UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





FORM
10-Q





x
            Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
quarterly period ended February 28, 2010





 ̈
            Transition
      Report pursuant to 13 or 15(d) of the Securities Exchange Act of
      1934





For the
transition period  __________ 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)
                
                (IRS
      Employer Identification
No.)





45
      Main Street, Suite 309
              Brooklyn,
      New York(Address
      of principal executive offices)





646-205-0291(Issuer’s
      telephone number)





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days x
Yes    o No





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 whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.





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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  ̈
Yes   x No





State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 27,110,000 common shares as of April 12,
2010.





TABLE
OF CONTENTS





PAGEPART
      I - FINANCIAL INFORMATION
                          F-1ITEM
      1
                          FINANCIAL
      STATEMENTS
                          F-1ITEM
      2
                          MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                          3ITEM
      3
                          QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                          6ITEM
      4
                          CONTROLS
      AND PROCEDURES
                          6PART
      II - OTHER INFORMATION
                          7ITEM
      1
                          LEGAL
      PROCEEDINGS
                          7ITEM
      1A
                          RISK
      FACTORS
                          7ITEM
      2
                          UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
                          7ITEM
      3
                          DEFAULT
      UPON SENIOR SECURITIES
                          7ITEM
      4
                          [REMOVED
      AND RESERVED]
                          7ITEM
      5
                          OTHER
      INFORMATION
                          7ITEM
      6
                          EXHIBITS
                          8


2


SUNSI
ENERGIES INC.





PART
1 - FINANCIAL INFORMATION





ITEM
      1.
            INTERIM
      CONSOLIDATED FINANCIAL
STATEMENTS


F-1


INDEX TO
INTERIM CONSOLIDATED FINANCIAL STATEMENTS





SUNSI
ENERGIES INC.





PageInterim
      Unaudited Consolidated Financial Statements:Consolidated
      Balance Sheet as of May 31, 2009; and Unaudited Interim Balance Sheet as
      of February 28, 2010;
                  F-3Interim
      Unaudited Consolidated Statement of Operations and Comprehensive (Loss)
      for the Three Months and for the Nine Months ended February 28, 2010 and
      February 28, 2009 and from inception to February 28, 2010;
                  F-4Interim
      Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended
      February 28, 2010 and February 28, 2009 and from inception to February 28,
      2010;
                  F-5Notes to Interim Unaudited
      Consolidated Financial Statements
                  F-6
      to F-9


F-2


SUNSI
ENERGIES INC.


(A
Development Stage Company)


Interim
Consolidated Balance Sheets





Current
      assets:Cash
                        
                        $
                        357,679
                        
                        
                        $
                        4,190Total
      current assets
                        
                        
                        357,679
                        
                        
                        
                        4,190Total
      assets
                        
                        $
                        357,679
                        
                        
                        $
                        4,190LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)Current
      liabilitiesAccounts
      payable
                        
                        $
                        134,379
                        
                        
                        $
                        143,741Advances
      payable
                        
                        
                        225,981
                        
                        
                        
                        -Accounts
      payable-related party
                        
                        
                        26,291
                        
                        
                        
                        20,836Total
      current liabilities
                        
                        
                        386,651
                        
                        
                        
                        164,577Stockholders’
      equity (Deficit)Common
      stock, $0.001 par value, 75,000,000 shares authorized, 27,110,000 issued
      and outstanding at February 28, 2010, 26,760,000 at May 31,
      2009
                        
                        
                        27,110
                        
                        
                        
                        26,760Additional
      paid in capital
                        
                        
                        654,466
                        
                        
                        
                        24,816Accumulated
      deficit
                        
                        
                        (710,548
                        )
                        
                        
                        (211,963
                        )Total
      stockholder’s equity (deficit)
                        
                        
                        (28,972
                        )
                        
                        
                        (160,387
                        )Total
      liabilities and stockholders’ equity (Deficit)
                        
                        $
                        357,679
                        
                        
                        $
                        4,190





The
accompanying notes make up an integral part of these financial
statements.


F-3


SUNSI
ENERGIES INC.


