UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





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





For the
fiscal year ended May31,
2010





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





For the
transition period from _________ to ________





Commission
file number:     333-145910





SunSi
Energies Inc.


(Exact
name of registrant as specified in its charter)





Nevada
                    20-8584329(State
      or other jurisdiction of incorporation or
                      organization)
                    (I.R.S.
      Employer Identification No.)45
      Main Street, Suite 309 Brooklyn, New York
                    11201(Address
      of principal executive offices)
                    (Zip
      Code)





Registrant’s
telephone number:  646-205-0291





Securities
registered under Section 12(b) of the Exchange Act:





Title
      of each class
                  Name
      of each exchange on which registeredNone
                  not
applicable





Securities
registered under Section 12(g) of the Exchange Act:





Title
      of each class
                Name
      of each exchange on which registeredNone
                not
applicable





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes ̈Nox





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes ̈Nox





Indicate
by checkmark whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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. YesxNo ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ̈No ̈





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) 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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer  ̈
                    Accelerated
      filer  ̈Non-accelerated
      filer  ̈
                    Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes ̈Nox





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter. $26,931,250





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.  27,431,000 as of August 16,
2010





DOCUMENTS
INCORPORATED BY REFERENCE





None.










TABLE OF
CONTENTS





PagePART
      IItem
      1.
                    
                    Business
                    
                    3Item
      1A.
                    
                    Risk
      Factors
                    
                    8Item
      1B.
                    
                    Unresolved
      Staff Comments
                    
                    9Item
      2.
                    
                    Properties
                    
                    9Item
      3.
                    
                    Legal
      Proceedings
                    
                    9Item
      4.
                    
                    [Removed
      and Reserved]
                    
                    9PART
      IIItem
      5.
                    
                    Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                    
                    9Item
      6.
                    
                    Selected
      Financial Data
                    
                    10Item
      7.
                    
                    Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    
                    10Item
      7A.
                    
                    Quantitative
      and Qualitative Disclosures About Market Risk
                    
                    13Item
      8.
                    
                    Financial
      Statements and Supplementary Data
                    
                    13Item
      9.
                    
                    Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
                    
                    13Item
      9A.
                    
                    Controls
      and Procedures
                    
                    13Item
      9B.
                    
                    Other
      Information
                    
                    14PART
      IIIItem
      10.
                    
                    Directors,
      Executive Officers and Corporate Governance
                    
                    14Item
      11.
                    
                    Executive
      Compensation
                    
                    17Item
      12.
                    
                    Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                    
                    18Item
      13.
                    
                    Certain
      Relationships and Related Transactions, and Director
      Independence
                    
                    19Item
      14.
                    
                    Principal
      Accounting Fees and Services
                    
                    19PART IVItem
      15.
                    
                    Exhibits,
      Financial Statement Schedules
                    
                    20


2


PART I


Item
1.   Business





In
General





The
company (“Company”, or “SunSi”, or “we”, “us”, “our”) incorporated in Nevada on
January 30, 2007.  On March 24, 2009, the Company changed its name to
SunSi Energies Inc. (fka Bold View Resources, Inc.) and changed its business
focus to the acquisition of Trichlorosilane (“TCS”) production facilities in
China. TCS is a key raw materials required in the solar photovoltaic
industry.  Our principal executive office is currently located in
Brooklyn, New York and our website is www.sunsienergies.com.  Our
common stock trades on the Over the Counter Bulletin Board under the ticker
symbol “SSIE”.





SunSi is
positioned to take advantage of one of the fastest growing trends and markets in
the world today – the clean and renewable alternative energy market –
specifically the solar energy market. SunSi’s goal is to acquire and develop a
portfolio of high quality TCS distribution rights and production facilities that
are strategically located and possess a potential for future growth and
expansion. Relatively unknown, but essential to the solar energy industry, TCS
is the main feedstock of the solar energy industry, used in the production of
silicon, which in turn is used in the production of solar photovoltaic (“PV”)
energy producing panels.





SunSi,
through our wholly-owned subsidiary SunSi Energies Hong Kong Limited, a Hong
Kong company (“SunSi HK”), plans to acquire Chinese TCS production facilities
and distribution rights.





We
believe that there will be growth in TCS demand and its geographic distribution
throughout the world markets. Our objective is to buy TCS production facilities
and increase their plant capacity after acquisition to a total capacity of over
125,000 metric tons (MT) within the next three years. Additionally, whenever
possible we will also acquire distribution rights for TCS. We have already
identified North America and Europe as high potential markets for its TCS.
Countries, such as Germany and Spain, have led the demand for solar PV in recent
years, while the United States is expected to experience a significant growth
before 2012 in the renewable energy and solar markets. In addition, SunSi
expects to become a key supplier to the emerging Chinese and Asian polysilicon
and solar energy markets.





Acquisition
of Zibo Baokai Commerce and Trade Co. and Zibo Baokai Chemical Plant
Distribution Rights





Recently,
we determined that despite our best efforts over the past year, we could not
acquire as planned the TCS production factory at Zibo (“ZBC”) on terms that
would be beneficial to SunSi’s shareholders; therefore we discontinued our
efforts to acquire ZBC and instead obtained distribution rights to all of ZBC’s
TCS production in the following manner:





On
December 12th 2009,
SunSi HK secured the exclusive distribution rights for ZBC TCS for the
international market. At this time, exportation of TCS out of China is minimal,
as most of the Chinese production is used to supply the country’s demand. SunSi
has already identified several potential foreign buyers, which would allow for
higher margins. The lower cost of production in China is advantageous when
competing over the globe; one that SunSi intends to capitalize on to not only
increase its profits, but also its global client base. To date the Company has
not recorded any revenue from these distribution rights.





On April
29th 2010, SunSi HK signed a definitive agreement to acquire 90% of Zibo Baokai
Commerce and Trade Co. (“Zibo Baokai”). At the date of this report, the company
is waiting for the issuance of a business license in order to consummate this
acquisition.  All other terms necessary to complete the acquisition
were completed on July 31, 2010, when the Articles of Association and Joint
Venture Agreement were signed. When completed, this acquisition will enable
SunSi to generate revenue and to create a presence within the Chinese and other
international TCS markets.





Zibo
Baokai owns the exclusive domestic distribution rights and SunSi Energies Hong
Kong Limited owns the international rights. Therefore, 100% of ZBC’s TCS
production will be controlled by the Company and its affiliates. As part of the
distribution rights and the Baokai acquisition when consummated, ZBC will sell
its all of TCS production to the Company at cost plus 10%-15%. The resale price
of the TCS will be determined at our discretion.





ZBC





During
our due diligence process on the ZBC facility, we determined that it had it been
managed well by an experienced management team and generated profitable
operations under United States Generally Accepted Accounting Principles
(GAAP).





ZBC is
strategically located in the Shandong province of China. Founded in 2000, the
ZBC facility was originally a wholly-owned subsidiary of Baoxin Mining Company
that focused on the research, development, production and marketing of organic
silicon products. In 2003, the company obtained its license to produce TCS and
started the construction of a new facility, which was built on a 24-acre
property located in the city of Zibo, Shandong Province, China (approximately 50
miles east of Jinan).





ZBC
started producing TCS in 2005. That same year, it sold approximately 67 MT of
this new production.  Its production increased to over 500 MT in 2006
and to 2,000 MT the following year.  In late 2007, it began increasing
the size of its production facility; an expansion plan that was completed in
late 2008. This expansion triggered, during that year, an almost tripled
production of TCS (6,000 MT). ZBC’s new production line brings the facility to a
current capacity of 25,000 MT per year.





ZBC is
ISO9001 certified and employs over 150 people. The expertise, commitment and
dedication of its employees have allowed ZBC to only produce quality products;
thus earning an outstanding reputation among its domestic
customers.





Planned
Acquisition and Capacity Expansion of Wendeng He Xie Silicon Co.
Ltd





On August
3rd
2010, SunSi HK signed a letter of intent with Wendeng He Xie Silicon Co. Ltd.
(“Wendeng”) for the acquisition of 60% of its existing 20,000 MT TCS facility,
plus an increase of Wendeng’s capacity by an additional 40,000 MT.





Based
upon the valuable experience we’ve gained in the unsuccessful ZBC acquisition
process, we believe it will take approximately 4-6 months to obtain proper
environmental and other permitting and licenses, and complete the US GAAP audits
necessary to consummate the acquisition of Wendeng.





