of  Stockholders,  each director  receives $750 for each such additional
meeting such director attends.

     The Company's  1994  Non-Employee  Director Stock Option Plan expired as to
future grants on August 23, 2004.  Prior to its  expiration,  each  non-employee
director of the Company  serving on August 24, 1994 was then  granted,  and each
person who  subsequently  became a non-employee  director for the first time was
granted at the time of  election  to the  Board,  an option to  purchase  10,000
shares of the Company's  Common Stock at an exercise  price equal to 100% of the
fair  market  value of the  Company's  Common  Stock on the date of grant.  Each
option is for a term of ten years and vests over a four-year  period  commencing
one year after the date of grant (with  vesting  credit given for any service on
the Board of Directors prior to the date of grant). In August 2004, Lloyd Frank,
a director of the  Company,  exercised  an option  granted to him in August 1994
pursuant to this plan to purchase 10,000 shares of the Company's Common Stock at
$1.00 per share.

                                      -9-
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company  leases  27,000  square feet of warehouse and office space from
William K. Steiner, a principal stockholder,  Chairman of the Board of Directors
and a director of the Company. On September 9, 2005, the Company and Mr. Steiner
entered  into a new  lease  for this  space for a  three-year  period  beginning
November  1,  2005  at an  annual  rental  of  $94,500,  with  annual  increases
commencing  November 1, 2006 of 3% over the rent in the prior year.  The Company
is  also to bear  real  estate  taxes,  utilities,  maintenance,  non-structural
repairs and insurance.  The new lease contains two three-year renewal options in
favor of the  Company.  The rent  (exclusive  of real estate  taxes,  utilities,
maintenance, repairs and insurance borne by the Company) under the former lease,
which  expired by its terms on October 31, 2005,  was $83,200 for the year ended
June 30, 2005. The Company believes that the terms of the new lease are, and the
old lease were,  comparable to terms that would be obtained from an unaffiliated
third party for similar property in a similar locale.

                                  MISCELLANEOUS

AUDITORS

     The 2005 Annual Report to Stockholders of the Company,  including financial
statements and report thereon of Morrison, Brown, Argiz & Farra, LLP ("Morrison,
Brown"),  accompanies this Proxy Statement but is not incorporated in and is not
to be deemed a part of this Proxy Statement.

     The  Company's  Audit  Committee  has  selected  Morrison,  Brown to act as
independent  auditors for the Company  during the year ending June 30, 2006. The
Audit Committee nevertheless retains the discretion to select different auditors
should it then deem it in the Company's interests.

     Representatives  of  Morrison,  Brown are  expected  to be  present  at the
Meeting with the opportunity to make a statement if they desire to do so and are
expected  to be  available  to respond to  appropriate  questions  addressed  by
stockholders.

     On June 30,  2005,  the Audit  Committee  dismissed  BDO  Seidman LLP ("BDO
Seidman") as the Company's  registered public accountants and retained Morrison,
Brown as the Company's new independent public accountants. BDO Seidman's reports
on the Company's financial statements for the years ended June 30, 2003 and 2004
did not  contain  any  adverse  opinion or  disclaimer  of  opinion  and was not
qualified or modified as to uncertainty,  audit scope or accounting  principles.
There were no disagreements  with BDO Seidman,  whether or not resolved,  on any
matter of accounting principles or practices,  financial statements  disclosure,
or  auditing  scope  or  procedure  which,  if not  resolved  to  BDO  Seidman's
satisfaction,  would have  caused BDO Seidman to make  reference  to the subject
matter of the disagreement in connection with its report.  No such  disagreement
was  discussed  with the Board of  Directors  or any  committee  of the Board of
Directors  of the  Company.  BDO  Seidman  did not  advise  the  Company  of the
existence of any matter  described in Item  304(a)(1)(iv)(B)  of SEC  Regulation
S-B. The Company  authorized  BDO Seidman to respond  fully to the  inquiries of
Morrison,  Brown.  On July 6,  2005,  BDO  Seidman  issued a  letter  to the SEC
agreeing  with the  foregoing  statements  made by the  Company  insofar as they
related to BDO Seidman.