(A
Development Stage Company)


Interim
Consolidated Statements of Operations and Comprehensive (Loss)
(Unaudited)





From
                      InceptionThree Months
                    
                    
                    Nine Months
                    
                    
                    (JanuaryEnded
                    
                    
                    Ended
                    
                    
                    30, 2007)February 28,
                    
                    
                    February 28,
                    
                    
                    to February
      28,2010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009
                    
                    
                    2010REVENUE
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -OPERATIONMining
      exploration
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    9,440Professional
      fees
                    
                    
                    52,820
                    
                    
                    
                    -
                    
                    
                    
                    486,558
                    
                    
                    
                    -
                    
                    
                    
                    610,993General
      and administrative
                    
                    
                    5,545
                    
                    
                    
                    1,971
                    
                    
                    
                    12,027
                    
                    
                    
                    14,281
                    
                    
                    
                    90,11558,365
                    
                    
                    
                    1,971
                    
                    
                    
                    498,585
                    
                    
                    
                    14,281
                    
                    
                    
                    710,548(Loss)
                    
                    
                    (58,365
                    )
                    
                    
                    (1,971
                    )
                    
                    
                    (498,585
                    )
                    
                    
                    (14,281
                    )
                    
                    
                    (710,548
                    )Income
      tax benefit
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      (Loss)
                    
                    $
                    (58,365
                    )
                    
                    $
                    (1,971
                    )
                    
                    $
                    (498,585
                    )
                    
                    $
                    (14,281
                    )
                    
                    $
                    (710,548
                    )Net
      (Loss) Per Common ShareBasic
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.00
                    )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES
                    
                    
                    27,075,278
                    
                    
                    
                    26,760,000
                    
                    
                    
                    26,908,764
                    
                    
                    
                    26,760,000





The
accompanying notes are an integral part of these consolidated financial
statements.


F-4


SUNSI
ENERGIES INC.


(A
Development Stage Company)


Interim
Consolidated Statements of Cash Flows (Unaudited)





Nine
                    Months
                    Ended
                    February
                    28, 2010
                  
                  
                  Nine
                    Months
                    Ended
                    February
                    28, 2009
                  
                  
                  From
                    Inception
                    (January
                    30, 2007)
                    to
                    February
                    28, 2010OPERATING
      ACTIVITIESNet
      income (loss) for the period
                  
                  $
                  (498,585
                  )
                  
                  $
                  (14,281
                  )
                  
                  $
                  (710,548
                  )Adjustments
      to reconcile net loss to net cash provided by (used in)
      operations
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Changes
      in operating assets and liabilities:Accounts
      payable
                  
                  
                  (9,362
                  )
                  
                  
                  -
                  
                  
                  
                  134,379Accounts
      payable-related party
                  
                  
                  5,455
                  
                  
                  
                  15,500
                  
                  
                  
                  26,291Net
      cash provided by (used in) operating
                  
                  
                  (502,492
                  )
                  
                  
                  1,219
                  
                  
                  
                  (549,878
                  )Investing
      Activities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      cash used in investing activities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Financing
      ActivitiesIssuance
      of common stock
                  
                  
                  700,000
                  
                  
                  
                  -
                  
                  
                  
                  738,000Advances
      Payable
                  
                  
                  155,981
                  
                  
                  
                  
                  
                  
                  
                  155,981Capital
      contributions
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  13,576Net
      cash provided by financing activities
                  
                  
                  855,981
                  
                  
                  
                  -
                  
                  
                  
                  907,557NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                  
                  
                  353,489
                  
                  
                  
                  1,219
                  
                  
                  
                  357,679Cash
      and cash equivalents at beginning of period
                  
                  
                  4,190
                  
                  
                  
                  705
                  
                  
                  
                  0CASH
      & CASH EQUIVALENTS AT END OF PERIOD
                  
                  $
                  357,679
                  
                  
                  $
                  1,924
                  
                  
                  $
                  357,679Supplemental
      non-cash financing activityAccrual
      of finder's fee in advances payable
                  
                  $
                  70,000
                  
                  
                  $
                  -
                  
                  
                  $
                  70,000Supplemental
      disclosures of cash flow informationCash
      paid during period forInterest
                  
                  
                  -
                  
                  
                  
                  -Income
      taxes
                  
                  
                  -
                  
                  
                  
                  -





The
accompanying notes are an integral part of these consolidated financial
statements.


F-5


SUNSI
ENERGIES INC.


(A
Development Stage Company)


Notes
to Unaudited Consolidated Financial Statements


For
Nine Months Ended February 28, 2010





1.     CONDENSED
FINANCIAL STATEMENTS





The
accompanying consolidated interim financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at February 28, 2010
and for all periods presented have been made.