During
the due diligence period the Company will be working on raising equity
funding to acquire Wendeng and to expand Wendeng's capacity by 40,000 MT.
The amount of funding to consummate the acquisition
and complete such an expansion is currently indeterminable. If we
are unable to raise this amount through the sale of equity securities, we will
have to secure additional debt financing to complete the acquisition and the
planned expansion project.  If necessary, we intend to negotiate terms
revolving line of credit and conditions for a construction/term loan with
various banking institutions.  However, there is no assurance that
debt financing will be available or, if available, on terms that are favorable
to us.    In addition, if we are unable to raise sufficient
equity capital to commence development of the plant expansion, we may pursue the
plant expansion through alternative ownership structures, such as joint ventures
with other entities. We currently have no commitment for either or equity or
debt financing. There can be no assurances that the Company will be successful
in raising sufficient funds to consummate the acquisition, or to raise expansion
capital if the acquisition can be consummated.





Wendeng





We
believe Wendeng is one of the largest TCS manufacturers in China, and is located
in the Shandong province of China close to strategic ports including Weihai and
Qingdao. It started producing TCS in 2009. The Wendeng facility was designed and
is currently managed by Zhang Fahe, with over 30 years of experience in the
Chinese chemical industry. Mr. Fahe has been working directly in the field of
TCS since 2001 where he has developed efficient TCS production
technology.





Wendeng
has one major client to which it sells most of its current production. The
facility is easily accessible via rail and major highways, in addition to be
being well equipped for handling chemical products. We believe we can expand
Wendeng’s client base after the acquisition is consummated.





Wendeng Equipment
Suppliers





The
Wendeng facility is situated within a province that specializes in the chemical
industry. Most standard equipment can therefore be sourced locally. Some
equipment needs to be customized specifically for the production of TCS. This
customization can also be achieved locally. The local management team already
has experience working with the different suppliers and the suppliers are also
well aware of the equipment requirements specific to TCS
production.





Wendeng Site
Selection





The
Wendeng facility is strategically located for exportation and also gives us
access to supply and product transportation due to the heavy truck and train
volume in the area.





The
Wendeng facility site includes utilities infrastructure and highway
access.  When we assessed this acquisition, we considered the
following:





·
            Proximity
      to feedstock suppliers;·
            Proximity
      to ports;·
            Road,
      rail and water transportation infrastructure at the
  site;·
            Existing
      storage and transfer infrastructure;·
            TCS
      market proximity; and·
            Skilled
      labor availability.





If we do
not proceed with the Wendeng acquisition because we are unable raise sufficient
capital or if our due diligence process discovers unforeseen problems; and
decide to move forward with the acquisition of other TCS production facilities,
this potential facility must meet the criteria above.


3


The
Trichlorosilane Industry-





TCS is a
colorless liquid containing silica powder, hydrogen and chlorine. It is the key
intermediate compound used to produce  pure polysilicon, from which
computer chips and solar cells are made.





The solar
PV value chain (diagram shown below) consists in a number of specific and
distinct steps from the production of TCS (first step in the value chain –
Polysilicon) to the end use in projects (last in the value chain –
Modules).  On a normalized scale (100%), TCS production and
polysilicon manufacturing tend to achieve the highest profit, followed by the
ingots and wafers.





The
buyers of TCS, and other companies along the solar PV value chain, have enjoyed
growth in the past few years, as China is trying to move away from coal power
generation. Because of government incentives and the ‘go green’ attitude of
local governments, this trend is expected to maintain itself in the near
future.





According
to Solarbuzz a leading solar industry publication outside of China, the solar
energy industry growth has been even more dynamic. In fact, the global solar
energy industry has grown by over 849% since 2000, from an installed capacity of
877 Mega Watts (MW) in 2000 to over 10,000 MW at the end of 2008. These figures
represent a compounded annual growth rate (CAGR) of almost 40% for the same
period.





The
outlook and industry forecast for the next 4 years, as reported by Solarbuzz, is
positive and is headed toward an additional growth spurt of 39% by the end of
2009. By 2012, it will be over 135% over the 2007 levels.





The five
countries leading the way in the next five years are:





China
                35.8
      % CAGRThailand
                35.7
      % CAGRIndonesia
                34.9
      % CAGRIndia
                34.3
      % CAGRSouth
      Africa
                29.7
      % CAGR


4


Environmental
and Other Regulatory Matters; Governmental Approvals





Before we
begin any TCS manufacturing expansion project, we will be required to obtain
various environmental, construction and operating permits. Permits for the
expansion of an existing facility are generally easier to obtain than permits
for new infrastructures. We will be responsible for obtaining all permits. If
permitting delays occur, acquisition and subsequent expansion of an acquired
plant may be delayed.





In
addition, permitting and environmental and other regulatory requirements may
change in the future.  Changes in permitting and regulatory
requirements could make compliance more difficult and costly.  If we
are unable to obtain necessary permits or to comply with the requirements of
such permits or any other environmental regulations, our business may be
adversely affected and we may not be able to construct or operate the
plant.





Regulatory
Permits





We will
be subject to regulations and will need to obtain a number of permits, which may
include zoning and building permits, environmental permits as well as work
safety permits. To date, we have not begun the permitting process, but intend to
commence that activity as soon as the necessary financing is in
place.  Once we begin the permitting process, we believe that
obtaining the necessary permits will generally take between three and four
months.





All the
permits above can be obtained in parallel to the construction work and should
therefore not affect the realization of the expansion. If for any reason any of
these permits are not granted, renovation costs for the plant may increase or
the plant may not be operated at all.  In addition, the provincial and
local governments could impose conditions or other restrictions in the permits
that are detrimental to us or that increase permit requirements or the testing
protocols and methods necessary to obtain a permit either before, during or
after the permitting process.  The Regional Government of Wendeng
could also modify the requirements for obtaining permits.  This would
likely have a material adverse impact on our operations, cash flows and
financial performance.





TCS
Quality Testing Procedures





Quality
targets are set in function of the required purity levels of
TCS.  Purity levels are currently being tested prior to shipment as
well as by the customer at the receiving end. Some impurities such as Calcium,
Magnesium and Copper are currently not being tested as this is not required by
China industry standards. To achieve our exportation objectives, new testing
installations will have to be implemented to meet the requirements of western
customers. There is currently an officer specifically assigned to quality
control at the Wendeng facility as well as at The ZBC facility.


5


Sales
and Marketing





Wendeng
has one major client for its TCS: Jiangsu Zhong Neng Silicon Industry Technology
Development Co. Ltd (GCL Silicon Technology Holdings Inc.). In 2009, GCL
purchased approximately 20,000 MT of TCS from Wendeng. We believe that after
acquisition we can expand Wendeng’s customer base to reduce its reliance and
concentration on one customer





ZBC
currently has three stable clients for its TCS and we intend to continue working
with them in the future. Zibo Baokai owns the exclusive distribution rights of
the entire production of the ZBC TCS facility.





ZBC
Current TCS Customers:





1.
                  Luo
      Yang Zhong Silicon Hi-tech Technology Development Co. Ltd China Silicon
      Corporation Ltd.2.
                  Jiangsu Zhong Neng
      Silicon Industry Technology Development Co. Ltd GCL Silicon Technology
      Holdings Inc. - http://www.gcl-silicon.com/3.
                  LDK
      Solar Co., Ltd,Hi-Tech Industrial Park-
  www.ldksolar.com.





Inputs
and Procurement Plan





Wendeng
already has contracts with key suppliers of silica powder, chlorine liquid and
methanol. Chlorine liquid, methanol and silica powder are currently sourced
locally in Shandong .We foresee that our current suppliers will be able to meet
the demand of the new production facility being developed. We believe Wendeng
has purchase commitments from companies to purchase a portion of their TCS
production, however, at this stage in the due diligence process, the amount is
indeterminable.





Government
Incentives and Regulations





China





We
believe China supplies half the world's solar panels, it contributes very little
to demand as the cost of tapping solar energy to generate electricity remains
steep and investors find little economic sense in pursuing solar projects in
China where incentives are few. To improve the situation, China's government
announced in March that it would offer to pay 20 yuan ($2.90) per watt of solar
systems fixed to roofs and which have a capacity of more than 50 kilowatt peak
(kwp). The subsidy, which could cover half the cost of installing the system,
attracted applications equivalent to the building of 1 gigawatt of solar
power.





China is
expected to raise its 2020 solar power generation target more than fivefold to
at least 10 GW. With incentives, analysts expect over 2 GW in new solar capacity
will be installed as early as 2011, up from just over 100 MW in 2008. To further
attract investors, we believe Beijing may align its solar energy policy with an
incentive scheme used in Europe and the United States called "feed-in tariff,"
which guarantees above-market prices for generating solar power. Beijing's
proposed tariff and other perks should help generate decent returns given that
local labor and equipment costs are cheap.