     Neither the Company nor anyone on behalf of the Company consulted Morrison,
Brown  regarding  (a) either  the  application  of  accounting  principles  to a
specified  transaction,  either  completed  or  proposed,  or the  type of audit
opinion that might be rendered on the financial  statements of the Company,  and
no written or oral advice of Morrison,  Brown was  provided  with respect to any
accounting,  auditing,  or financial  reporting issue or (b) any matter that was
either  the

                                      -10-
<PAGE>

subject of a disagreement  or any event described in Item  304(a)(1)(iv)  of SEC
Regulation S-B. The Company has also provided Morrison, Brown with a copy of its
Report on Form 8-K with respect to the change in registered  public  accountants
and provided Morrison,  Brown with the opportunity to furnish the Company with a
letter addressed to the SEC containing any new information, clarification of the
Company's expression of its views or the respects in which Morrison,  Brown does
not agree with the disclosures made in the Report.

AUDIT FEES

     Morrison,  Brown's fees for its audit of the Company's annual  consolidated
financial  statements for the year ended June 30, 2005,  audit of a subsidiary's
fiscal 2005  financial  statements  required to be included in the  subsidiary's
Uniform  Franchise  Offering  Circular  and  review of the  Company's  quarterly
interim financial statements for fiscal 2006 are $58,000. BDO Seidman's fees for
its audit of the Company's annual consolidated financial statements for the year
ended June 30, 2004,  audit of a subsidiary's  fiscal 2004 financial  statements
included in the subsidiary's  Uniform Franchise  Offering Circular and review of
the  Company's  quarterly  interim  financial  statements  for fiscal  2005 were
$57,000.

AUDIT-RELATED FEES

     Neither Morrison,  Brown nor BDO Seidman rendered audit related services to
the Company during either fiscal 2005 or fiscal 2004.

TAX FEES

     Morrison,  Brown  provided  no tax  services  during  fiscal  2005 but will
prepare and file the Company's  federal,  state and local tax returns for fiscal
2005 for a fee of $10,000.  BDO  Seidman's  fee billed for tax  compliance,  tax
advice and tax planning  during fiscal 2005 relating to preparing and filing the
Company's  federal,  state and local  income tax  returns  for  fiscal  2004 was
$5,500.

ALL OTHER FEES

     Neither  Morrison,  Brown nor BDO Seidman  provided  other  services to the
Company during either fiscal 2005 or fiscal 2004.

     In  connection   with  the  standards  for   independence  of  a  company's
independent  public  auditions,  the Audit Committee has considered  whether the
provision of such services is compatible with  maintaining  the  independence of
Morrison, Brown and BDO Seidman.

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES

     It is the policy of the Audit Committee that all audit, audit related,  tax
and other permissible  non-audit services provided by the Company's  independent
auditor be pre-approved. It is expected that pre-approval will be for periods up
to one year and be set  forth in an  engagement  letter  approved  by the  Audit
Committee  of the  Board  that is  detailed  as to the  particular  services  or
category of services to be provided and subject to a specific budget. The policy
also  requires  additional  approval  of any  engagements  that  was  previously
approved but is anticipated  to exceed the  pre-approved  fee budget level.  The
policy  permits the Chair of the Audit  Committee to  pre-approve  the Company's
principal independent auditor's services where the Company deems it necessary or
advisable  that such services  commence  prior to the next  regularly  scheduled
meeting  of the  Audit  Committee  provided  that the Audit  Committee  Chair is
required   to  report  to  the  full  Audit   Committee   on  any   pre-approval
determinations made in this manner.


                                      -11-
<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of ownership, and reports
of changes of ownership,  of the Company's  equity  securities  with the SEC and
furnish copies of those reports to the Company.  Based solely on a review of the
copies  of  the   reports   furnished   to  the  Company  to  date  and  written
representations  that no other reports were required,  the Company believes that
all reports  required to be filed by such persons with respect to the  Company's
fiscal year ended June 30, 2005 were timely filed.

STOCKHOLDER PROPOSALS

     From time to time stockholders may present proposals for consideration at a
meeting  of  stockholders  which may be proper  subjects  for  inclusion  in the
Company's   proxy  statement  and  form  of  proxy  relating  to  that  meeting.
Stockholder  proposals  intended to be included in the Company's proxy statement
and form of proxy  relating  to the  Company's  Annual  Meeting of  Stockholders
presently  scheduled to be held in November 2005 must be received by the Company
at its principal executive offices, 290 N.E. 68th Street,  Miami, Florida 33138,
by June 23, 2006. Any such proposals, as well as any questions relating thereto,
should be directed to the President of the Company. As to any proposals intended
to be presented  by a  stockholder  without  inclusion  in the  Company's  proxy
statement  and  form  of  proxy  for  the  Company's   next  Annual  Meeting  of
Stockholders,  the proxies named in the Company's form of proxy for that meeting
will be entitled to exercise discretionary authority on that proposal unless the
Company receives notice of the matter on or before  September 6, 2006.  However,
even if such  notice  is timely  received,  such  proxies  may  nevertheless  be
entitled  to  exercise  discretionary  authority  on that  matter to the  extent
permitted by SEC regulations.