Certain
information and footnote disclosures normally included in consolidated financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's May 31, 2009 audited consolidated financial statements. The results of
operations for the periods ended February 28, 2010 and February 28, 2009 are not
necessarily indicative of the operating results for the full years.





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 $710,548. 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 February 28, 2010 other than incorporation, legal 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 Unaudited Consolidated Financial Statements


For
Nine Months Ended February 28, 2010





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.





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.





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.





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. 2010-11 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.


F-7


SUNSI
ENERGIES INC.


(A
Development Stage Company)


Notes
to Unaudited Consolidated Financial Statements


For
Nine Months Ended February 28, 2010





5.     ADVANCES
PAYABLE





During
the period from June 1, 2009 to February 28, 2010 the Company received advances
and accruals amounting to $225,981 from two non-affliated stockholders to help
fund the operations of the Company until proceeds were received from the
Company’s Stock Offering. See notes to the Unaudited Consolidated Financial
Statements, Note 7 Stockholders’ Equity. The advances were made to the Company
on an interest free basis. Therefore no interest has been accrued in the
Company’s financial statements. These advances are expected to be repaid as of
June 30, 2010.





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 $710,548, which expires in 2029. 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 February 28, 2010, the statutory tax
rate, the effective tax rate and the elected amount of the valuation allowance
are indicated below:





February 28, 2010Net
      Operating Loss Since Inception
                      
                      $
                      710,548Statutory
      Tax Rate
                      
                      
                      35
                      %Effective
      Tax Rate
                      
                      
                      —Deferred
      Tax Asset
                      
                      
                      248,692Valuation
      Allowance
                      
                      
                      (248,692
                      )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 February 28, 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
February 28, 2010 or 2009.


F-8


SUNSI
ENERGIES INC.


(A
Development Stage Company)


Notes
to Unaudited Consolidated Financial Statements


For
Nine Months Ended February 28, 2010





7.     STOCKHOLDERS’
EQUITY





The
Company is authorized to issue 75 million shares of common stock at a par value
of $0.001 and had 27,110,000 shares of common stock issued and outstanding as of
February 28, 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 quarter ended February 28, 2010, the Company accepted
subscription agreements from investors and correspondingly issued 37,500 shares
of its common stock pursuant to the Offering, and received $75,000 in gross
proceeds. Since the start of the offering through the period ended February 28,
2010, the Company has received proceeds of $700,000.





On
December 18, 2009, the Company entered into a subscription agreement for the
sale of 2,500,000 shares of its common stock in the Offering with one accredited
investor for a total receivable of $5,000,000. As of April 12, 2010, the Company
has not yet received the amount of $5,000,000, and has not issued such shares.
However, the Company believes that the $5,000,000 is collectible and will be
funded by the Investor.





8.     RELATED
PARTY TRANSACTIONS





At
February 28, 2010, the Company owes $20,836 to an entity owned by the Company’s
Controller.  The amount owed is for expenses paid on behalf of the
Company. The Company also owes $5,455 to its CFO for compensation and
expenses.





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 will be paid at closing directly from the
proceeds of the financing. The terms and condition of financing are subject to
Company approval.





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 February 28, 2010 other than
incorporation, legal fees and start-up costs.  Upon completion and
satisfaction of due diligence SunSi Energies Hong Kong has 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 will have received all of the assets,
expertise and technology of an existing Trichlorosilane (TCS) production
facility in Zibo, China, as well as its affiliated trucking and transportation
company, which delivers TCS from the production facility to existing clients
within China. When the transaction closes, the Company will be engaged in the
production of TCS, a chemical that is primarily used in the production of
polysilicon, with a current production capacity of 25,000 metric tons of TCS per
year. The Company has substantially completed its financial and operational due
diligence on the facility and; is awaiting completion of certain deal
requirements and documentation necessary to close the transaction. This process
has taken much longer that originally anticipated by management.





Pending
the closing of the transaction described above, on February 1, 2010 SunSi HK
executed a Definitive Distribution Agreement with the same TCS producer that
entitles SunSi the exclusive rights to distribute outside of China the TCS
produced at the facility. This will enable SunSi to start earning revenues from
potential European and North American clients. No revenues had been generated
from the sale of TCS through the date of this report.





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
maker.




11.   SUBSEQUENT
EVENTS
 
 The
Company has evaluated subsequent events from the balance sheet through the date
the financial statements were issued, and determined there are no events to
disclose.