United
States





The U.S.
federal government and various state governments have created incentive programs
to encourage electricity production from renewable energy sources including
solar.  The federal incentive programs include corporate tax credits
and federal grant programs. State incentive programs include tax exemptions and
credits for U.S. producers as well as feed-in tariff programs in particular
states such as California. These various incentives are expected to benefit
electricity producers but also equipment manufacturers and polysilicon makers
due to increased demand.


6


The most
important recent development in the world of U.S renewable energy incentives is
the American Recovery and Reinvestment Act. Some of the highlights
include:





·
            Renewable Energy
      Grants through the Department of Treasury: Provides grants equal to
      30 percent of the cost of solar property placed in service during 2009 and
      2010, in lieu of the section 48-investment tax
  credit.





·
            Renewable Energy Loan
      Guarantee Program: Establishes a temporary DOE loan guarantee
      program for renewable energy projects, renewable energy manufacturing
      facilities and electric power transmission projects. Appropriates $6
      billion to pay the credit subsidy costs which should support $60 billion
      worth of loan guarantees. Eligible renewable projects are those that
      generate electricity or thermal energy and facilities that manufacture
      related components.





·
            Renewable Energy
      Manufacturing Investment Credit: Provides up to $2.3 billion to
      fund 30 percent investment tax credit for manufacturing assets used to
      manufacture advanced energy
property.





·
            Solar on Federal
      Property Program: Appropriates $5.5 billion to be deposited into
      the Federal Buildings Fund for expenditures to construct, repair and make
      alterations on federal buildings to increase the energy efficiency,
      including installing solar energy
equipment.





·
            Department of Energy
      Funding: Appropriates $16.8 billion to DOE’s Office of Energy
      Efficiency and Renewable Energy, including $2.5 billion for applied
      research, development, demonstration and deployment
    projects.





·
            New Clean Renewable
      Energy Bonds: Provides an additional $1.6 billion for new clean
      renewable energy bonds to finance facilities that generate electricity
      from renewable energy sources including solar
  facilities.





The
combination of these incentives is expected to drive an increase in the demand
for solar energy related equipment and components.





Europe





Countries
such as Germany and Spain have feed-in tariff programs to boost electricity
production from solar, wind and other renewable energy. In a typical feed-in
tariff program, utilities are required to buy all the electricity generated from
renewable sources, such as solar and wind, and pay rates that are higher than
the prices for conventional power.  Such programs have turned Germany
and Spain into lucrative markets for solar equipment makers. France, which is
big on nuclear power generation, recently expanded its feed-in tariff program.
The French government said it would allow solar power projects on commercial
rooftops to get 45 euro cents per kilowatt hour, higher than the rates set for
2009 in Germany. The UK government is also in the process of creating a feed-in
tariff program to boost electricity production from renewable
energy.





Competition





We
believe  to be in direct competition with producers of
TCS.  Many of these producers have significantly greater resources
than we do.  We also expect the number of competitors to increase
significantly in the future.  The development of other TCS plants,
particularly those in close proximity to the plant, will increase the supply of
TCS and may result in lower local TCS and glycerin prices and higher costs for
feedstock.


7


We will
be in direct competition with numerous other TCS plants that produce the same
products that we do.  We plan to compete with other TCS producers on
the basis of price of TCS, delivery service, decreased transportation costs and
our commitment to sustainability.





Currently,
we believe there are approximately 25 TCS producers which capacities are
relatively small, and less than 10 have a production capacity of over 2,000 MT
per year.





Today,
the price of TCS in China is approximately between $1,100 and $1,250 per MT and
we believe the number of producers has grown to over 20, holding a total
production capacity exceeding 145,000 MT per year. China’s TCS producers are
mainly located in Jiangxi, Tangshan of Hebei, Zibo of Shandong, Chongqing of
Sichuan, Wuhan of Hubei, and Shanghai. We believe the following table gives the
top six major producers:





Zibo
      Baoyun Chemical Plant, Zibo
                
                25,000
      MT / yearLeshan
      Yongxiang Resins Co., Ltd., Sichuan
                
                25,000
      MT / yearWendeng
      He Xie Silicon Co. Ltd., Wendeng
                
                20,000
      MT / yearTangshan
      Sunfar Silicon Industries Co., Ltd.
                
                20,000
      MT / yearHuaxiang
      Chemical Industry Co., Ltd., Hubei
                
                15,000
      MT / yearKaihua
      Synthetic Material Co., Ltd., Zhejiang
                
                10,000
      MT / year





Employees





We have 2
full-time and 1 part-time employees.





Research
and Development Expenditures





We have
not incurred any research or development expenditures since our
incorporation.





Item
1A.   Risk Factors.





A smaller
reporting company is not required to provide the information required by this
Item.


8


Item
1B.   Unresolved Staff Comments





A smaller
reporting company is not required to provide the information required by this
Item.





Item
2.   Properties





We do not
own any property.





Corporate
Offices





We lease
our principal offices at 45
Main Street, Suite 309 Brooklyn, New York, 11201 for an annual fee of
$2400. Our phone number is 646-205-0291.





Registered
Agent





Our agent
for service of process in Nevada is Paracorp Incorporated, 318 N CARSON ST #208,
Carson City, NV 89701.





Item
3.   Legal Proceedings





None.





Item
4.   [Removed and Reserved]





PART II





Item 5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities





Market
Information





Our
common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
sponsored by FINRA. The OTCBB is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network that provides information
on current "bids" and "asks", as well as volume information. Our shares are
quoted on the OTCBB under the symbol “SSIE.OB.”





The
following table sets forth the range of high and low bid quotations for our
common stock for each of the periods indicated as reported by the OTCBB. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.





On June
18th
2009 SunSi common stock began trading on the OTCBB.





Fiscal Year Ending May 31,
    2010Quarter Ended
                                        
                                        High
                                        
                                        
                                        LowMay 31, 2010
                                        
                                        $
                                        3.50
                                        
                                        
                                        $
                                        3.00Feb 28, 2010
                                        
                                        $
                                        4.00
                                        
                                        
                                        $
                                        1.01Nov 30, 2009
                                        
                                        $
                                        3.20
                                        
                                        
                                        $
                                        1.01Aug
      31, 2009
                                        
                                        $
                                        3.00
                                        
                                        
                                        $
                                        2.72


9


Holders
of Our Common Stock





As of May
31, 2010, we had 27,312,500 shares of our common stock issued and outstanding,
held by 45 shareholders of record.





Dividends





The
Company has not declared, or paid, any cash dividends since inception and does
not anticipate declaring or paying a cash dividend for the foreseeable
future.





Nevada
law prohibits our board from declaring or paying a dividend where, after giving
effect to such a dividend, (i) we would not be able to pay our debts as they
came due in the ordinary course of our business, or (ii) our total assets would
be less than the sum of our total liabilities plus the amount that would be
needed, if the corporation were to be dissolved at the time of distribution, to
satisfy the rights of any creditors or preferred stockholders.





Securities
Authorized for Issuance under Equity Compensation Plans





We do not
have any equity compensation plans.





Recent
Sales of Unregistered Securities





None.





Item
6.   Selected Financial Data





A smaller
reporting company is not required to provide the information required by this
Item.





Item
7.   Management’s Discussion and Analysis of Financial Condition and
Results of Operations





Forward-Looking
Statements





Certain
statements in this report, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words “believes,”
“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.


10


Overview





SunSi’s
goal is to acquire and develop a portfolio of high quality TCS distribution
rights and producing facilities that are strategically located and possess a
potential for future growth and expansion. TCS is the main feedstock of the
solar energy industry, used in the production of silicon, which in turn is used
in the production of solar PV energy producing panels.





Acquisition
of TCS Distribution Rights and Production Facilities





Recently,
we determined that despite our best efforts over the past year, we could not
acquire as planned the ZBC TCS production factory on terms that would be
beneficial to SunSi’s shareholders; therefore we changed directions, ended our
efforts to acquire ZBC and instead obtained distribution rights to all of ZBC’s
TCS production in the following manner:





On
December 12th 2009,
SunSi HK secured the exclusive distribution rights for ZBC TCS for the
international market. At this time, exportation of TCS out of China is minimal,
as most of the Chinese production is used to supply the country’s demand. SunSi
has already identified several potential foreign buyers, which would allow for
higher margins. The lower cost of production in China is advantageous when
competing over the globe; one that SunSi intends to capitalize on to not only
increases its profits, but also its global client base.