ADDITIONAL INFORMATION

     The cost of  solicitation  of Proxies,  including  the cost of  reimbursing
banks and brokers for forwarding proxy soliciting  material to their principals,
will  be  borne  by  the  Company.   Proxies  may  be  solicited  without  extra
compensation  by certain  officers and regular  employees of the Company by mail
and, if  determined  to be  necessary,  by  telephone,  telecopy,  telegraph  or
personal interviews.

OTHER MATTERS

     The Board of  Directors  does not intend to bring  before the  Meeting  any
matters other than those  specifically  described  above and knows of no matters
other than the  foregoing  to come before the Meeting.  If any other  matters or
motions  properly  come before the Meeting,  it is the  intention of the persons
named in the  accompanying  form of Proxy to vote such Proxy in accordance  with
their  judgment on such matters or motions,  including any matters  dealing with
the conduct of the Meeting.

                                         By Order of the Board of Directors,

                                                     Lloyd Frank,
                                                       Secretary

Dated:  October 21, 2005


                                      -12-
<PAGE>

                               DRYCLEAN USA. INC.

|X| PLEASE MARK VOTES
   AS IN THIS EXAMPLE

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS

     NOVEMBER 18, 2005

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned hereby appoints Michael S. Steiner, Venerando J. Indelicato
and Lloyd Frank, and each of them, proxies, with full power of substitution,  to
vote at the Annual Meeting of  Stockholders  of DRYCLEAN USA, Inc. to be held on
Friday,  November 18, 2005 (including any adjournments or postponements thereof)
according to the number of votes the undersigned  might cast and with all powers
the undersigned would possess if personally  present,  upon the matter specified
hereon,  as more fully described in the accompanying  Notice of such meeting and
Proxy Statement, receipt of which is hereby acknowledged, and with discretionary
power upon such other business as may come before the meeting,  hereby  revoking
any proxies heretofore given.

<TABLE>
<CAPTION>
Election of Directors:

         MICHAEL S. STEINER, WILLIAM K. STEINER,                                    FOR       WITH-     FOR ALL
         VENERANDO J. INDELICATO,  DAVID BLYER, LLOYD FRANK, ALAN M. GRUNSPAN                 HOLD      EXCEPT
         AND STUART WAGNER

        <S>                                                                         <C>       <C>       <C>
                                                                                    |_|       |_|       |_|


         INSTRUCTION:  TO  WITHHOLD  AUTHORITY  TO VOTE  FOR  ANY  INDIVIDUAL
         NOMINEE(S),  MARK "FOR ALL EXCEPT" AND WRITE THAT  NOMINEE'S NAME IN
         THE SPACE PROVIDED BELOW.


          Please be sure to sign and date        |     Date                        EACH PROPERLY  EXECUTED  PROXY WILL BE VOTED
            this Proxy in the box below          |                               IN  ACCORDANCE  WITH  THE   SPECIFICATIONS   MADE
                                                 |                               ABOVE.IF NO SPECIFICATIONS ARE MADE, THE SHARES
- ------------------------------------------------------------------------------   REPRESENTED BY THIS PROXY WILL BE VOTED "FOR"
                                                                                 ALL LISTED NOMINEES.

           Stockholder sign above           Co-holder (if any) sign above
- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Detach above card, sign, date and mail in postage paid envelope provided.

                               DRYCLEAN USA, INC.

- --------------------------------------------------------------------------------

     Please sign your name or names exactly as set forth  hereon.  When stock is
in the name of more than one  person,  each such  person  should sign the proxy.
When signing as attorney, executor,  administrator,  trustee or guardian, please
indicate the capacity in which you are acting.  Proxies executed by corporations
should be signed by a duly authorized officer.

     STOCKHOLDERS WHO DESIRE TO HAVE STOCK VOTED AT THE MEETING ARE REQUESTED TO
FILL IN, DATE, SIGN AND RETURN THIS PROXY. NO POSTAGE IS REQUIRED IF RETURNED IN
THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.

                               PLEASE ACT PROMPTLY
                     SIGN, DATE & MAIL YOUR PROXY CARD TODAY

- --------------------------------------------------------------------------------

IF YOUR ADDRESS HAS CHANGED,  PLEASE  CORRECT THE ADDRESS IN THE SPACE  PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.

- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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