F-9


Item
2.     Management’s Discussion and Analysis of
Financial Condition and Results of Operations
 
 Forward-Looking
Statements
 
 Certain
statements in this quarterly 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: our acquisition strategy,
the trichlorosilane market, the solar energy market, manufacturing environment
in China, 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.
 
 Overview
 
 The
Company’s business plan is to acquire TCS production facilities and
distribution rights in China.  SunSi’s goal is to acquire and develop
a portfolio of high quality TCS 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 photovoltaic (PV) energy producing
panels. To date the company has not completed the acquisition of any TCS
facilities
 
 Acquisition
of TCS Production Facilities.
 
 The
Company plans to base its Asian operations through its 100% owned subsidiary
SunSi Energies Hong Kong, Inc., a Hong Kong-based company (“SunSi HK”) which
currently has no operations but has entered into a joint venture agreement to
purchase 90% of Zibo Baoyun Chemical Plant (“ZBC”) in Zibo, China, a major TCS
producer, as well as its related transportation company, the Zibo Baoxin
Transportation Co Ltd. (“ZBT”), which transports the finished TCS product from
the ZBC TCS manufacturing facility to clients across China.  The ZBC
facility in Zibo currently has a production capacity of 25,000 metric tons (MT)
of TCS annually.
 
 The terms
of the joint venture agreement require the Company to raise and pay
$10,000,000 for the acquisition of the ZBC and ZBT assets and to expand the
current ZBC production capacity to 45,000 MT of TCS. Additionally the Company
intends to raise an additional $6,000,000 to make other potential TCS
manufacturing facility acquisitions and for general corporate purposes. As of
February 28, 2010 the Company had received approximately $700,000 from the
private placement of its equity-See Note 7 Stockholders’ Equity to the Company’s
Unaudited Consolidated Financial Statements, and has a $5,000,000 stock
subscription receivable that has been outstanding since December 2009. There can
be no assurances that the Company will be able to raise enough proceeds to
consummate the purchase of ZBC if the closing conditions are met, nor can there
be any assurances that the $5,000,000 subscription receivable can be
collected.  The Company has substantially completed its financial and
operational due diligence on the facility and; is awaiting completion of certain
deal requirements and documentation necessary to close the transaction. This
process has taken much longer than originally anticipated by
management.
  3
  Due to
the length of time that has passed since the signing of the definitive agreement
and the amounts of funds that have been raised by the Company’s offering, there
can be no assurances that the transaction will close if the Company wants to
proceed with the transaction. Pending the closing of the transaction described
above, on February 1, 2010 SunSiHK executed a Definitive Distribution Agreement
with ZBC that entitles SunSi the exclusive rights to distribute outside of China
the TCS produced at the facility. This will enable SunSi to start earning
revenues from potential European and North American clients. SunSi HK will be
the exclusive distributor of ZBC’s production for sales outside of the People’s
Republic of China for an initial period of 18 months with a subsequent 18 months
term available at SunSi HK’s option. No revenues have been generated from the
sale of TCS through the date of this report.
 
 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.
 
 Results
of Operations for the Three Months ended February 28, 2010 and
2009
 
 Revenues.
 
 We did
not earn any revenues for the three months ended February 28, 2010 and 2009, or
from inception through the period ending February 28, 2010. With respect to the
acquisition of ZBC, we do not anticipate earning any revenues until such time
that we are able to consummate the acquisition. Pending the outcome of the
acquisition process on ZBC, we expect to earn revenues from our Distribution
agreement in the third quarter of 2010.
 
 Operating Expenses.
 
 We
incurred operating expenses for the three months ended February 28, 2010 and
February 28, 2009 in the amounts of $58,365 and $1,971, respectively. Operating
expenses for the three months ended February 28, 2010 included general and
administrative expenses in the amount of $5,545 and professional fees expenses
in the amount of $52,820. Operating expenses for the three months ended February
2009 included general and administrative expenses in the amount of
$1,971.  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, as compared with the operating
expenses required by our previous business plan of maintaining an option for
claims in the mineral mining industry.
 
 Net
(Loss).
 
 We
incurred a net loss for the three months ended February 28, 2010 and 2009 in the
amounts of $58,365 and $1,971, respectively. Our losses for all periods are
attributable to operating expenses and our lack of revenue.
 