On April
29th 2010, SunSi HK signed a definitive agreement to acquire 90% of Zibo Baokai
Commerce and Trade Co. (“Zibo Baokai”). At the date of this report, we are
waiting for the issuance of a business license in order to consummate this
acquisition.  All other terms necessary to complete the acquisition
were completed on July 31, 2010, when the Articles of Association and Joint
Venture Agreement were signed. When completed this acquisition will enable SunSi
to generate revenue and to create a presence within the  Chinese and
other international TCS markets.





Additionally,
on August 3rd 2010,
SunSi HK signed a letter of intent with Wendeng He Xie Silicon Co. Ltd.
(“Wendeng”) for the acquisition of 60% of its existing 20,000 MT TCS facility.
Subsequent to acquisition, SunSi plans to invest an additional RMB 60,000,000
(approximately $ 8,800 000 USD) to increase Wendeng’s capacity of the current
facility by an additional 40,000 MT.


11


Results
of Operations for the fiscal years ended May 31, 2010 and 2009





Revenues.  We did
not earn any revenues from inception through the period ending May 31, 2010. As
noted above under  the section “Acquisition of TCS Distribution Rights
and Production Facilities”. On April 29th 2010, SunSi HK signed a definitive
agreement to acquire 90% of Zibo Baokai Commerce and Trade Co. (“Zibo
Baokai”).  We anticipate to begin earning revenues commencing in
September 2010 from the acquisition of Zibo Baokai, however, there can be no
assurances on the timing of commencing revenue, or that we will be able obtain
the business license necessary to consummate the acquisition.





Operating
Expenses.





We
incurred operating expenses for the years ended May 31, 2010 and 2009 of
$621,835 and $169,855, respectively. Operating expenses for the year ended May
31, 2010 included general and administrative expenses of $40,854 and
professional fees and expenses $580,981. Operating expenses for the year ended
May 31, 2009 included general and administrative expenses of $45,420 and
professional fees expenses of $124,435.  The increase in operating
expenses from 2009 to 2010 is attributable to the increased cost of locating and
conducting due diligence on TCS manufacturing facilities for
acquisition.





Gross Profit (Loss).We
incurred a net loss for the years ended May 31, 2010 and 2009 in the amounts of
$621,835 and $169,855, respectively. Our losses for all periods are attributable
to operating expenses and our lack of revenue.





Liquidity
and Capital Resources





As of May
31, 2010, we had cash on hand of $598,468 and a working capital surplus of
$212,278.





The
Company is pre-revenue and therefore to implement its business plan of acquiring
TCS manufacturing facilities it will need to raise capital.  The
Company believes that its existing sources of liquidity, along with cash
expected to be generated from the issuance of debt and/or equity securities,
will be sufficient to fund its operations, anticipated capital expenditures,
working capital and other financing requirements through May 31, 2011. In order
to fund capital expenditures or increase working capital above the current plan,
or complete any acquisitions, the Company may seek to obtain additional debt or
equity financing. It may also need to obtain additional debt or equity financing
if it experiences downturns or cyclical fluctuations in its business that are
more severe or longer than anticipated, or if the Company fails to achieve
anticipated revenue, experiences significant increases in the costs associated
with products sales, or if it engages in additional strategic transactions.
However, the Company cannot provide assurance that such financing will be
available to it on favorable terms, or at all. If, after utilizing the existing
sources of capital available to the Company, further capital needs are
identified and the Company is not successful in obtaining the financing, it may
be forced to curtail its existing or planned future operations





Critical
Accounting Policies





We
prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Our
management periodically evaluates the estimates and judgments made. Management
bases its estimates and judgments on historical experience and on various
factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates as a result of different assumptions or
conditions.


12


The
methods, estimates, and judgment we use in applying our most critical accounting
policies have significant impact on the results we report in our financial
statements. The SEC has defined "critical accounting policies" as those
accounting policies that are most important to the portrayal of our financial
condition and results, and require us to make our most difficult and subjective
judgments, often as a result of the need to make estimates of matters that are
inherently uncertain. Based upon this definition, our most critical estimates
are described below under the heading "Revenue Recognition." We also have other
key accounting estimates and policies, but we believe that these other policies
either do not generally require us to make estimates and judgments that are as
difficult or as subjective, or it is less likely that they would have a material
impact on our reported results of operations for a given period. Although we
believe that our estimates and assumptions are reasonable, they are based upon
information presently available, and actual results may differ significantly
from these estimates.





Financial
Instruments





Cash is
the only asset on the Company’s balance sheet. The carrying value of cash
approximates its fair value because of the short-term maturity of these
instruments.





Concentration of Credit
Risk





Financial
instruments that potentially subject the Company to credit risk consist
principally of cash.  Cash is deposited with a high quality credit
institution.





Income
Taxes





Potential
benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted FASB ASC 740 as of
its inception. Pursuant to FASB ASC 740 the Company is required to compute tax
asset benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in the financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.





Basic and Diluted Net Income
(Loss) Per Share





The
Company computes net income (loss) per share in accordance with ASC 260
“Earnings per Share”. ASC 260 requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common stockholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is
anti-dilutive.





Revenue
Recognition





The
Company is a development stage entity and has not recognized any revenues since
inception. The Company is in the process of acquiring a facility in China that
produces trichlorosilane (“TCS”) and certain byproducts. In the event this
acquisition is successfully consummated the Company will generate revenues from
the sales of TCS and certain by products. Revenue will be recognized when all of
the following elements are satisfied (i) there are no uncertainties regarding
customer acceptance;(ii) there is persuasive evidence that an agreement exists;
(iii) delivery has occurred; (iv) legal title to the products has transferred to
the customer; (v) the sales price is fixed or determinable; and (vi)
collectability is reasonably assured.





Off
Balance Sheet Arrangements





As of May
31, 2010, there were no off balance sheet arrangements.





Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market
Risk





A smaller
reporting company is not required to provide the information required by this
Item.





Item
      8.
            Financial
      Statements and Supplementary Data





See the
financial statements annexed to this annual report.





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





None





Item
      9A.
            Controls
      and Procedures





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission’s rules and forms. Disclosure controls
and procedures include without limitation, controls and procedures designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Exchange Act is accumulated and communicated to management,
including our chief executive officer and treasurer, as appropriate to allow
timely decisions regarding required disclosure.





As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief executive
officer and chief financial officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of May 31, 2010. Based on their evaluation, they concluded that
our disclosure controls and procedures were effective.


13


Our
internal control over financial reporting is a process designed by, or under the
supervision of, our chief executive officer and chief financial officer and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of our financial reporting and
the preparation of our financial statements for external purposes in accordance
with generally accepted accounting principles. Internal control over financial
reporting includes policies and procedures that pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets; provide reasonable assurance that transactions
are recorded as necessary to permit preparation of our financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with the authorization of our
board of directors and management; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on our financial
statements.





Under the
supervision and with the participation of our management, including our chief
executive officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the criteria established in
Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”). Based on this evaluation
under the criteria established in Internal Control – Integrated Framework, our
management concluded that our internal control over financial reporting was
effective as of May 31, 2010.





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.





Changes in Internal Control
Over Financial Reporting.





During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.





Item
9B.    Other Information





On April
29th, 2010,
the Company appointed Chanming Chen as Chief Representative of China of SunSi
Energies Hong Kong Limited.  See Item 10 below for Mr. Chen’s
biography.





PART III





Item
10.     Directors, Executive Officers and Corporate
Governance





The
following information sets forth the names of our current directors and
executive officers, their ages as of May 31, 2010 and their present
positions.





Name
                      
                      Age
                      
                      Position Held with the
                        CompanyMichel G. Laporte
                      
                      47
                      
                      President, Chief Executive Officer, and
      DirectorRichard St-Julien
                      
                      41
                      
                      Vice-President, Secretary
                        and DirectorDavid Natan
                      
                      57
                      
                      Chief Financial OfficerKebir
      Ratnani
                      
                      59
                      
                      Director





Set forth
below is a brief description of the background and business experience of
executive officers and directors.


14


Michel
G. Laporte, Director,
President & Chief Executive Officer





Michel G.
Laporte has been our President, CEO and Director since March 24,
2009.  Prior to this he served as a consultant over the last five
years for management of assets around the world in addition to setting up
complex business structures combining various countries, entities and domestic
as well as international jurisdictions.  He also served as a
consultant for various international companies on finance and
investments.  Mr. Laporte is also currently president of Methes
Energies International Ltd.





Richard
St-Julien, Director, Vice President, Secretary & Chief Legal
Officer





Richard
St-Julien has been our Director, VP, Secretary and Director since March 24,
2009.  He holds a Bachelor of Law from the University of
Ottawa.  Over the last five years, he has been practicing as an
attorney in the areas of Commercial and International Law and advises various
companies on financing and other corporate matters.  Simultaneously,
he has been involved in numerous business ventures as entrepreneur in Canada, in
the United States as well as in other countries.





Kébir
Ratnani,Director.





Mr.
Ratnani has been our Director since March 24, 2009.  He possesses 30
years of experience in the natural gas, electricity, windmill, waste water and
water sectors.  Since 2000, he joined SNC-Lavalin International, one
of the leading engineering and construction groups in the world and a major
player in the ownership of infrastructure and in the provision of operations and
maintenance services, as Senior Vice-President.  He is responsible for
water, energy and infrastructure projects in Africa, the Middle East and Latin
America. Mr. Ratnani serves on the board of Sofame Technologies
Inc.





David
Natan, Chief Financial Officer





David
Natan has been our Chief Financial and Accounting Officer since February 2010.
Mr. Natan earned his bachelor’s in Economics/Accounting from Boston University.
Mr. Natan has over 30 years of experience and had previously held CFO and
executive management positions with several private companies and various Nasdaq
and AMEX listed public companies. He became a certified public accountant while
working with the national accounting firm of Deloitte and Touche in
Boston.





Advisory
Committee





Chanming
Chen,





Mr. Chen
has been the Chief Representative of China of SunSi Energies Hong Kong Limited
since April 29th 2010
and brings over 38 years of experience in foreign investment and trade
administration in China. He has previously held various key positions within the
Chinese government of Shandong, including being specifically responsible for
overseeing foreign investments and projects in the Zibo region of the Shandong
Province. Mr. Chen obtained his Bachelor of Science from Shandong University and
has also attended the University of Southern California. He has held the
position of Vice Director of the Zibo National New & Hi‐Tech Industrial
Development Zone over ten years, where he was responsible for approving and
managing foreign investment projects. Additionally, Mr. Chen worked in the
banking sector as the General Manager of the Zibo branch of Bank of China.
Before joining SunSi, Mr. Chen held the position of Economic Development
Representative of Zibo in Australia.





Director
Independence





As a
Company with its common stock listed on the OTCBB, the Company does not have a
director independence requirement.





Family
Relationships





There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.





Involvement
in Certain Legal Proceedings




To the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present or former director, executive officer, or
employee: (1) any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (2) any conviction in a
criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); (3) being subject to any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, curities or commodities law, and the judgment
has not been revepermanently or temporarily enjoining, barring, suspending or
otherwise limiting his or her involvement in any type of business, securities or
banking activities; and (4) being found by a court of competent jurisdiction (in
a civil action), the SEC or the Commodities Futures Trading Commission to have
violated a federal or state sersed, suspended or vacated.


15


Adverse
Proceedings





There
exists no material proceeding to which any director or officer is a party
adverse to the Company or has a material interest adverse to the
Company.





Audit
Committee





We do not
have a separately-designated standing audit committee. The entire Board of
Directors performs the functions of an audit committee, but no written charter
governs the actions of the Board when performing the functions of what would
generally be performed by an audit committee.





Financial
Expert





The Board
has determined that the Company does not have a financial expert serving on its
Board as audit committee.  The Company plans to retain a financial
expert for its audit committee, once formed, as soon as
practicable.





Nominating
Committee





The Board
of Directors does not have a standing nominating committee or any committee
performing similar functions. As there are only three Directors serving on the
Board, it is the view of the Board that all Directors should participate in the
process for the nomination and review of potential Director candidates. It is
the view of the Board that the participation of all Directors in the duties of a
nominating committee ensures as comprehensive as possible a review of Director
candidates.





The Board
does not have any formal policy regarding the consideration of director
candidates recommended by shareholders; any recommendation would be considered
on an individual basis. The Board believes this is appropriate due to the lack
of such recommendations made in the past, and its ability to consider the
establishment of such a policy in the event of an increase of such
recommendations. The Board welcomes properly submitted recommendations from
shareholders and would evaluate shareholder nominees in the same manner that it
evaluates a candidate recommended by other means. Shareholders may submit
candidate recommendations by mail to the Company’s corporate office address.
With respect to the evaluation of director nominee candidates, the Board has no
formal requirements or minimum standards for the individuals that it nominates.
Rather, the Board considers each candidate on his or her own merits. However, in
evaluating candidates, there are a number of factors that the Board generally
views as relevant and is likely to consider, including the candidate’s
professional experience, his or her understanding of the business issues
affecting the Company, his or her experience in facing issues generally of the
level of sophistication that the Company faces, and his or her integrity and
reputation. With respect to the identification of nominee candidates, the Board
has not developed a formalized process. Instead, its members and the Company’s
senior management have recommended candidates whom they are aware of personally
or by reputation.





Code
of Ethics





As of May
31, 2010, we had not adopted a Code of Ethics, which would include our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.  We intend to
adopt a Code of Ethics as soon as practicable.


16


Compliance
with Section 16(A) of the Exchange Act





Section
16(a) of the Exchange Act requires our officers and directors, and persons who
own more than ten percent (10%) of a registered class of our equity securities
to file reports of ownership and changes in ownership with the SEC. Officers,
directors and greater than ten percent (10%) stockholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file. To
the best of our knowledge, based solely on review of the copies of such forms
furnished to us or amendments thereto, or written representations that no other
forms were required, we believe that all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent (10%)
stockholders were complied with during the fiscal year ended May 31, 2010. With
respect to any of our former directors, officers, and ten percent (10%)
stockholders, we do not have any knowledge of any known failures to comply with
the filing requirements of Section 16(a).





Item
11.    Executive Compensation





Compensation
Discussion and Analysis





Except
for our Chief Financial Officer, we have not historically and do not currently
compensate our executive officers, however, we reserve the right to provide
compensation at some time in the future.  Our decision to compensate
officers depends on the availability of our cash resources with respect to the
need for cash to further our business purposes.





Summary
Compensation Table





The table
below summarizes all compensation awarded to, earned by, or paid to both to our
three most highly compensated officers for all services rendered in all
capacities to us for our fiscal years ended May 31, 2010 and 2009.





SUMMARY
      COMPENSATION TABLEName
                                    and
                                    principal
                                    position
                                  
                                  Year
                                    ended
                                    May
                                    31
                                  
                                  
                                  Salary
                                    ($)
                                  
                                  
                                  Bonus
                                    ($)
                                  
                                  
                                  Stock
                                    Awards
                                    ($)
                                  
                                  
                                  Option
                                    Awards
                                    ($)
                                  
                                  
                                  Non-Equity
                                    Incentive
      Plan
                                    Compensation
                                    ($)
                                  
                                  
                                  Nonqualified
                                    Deferred
                                    Compensation
                                    Earnings
      ($)
                                  
                                  
                                  All
      Other
                                    Compensation
                                    ($)
                                  
                                  
                                  Total
                                    ($)Michel
      LaPorte,CEO
      and
                                  
                                  2009
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0Director
                                  
                                  2010
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0David
      NatanCFO
                                  
                                  2010
                                  
                                  
                                  
                                  28,100
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  $
                                  28,100


17


Outstanding
Equity Awards at Fiscal Year-End





As of May
31, 2010, the Company has no outstanding equity awards.





Compensation
of Directors





We do not
pay any compensation to our directors at this time. However, we reserve the
right to compensate our directors in the future with cash, stock, options, or
some combination of the above.





Stock
Option Plans





We did
not have a stock option plan in place as of May 31, 2010.





Compensation
Committee Interlocks and Insider Participation





The Board
of Directors does not have a standing compensation committee or any committee
performing a similar function. As there are only three Directors serving on the
Board, it is the view of the Board that all Directors should participate in the
process for the review of the Company’s executive pay practices. It is the view
of the Board that the participation of all Directors in the duties of
compensation committees ensures as comprehensive as possible a review of
executive compensation.





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





The
following table sets forth, as of August 21, 2009 certain information as to
shares of our common stock owned by (i) each person known by us to beneficially
own more than 5% of our outstanding common stock, (ii) each of our directors,
and (iii) all of our executive officers and directors as a group:





Title of Class
                    
                    Name and address of beneficial
      owner
                    
                    Number of
                      Shares of
                      Common
                      Stock
                    
                    
                    Percentage of
                      Common
                      Stock(1)Common
      Stock
                    
                    World
      Asset Management Inc.
                    