 Results
of Operations for the Nine Months ended February 28, 2010 and 2009
 
 Revenues.
  We did
not earn any revenues for the nine months ended February 28, 2010 and 2009, or
from inception through the period ending February 28, 2010.  Pending
the outcome of the acquisition process on ZBC, we expect to earn revenues from
our Distribution Agreement in the third quarter of 2010.
 
 Operating
Expenses.
  We
incurred operating expenses for the nine months ended February 28, 2010 and 2009
in the amounts of $498,585 and $14,281, respectively. Operating expenses for the
nine months ended February 28, 2010 included general and administrative expenses
in the amount of $12,027 and professional fees expenses in the amount of
$486,558. Operating expenses for the nine months ended February 28, 2009
included general and administrative expenses in the amount of
$14,281.  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, as compared with the operating
expenses required by our previous business plan of maintaining an option for
claims in the mineral mining industry.
  4
  Net
(Loss).
  We
incurred a net loss for the nine months ended February 28, 2010 and 2009 in the
amounts of $498,585 and $14,281 respectively. Our losses for all periods are
attributable to operating expenses and our lack of revenue.
 
 Liquidity
and Capital Resources
 
 The
accompanying consolidated financial statements have been prepared on a
going-concern basis, which contemplates the realization of assets and
satisfaction of liabilities and other commitments in the normal course of
business.
 
 As of
February 28, 2010, we had cash of $357,679  as our current assets and
current liabilities of $386,651. We therefore had a working capital deficit of
$28,972 as of February 28, 2010.
 
 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, 2010. 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 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.
 
 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. 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.
 
 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 February 28, 2010 other than incorporation, legal fees
and start-up costs.
  5
  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.
 
 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
February 28, 2010, there were no off-balance sheet arrangements.
 
 Item
3.     Quantitative and Qualitative Disclosures About
Market Risk
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item
4.     Controls and Procedures
 
 Disclosure
Controls and Procedures. Our management has evaluated, under the
supervision and with the participation of our chief executive officer and chief
financial officer, the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this report pursuant to Rule 13a-15(b)
and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”). Based
on that evaluation, our chief executive officer and chief financial officer have
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures are effective in ensuring that information
required to be disclosed in our Exchange Act reports is (1) recorded, processed,
summarized and reported in a timely manner, and (2) accumulated and communicated
to our management, including our chief executive officer and chief financial
officer, as appropriate to allow timely decisions regarding required
disclosure.
  6
  Changes
in Internal Control Over Financial Reporting. There have been no changes
in our internal control over financial reporting that occurred during the period
covered by this report that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.
 
 PART
II – OTHER INFORMATION
 
 Item
1.     Legal Proceedings
  None.
 
 Item
1A:  Risk Factors
  A smaller
reporting company is not required to provide the information required by this
Item.
  Item
2.     Unregistered Sales of Equity Securities and Use
of Proceeds
  In
September 2009 the Company commenced a private placement of its common stock at
a price of $2.00 per share (“Offering”).
 
 On
December 18, 2009, the Company entered into a subscription agreement pursuant to
the Offering for the sale of 2,500,000 shares of its common stock in the
Offering to one accredited investor for a total receivable of $5,000,000. As of
April 12, 2010 the Company has not yet received the subscription amount of
$5,000,000 and not issued the shares.
 
 On
February 16, 2010, the Company accepted subscription agreements pursuant to the
Offering from investors and correspondingly issued 12,500 shares of its common
stock for receipt of $25,000.
 
 On
February 24, 2010, the Company has accepted subscription agreements pursuant to
the Offering from investors and correspondingly issued 25,000 shares of its
common stock for receipt of $50,000.
 
 The offer
and sale of the securities above were effected in reliance on the exemptions for
sales of securities not involving a public offering, as set forth in Sections
4(2) of the Securities Act of 1933 and/or Rule 506 of Regulation D adopted
thereunder.
  Item
3.     Defaults upon Senior Securities
  None
  Item
4.     [REMOVED AND RESERVED]
 
 
 Item
5.     Other Information
 
 None.
  7
  Item
6.      Exhibits
 
 Exhibit
                    Number
                  
                  DescriptionofExhibit31.1
                  
                  Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  200231.2
                  
                  Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  200232.1
                  
                  Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002
 
 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. LaportePresident,
      Chief Executive Officer, and DirectorApril
      13, 2010By:/s/David
      NatanChief
      Financial OfficerApril
      13, 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
      RatnaniDirectorApril
      13, 2010/s/Richard
      St-JulienSecretary
      and DirectorApril
      13, 2010
  8