                    
                    10,300,000
                    
                    
                    
                    37.55
                    %Common
      Stock
                    
                    Michel
      G. Laporte
                    
                    
                    3,000,000
                    
                    
                    
                    10.94
                    %Common
      Stock
                    
                    Richard
      St-Julien
                    
                    
                    3,000,000
                    
                    
                    
                    10.94
                    %Common
      Stock
                    
                    Kebir
      Ratnani
                    
                    
                    0
                    
                    
                    
                    0
                    %Common
      Stock
                    
                    David
      Natan
                    
                    
                    2,000
                    
                    
                    
                    0
                    %Common
      Stock
                    
                    All
      Officers and Directors as a Group (4 persons)
                    
                    
                    
                    
                    
                    
                    21.88
                    %





(1)
            The
      percent of class is based on 27,431,000 shares of common stock issued and
      outstanding as of August 21,
2010


18


The
persons named above have full voting and investment power with respect to the
shares indicated.  Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a "beneficial owner"
of a security if he or she, directly or indirectly, has or shares the power to
vote or to direct the voting of such security, or the power to dispose of or to
direct the disposition of such security.  Accordingly, more than one
person may be deemed to be a beneficial owner of the same security. A person is
also deemed to be a beneficial owner of any security, which that person has the
right to acquire within 60 days, such as options or warrants to purchase our
common stock.





Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence





None of
our directors or executive officers, nor any proposed nominee for election as a
director, nor any person who beneficially owns, directly or indirectly, shares
carrying more than 5% of the voting rights attached to all of our outstanding
shares, nor any members of the immediate family (including spouse, parents,
children, siblings, and in-laws) of any of the foregoing persons has any
material interest, direct or indirect, in any transaction over the last two
years or in any presently proposed transaction which, in either case, has or
will materially affect us.





As of the
date of this annual report, our common stock is traded on the OTC Bulletin Board
(the “Bulletin Board”).  The Bulletin Board does not impose on us
standards relating to director independence or the makeup of committees with
independent directors, or provide definitions of independence.





Item
      14.
            Principal
      Accounting Fees and Services





Detail of
fees paid to Child, Van Wagoner & Bradshaw PLLC:





a.
            Audit
      Fees:  Aggregate fees billed for professional services rendered
      for the audit of our annual financial statements for the period ended May
      31, 2010 and 2009, were approximately $10,000 and $5,000,
      respectively.





b.
            Audit-Related
      Fees:  Fees billed for audit-related services were $12,000 and
      $3,000 for the fiscal years ended May 31, 2010 and 2009,
      respectively.





c.
            Tax
      Fees.  Fees billed for tax services were $1,800 and $800 for the
      fiscal years ended May 31, 2010 and
2009.


19


PART IV





Item
15.    Exhibits, Financial Statement Schedules





See
Exhibit Index below.





SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





SUNSI
      ENERGIES INC.By:/s/
      Michel
      G. LaporteMichel
      G. LaportePresident,
      Chief Executive Officer, and DirectorAugust
      30, 2010By:/s/
      David NatanDavid
      NatanChief
      Financial OfficerAugust
      30, 2010





In
accordance with Section 13 or 15(d) of the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:





By:/s/
      Kebir
      RatnaniKebir
      RatnaniDirectorAugust
      30, 2010/s/
      Richard St-JulienRichard
      St-JulienSecretary
      and DirectorAugust
      30, 2010


20





EXHIBIT
INDEX





Exhibit
                Number
              
              Description21.1
              
              Subsidiaries31.1
              
              Certification
      of Chief Executive Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
              
              Certification
      of Chief Accounting Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
              
              Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  200232.2
              
              Certification
      of Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002


21





Index
to Financial Statements





Audited
Financial Statements:





F-1
              
              Report
      of Independent Registered Public Accounting FirmF-2
              
              Consolidated  Consolidated
      Balance Sheets as of May 31, 2010 and 2009F-3
              
              Consolidated
      Statements of Operations for years ended May 31, 2010 and 2009, and from
      inceptionF-4
              
              Consolidated
      Statement of Stockholders’ Equity (Deficit) for years ended May 31, 2010
      and 2009, and from inceptionF-5
              
              Consolidated
      Statements of Cash Flows for years ended May 31, 2010 and 2009, and from
      inceptionF-6
              
              Notes
      to Consolidated Financial
Statements


22


REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  
                  Officers
      and Directors
                  SunSi
      Energies Inc.
                  
                  We
      have audited the accompanying consolidated balance sheets of SunSi
      Energies Inc. ( a Nevada development  stage  company)
      as of May 31, 2010 and 2009, and the related consolidated statements of
      operations,  stockholders’  equity  (deficit),
      and cash flows for the  years ended May 31, 2010 and 2009, and
      for the period from inception on January 30, 2007 through May 31,
      2010.   These consolidated financial statements are the
      responsibility of the Company’s management.  Our responsibility
      is to express an opinion on these consolidated financial statements based
      on our audits.
                  
                  We
      conducted our audits in accordance with the standards of the Public
      Company Accounting Oversight Board (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. The company is not required
      to have, nor were we engaged to perform, an audit of its internal control
      over financial reporting. Our audit included consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that are appropriate in the circumstances, but not for the purpose of
      expressing an opinion on the effectiveness of the company’s internal
      control over financial reporting. Accordingly, we express no such opinion.
      An audit also includes examining, on a test basis, evidence supporting the
      amounts and disclosures in the financial statements, assessing the
      accounting principles used and significant estimates made by management,
      as well as evaluating the overall financial statement presentation. We
      believe that our audits provide a reasonable basis for our
      opinion.
                  
                  In
      our opinion, the consolidated financial statements referred to above
      present fairly, in all material respects, the financial position of SunSi
      Energies Inc. as of May 31, 2010 and 2009, and the results of its
      operations, and its cash flows for the years ended May 31, 2010 and 2009,
      and for the period of January 30, 2007 (date of inception) through May 31,
      2010, in conformity with accounting principles generally accepted in the
      United States of America.
                  
                  The
      consolidated financial statements have been prepared assuming that the
      Company will continue as a going concern. As discussed in Note 2 to the
      consolidated financial statements, the Company has cash flow constraints,
      an accumulated deficit, and has suffered recurring losses from operations.
      These factors, among others, raise substantial doubt about the Company's
      ability to continue as a going concern. Management's plans in regard to
      these matters are also described in Note 2. The consolidated financial
      statements do not include any adjustments that might result from the
      outcome of this uncertainty.
                  
                  
                  /s/Child,
      Van Wagoner & Bradshaw, PLLC
                  Child,
      Van Wagoner & Bradshaw, PLLC
                  Certified
      Public Accountants
                  Salt
      Lake City, Utah
                  August
      30, 2010


F-1




SUNSI
      ENERGIES INC.(A
      Development Stage Company)Consolidated
      Balance Sheets(Expressed
      in US dollars)May
      31,
              
              
              May
      31,2010
              
              
              2009AssetsCurrent
      assetsCash
              
              $
              598,468
              
              
              $
              4,190Total
      current assets
              
              
              598,468
              
              
              
              4,190Total
      Assets
              
              $
              598,468
              
              
              $
              4,190Liabilities
      and Stockholders' Equity (Deficit)Current
      liabilitiesAccounts
      payable
              
              $
              149,538
              
              
              $
              143,741Accounts
      payable-related party
              
              
              0
              
              
              
              20,836Advances
      payable
              
              
              230,981
              
              
              
              0Compensation
      payable-related party
              
              
              5,671
              
              
              
              0Total
      current liabilities
              
              
              386,190
              
              
              
              164,577Stockholders'
      equity (Deficit)Common
      stock, $0.001 par value, 75,000,000 shares authorized, 27,312,500 and
      26,760,000 issued and outstanding in 2010 and 2009
      respectively
              
              
              27,312
              
              
              
              26,760Additional
      paid in capital
              
              
              1,018,764
              
              
              
              24,816Accumulated
      deficit
              
              
              (833,798
              )
              
              
              (211,963
              )Total
      stockholders' equity (deficit)
              
              
              212,278
              
              
              
              (160,387
              )Total
      Liabilities and Stockholders' Equity
              
              $
              598,468
              
              
              $
              4,190


See
      accompanying notes to financial
statements




F-2




SUNSI
      ENERGIES INC.(A
      Development Stage Company)Consolidated
      Statements of Operations(Expressed
      in US dollars)Year
      Ended
                May
      31, 2010
              
              
              Year
      Ended
                May
      31, 2009
              
              
              From
      inception
                (January
      30, 2007)
                to
      May 31, 2010Revenue
              
              $
              —
              
              
              $
              —
              
              
              $
              —OperationMining
      exploration
              
              
              —
              
              
              
              —
              
              
              
              9,440Professional
      fees
              
              
              580,981
              
              
              
              124,435
              
              
              
              705,416General
      and administrative
              
              
              40,854
              
              
              
              45,420
              
              
              
              118,942621,835
              
              
              
              169,855
              
              
              
              833,798(Loss)
              
              
              (621,835
              )
              
              
              (169,855
              )
              
              
              (833,798
              )Income
      taxes
              
              
              —
              
              
              
              —
              
              
              
              —Net
      (Loss)
              
              $
              (621,835
              )
              
              $
              (169,855
              )
              
              $
              (833,798
              )Net
      (Loss) Per Common Share Basic
              
              $
              (0.02
              )
              
              $
              (0.01
              )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES
              
              
              26,972,486
              
              
              
              26,760,000


See
      accompanying notes to financial
statements




F-3




SUNSI
      ENERGIES INC.(A
      Development Stage Company)Statement
      of Stockholders' Equity (Deficit)From
      Inception to May 31, 2010Common
      StockShares
              
              
              Amount
              
              
              Additional
                paid
      in Capital
              
              
              Accumulated
                (Deficit)
              
              
              Total
                Stockholders'
                Equity
      (Deficit)Balance
      at inception on January 30, 2007
              
              
              0
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —Issuance
      of common stock in March 2007 for cash at $0.0001 per
share
              
              
              18,000,000
              
              
              
              18,000
              
              
              
              (16,500
              )
              
              
              0
              
              
              
              1,500Issuance
      of common stock in March 2007 for cash at $0.004 per share
              
              
              4,080,000
              
              
              
              4,080
              
              
              
              12,920
              
              
              
              0
              
              
              
              17,000Issuance
      of common stock in April 2007 for cash at $0.004 per share
              
              
              4,680,000
              
              
              
              4,680
              
              
              
              14,820
              
              
              
              0
              
              
              
              18,500Loss
      to May 31, 2007
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (7,731
              )
              
              
              (7,731
              )Balance
      at May 31, 2007
              
              
              26,760,000
              
              
              
              26,760
              
              
              
              11,240
              
              
              
              (7,731
              )
              
              
              10,769Loss
      to May 31, 2008
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              (34,377
              )
              
              
              (34,377
              )Balance
      at May 31, 2008
              
              
              26,760,000
              
              
              
              26,760
              
              
              
              11,240
              
              
              
              (42,108
              )
              
              
              (4,108
              )Capital
      contribution by officer
              
              
              —
              
              
              
              —
              
              
              
              13,576
              
              
              
              0
              
              
              
              13,576Loss
      to May 31, 2009
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              (169,855
              )
              
              
              (169,855
              )Balance
      at May 31, 2009
              
              
              26,760,000
              
              
              
              26,760
              
              
              
              24,816
              
              
              
              (211,963
              )
              
              
              (160,387
              )Issuance
      of common stock in September 2009 for cash at $2.00 per
    share
              
              
              12,500
              
              
              
              12
              
              
              
              24,988
              
              
              
              0
              
              
              
              25,000Issuance
      of common stock in October 2009 for cash at $2.00 per
share
              
              
              300,000
              
              
              
              300
              
              
              
              599,700
              
              
              
              0
              
              
              
              600,000Issuance
      of common stock in February 2010 for cash at $2.00 per
    share
              
              
              37,500
              
              
              
              37
              
              
              
              74,963
              
              
              
              0
              
              
              
              75,000Issuance
      of common stock in March 2010 for cash at $2.00 per share
              
              
              50,000
              
              
              
              50
              
              
              
              99,950
              
              
              
              0
              
              
              
              100,000Issuance
      of common stock in May 2010 for cash at $2.00 per share
              
              
              152,500
              
              
              
              153
              
              
              
              304,847
              
              
              
              0
              
              
              
              305,000Costs
      of issuance
              
              
              
              
              
              
              
              
              
              
              (110,500
              )
              
              
              
              
              
              
              (110,500
              )Loss
      to May 31, 2010
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (621,835
              )
              
              
              (621,835
              )Balance
      at May 31, 2010
              
              
              27,312,500
              
              
              $
              27,312
              
              
              $
              1,018,764
              
              
              $
              (833,798
              )
              
              $
              212,278




F-4




SUNSI
      ENERGIES INC.(A
      Development Stage Company)Consolidated
      Statements of Cash Flows(Expressed
      in US dollars)Year
      Ended
                May
      31, 2010
              
              Year
      Ended
                May
      31, 2009
              
              
              From
      inception
                (January
      30, 2007)
                to
      May 31, 2010Cash
      flow from operating activities:Net
      income (loss) for the period
              
              $
              (621,835
              )
              
              $
              (169,855
              )
              
              $
              (833,798
              )Adjustments
      to reconcile net loss to net cash (used in)
      operationsChanges
      in operating assets and liabilities:Accounts
      payable
              
              
              5,797
              
              
              
              50,928
              
              
              
              149,538Accounts
      payable-related party
              
              
              (20,836
              )
              
              
              20,836
              
              
              
              —Compensation
      payable-related party
              
              
              5,671
              
              
              
              —
              
              
              
              5,671Net
      cash (used in) operating activities
              
              
              (631,203
              )
              
              
              (98,091
              )
              
              
              (678,589
              )Cash
      flows from investing activities:Net
      cash provided by (used in) investing activities
              
              
              0
              
              
              
              0
              
              
              
              0Cash
      flows from financing activities:Issuance
      of common stock
              
              
              1,105,000
              
              
              
              
              
              
              
              1,143,000Advances
      Payable
              
              
              120,481
              
              
              
              88,000
              
              
              
              120,481Capital
      contributions
              
              
              0
              
              
              
              13,576
              
              
              
              13,576Net
      cash provided by financing activities
              
              
              1,225,481
              
              
              
              101,576
              
              
              
              1,277,057NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              594,278
              
              
              
              3,485
              
              
              
              598,468Cash
      and cash equivalents at beginning of period
              
              
              4,190
              
              
              
              705
              
              
              
              —CASH
      & CASH EQUIVALENTS AT END OF PERIOD
              
              $
              598,468
              
              
              $
              4,190
              
              
              $
              598,468SUPPLEMENTAL
      NON-CASHFinancing
      actiivityAccrual
      of cost of issuance in advances payable
              
              
              110,500
              
              
              $
              —
              
              
              
              110,500Supplemental
      disclosures of cash flow informationCash
      paid during period forInterest
              
              $
              —
              
              
              $
              —
              
              
              $
              —Income
      taxes
              
              $
              —
              
              
              $
              —
              
              
              $
              —




F-5





SUNSI
ENERGIES INC.


(A
Development Stage Company)
 Notes
to Consolidated financial statements
 May
31, 2010
 (Expressed
in U.S. dollars)
 1.
              NATURE
      AND CONTINUANCE OF OPERATIONS
 
 The
Company was incorporated in the State of Nevada on January 30,
2007.  The Company is a Development Stage Company as defined by ASC
Topic 915.
 
 2.
              GOING
      CONCERN
 
 The
Company’s consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has had no revenues and has generated losses from
operations.
 
 The
Company has incurred losses since inception resulting in an accumulated deficit
of $833,798. Its ability to continue as a going concern is dependent upon the
ability of the Company to generate profitable operations in the future and/or to
obtain the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due. Management intends
to address the going concern issue by funding future operations through the sale
of equity capital and by director loans, if needed.
 
 3.
              SIGNIFICANT
      ACCOUNTING POLICIES
 
 Basis of
Presentation
 
 The
consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States
and are expressed in U.S. Dollars. The Company’s fiscal year-end is May 31. The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary SunSi Energies Hong Kong Ltd., which had no activity
through May 31, 2010 other than incorporation, legal and professional fees and
start-up costs.
 
 Use of
Estimates
 
 The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
 Financial
Instruments
 
 Cash is
the only asset on the Company’s balance sheet. The carrying value of cash
approximates its fair value because of the short-term maturity of these
instruments.
  F-6
 
 SUNSI
ENERGIES INC.
 (A
Development Stage Company)
 Notes
to Consolidated financial statements
 May
31, 2010
 (Expressed
in U.S. dollars)
 3.
              SIGNIFICANT
      ACCOUNTING POLICIES (continued)
 
 Concentration of Credit
Risk
 
 Financial
instruments that potentially subject the Company to credit risk consist
principally of cash.  Cash is deposited with a high quality credit
institution. On occasion, cash balances exceed the FDIC limit.
 
 Income
Taxes
 
 Potential
benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted FASB ASC 740 as of
its inception. Pursuant to FASB ASC 740 the Company is required to compute tax
asset benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in the financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.
 
 Basic and Diluted Net Income
(Loss) Per Share
 
 The
Company computes net income (loss) per share in accordance with ASC 260
“Earnings per Share”. ASC 260 requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common stockholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is
anti-dilutive.
 
 Revenue
Recognition
 
 The
Company is a development stage entity and has not recognized any revenues since
inception. The Company is in the process of acquiring a facility in China that
produces trichlorosilane (“TCS”) and certain byproducts. In the event this
acquisition is successfully consummated the Company will generate revenues from
the sales of TCS and certain byproducts. Revenue will be recognized when all of
the following elements are satisfied (i) there are no uncertainties regarding
customer acceptance;(ii) there is persuasive evidence that an agreement exists;
(iii) delivery has occurred; (iv) legal title to the products has transferred to
the customer; (v) the sales price is fixed or determinable; and (vi)
collectability is reasonably assured.
 
 4.
              THE
      EFFECT OF RECENTLY ISSUED ACCOUNTING
STANDARDS
 
 Statement
of Financial Accounting Standards ("SFAS") SFAS No. 165 (ASC Topic 855),
"Subsequent Events", SFAS No. 166 (ASC Topic 810), "Accounting for Transfers of
Financial Assets-an Amendment of FASB Statement No. 140", SFAS No. 167 (ASC
Topic 810), "Amendments to FASB Interpretation No. 46 (R)", and SFAS No. 168
(ASC Topic 105), "The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles-a replacement of FASB Statement No.
162" were recently issued. SFAS No. 165, 166, 167, and 168 have no current
applicability to the Company or their effect on the financial statements would
not have been significant
  F-7
 
 SUNSI
ENERGIES INC.
 (A
Development Stage Company)
 Notes
to Consolidated financial statements
 May
31, 2010
 (Expressed
in U.S. dollars)
 Accounting
Standards Update ("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair
Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605),
Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985),
Certain Revenue Arrangements that include Software Elements, and various other
ASU's No. 2009-2 through ASU No. 2010-24 which contain technical corrections to
existing guidance or affect guidance to specialized industries or entities were
recently issued. These updates have no current applicability to the Company or
their effect on the financial statements would not have been
significant.
 
 5.
              ADVANCES
      PAYABLE
 
 During
the period the Company received advances and accruals amounting to $230,981 from
two non-affliated stockholders to help fund the operations of the Company until
proceeds were received from the Company’s Stock Offering. The advances were made
to the Company on an interest free basis. Therefore no interest has been accrued
in the Company’s financial statements.
 
 6.
              INCOME
      TAXES
 
 Potential
benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has incurred a net operating
loss of $833,798, which expires in 2030. Pursuant to ASC 740 the Company is
required to compute tax asset benefits for net operating losses carried forward.
Potential benefit of net operating losses have not been recognized in these
financial statements because the Company cannot be assured it is more likely
than not it will utilize the net operating losses carried forward in future
years.
 
 The
components of the net deferred tax asset at May 31, 2010, the statutory tax
rate, the effective tax rate and the elected amount of the valuation allowance
are indicated below:
 
 May
      31, 2010$Net
      Operating Loss
              
              
              833,798Statutory
      Tax Rate
              
              
              35
              %Effective
      Tax Rate
              
              
              —Deferred
      Tax Asset
              
              
              291,829Valuation
      Allowance
              
              
              (291,829
              )Net
      Deferred Tax Asset
              
              
              —
 
 The
Company follows the provisions of uncertain tax positions as addressed in FASB
ASC 740-10-65-1. The Company recognized approximately no increase in the
liability for unrecognized tax benefits.
 
 The
Company has no tax positions at May 31, 2010 and 2009 for which the ultimate
deductibility is highly certain but for which there is uncertainty about the
timing of such deductibility. The Company recognizes interest accrued related to
unrecognized tax benefits in interest expense and penalties in operating
expenses. No such interest or penalties were recognized during the periods
presented. The Company had no accruals for interest and penalties at May 31,
2010 or 2009.
  F-8
 
 SUNSI
ENERGIES INC.
 (A
Development Stage Company)
 Notes
to Consolidated financial statements
 May
31, 2010
 (Expressed
in U.S. dollars)
 7.
              STOCKHOLDERS’
      EQUITY
 
 The
Company is authorized to issue 75 million shares of common stock at a par value
of $0.001 and had 27,312,500 shares of common stock issued and outstanding as of
May 31, 2010. On March 24, 2009, the Board of Directors approved a 12 for 1
forward stock split. The split has been reflected in the consolidated financial
statements for all periods presented.
 
 The
Company has been conducting a private placement of its common stock since
September 10, 2009 at a price of $2.00 per share, with a maximum issuance of
8,000,000 shares (‘Offering’). During the year, the Company accepted
subscription agreements from investors and correspondingly issued 552,500 shares
of its common stock pursuant to the Offering, and received $1,105,000 in gross
proceeds. The cost of this issuance was $110,500.
 
 8.
              RELATED
      PARTY TRANSACTIONS
 
 The
Company owes $5,671 to its Chief Financial Officer for compensation and
expenses. During the year $28,100 was paid to his entity.
 
 9.
              COMMITMENTS
 
 SunSi
Energies Inc. entered into various engagement agreements for advisory and
consulting services on a non-exclusive basis to obtain equity capital. In the
event that the Company completes a financing from a funding source provided by
one of the consultants, then such consultant will receive a finders or referral
fee at closing ranging from seven percent (7%) to ten percent (10%) of the
amount received by the Company. The total financing sought is in the amount of
$16,000,000 in equity. The maximum potential amount of fee paid that can be paid
amounts to $1,600,000. These fees have been accrued at May 31, 2010. The terms
and condition of financing are subject to Company approval.
 
 On
November 10, 2009 and February 9, 2010 the Company entered in agreements with
its Director of Business Development and Chief Financial Officer, respectively,
to pay each of these individuals $60,000 per year plus any documented out of
pocket business expenses.
 
 10.
              OTHER
      EVENTS
 
 The
Company incorporated on April 7, 2009 a wholly-owned subsidiary in Hong Kong in
the name of “SunSi Energies Hong Kong Limited” (“Sunsi HK”) and the Company
entered into two (2) Joint Venture Agreements with a Chinese Company
respectively on June 18 and June 19, 2009. SunSi Energies Hong Kong had no
activity from the date of incorporation through August 30, 2010 other than
incorporation, legal and professional fees and start-up costs.
 
 In June
2009, subject to the successful completion of due diligence and other
conditions, SunSi Energies Hong Kong committed to invest a total of $10,000,000
in exchange for 90% of the capital stock in the newly formed PRC Joint Venture
Company which would have received all of the assets, expertise and technology of
an existing Trichlorosilane (TSC) production facility in Zibo, China, as well as
its affiliated trucking and transportation company.  On August 30,
2010, concurrent with the acquisition of Baokai (see Subsequent Events), the
Company discontinued its efforts to purchase the ZBC production facility in
Zibo, China.
  F-9
 
 SUNSI
ENERGIES INC.
 (A
Development Stage Company)
 Notes
to Consolidated financial statements
 May
31, 2010
 (Expressed
in U.S. dollars)
 10.
              OTHER
      EVENTS (Continued)
 
 Currently,
SunSi Energies is in the process of evaluating additional acquisition
opportunities in China including one candidate with high growth potential. One
of the targeted facilities comes with an off-take agreement for the sale of over
20,000 MT of TCS per year to one of China’s largest polysilicon
makers.
 
 11.
              SUBSEQUENT
      EVENTS
 
 Subsequent
to May 31, 2010 the Company has repaid $161,000 of the advances payable
discussed in Note 5.
 
 Subsequent
to May 31, 2010 the Company has received $262,000 from the sale of 131,000
shares of comma stock.
  On April
29th 2010, SunSi HK signed a definitive agreement to acquire 90% of Zibo Baokai
Commerce and Trade Co. (“Zibo Baokai”). At the date of this report, the company
is waiting for the issuance of a business license in order to consummate this
acquisition.  All other terms necessary to complete the acquisition
were completed on July 31, 2010, when the Articles of Association and Joint
Venture Agreement were signed. When completed, this acquisition will enable
SunSi to generate revenue and to create a presence within the Chinese and other
international TCS markets.
 On August
3rd 2010, SunSi HK signed a letter of intent with Wendeng He Xie Silicon Co.
Ltd. (“Wendeng”) for the acquisition of 60% of its existing 20,000 MT TCS
facility, plus an increase of Wendeng’s capacity by an additional 40,000
MT.
 F-10