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 1934For the quarterly period ended August 31, 2009o
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934For 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  o  No  o





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





o Large accelerated filer
o Accelerated filero 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). x Yes   o No





State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 26,760,000 common shares as of August 31, 2009.













PageItem 1:
Financial Statements

3Item 2:
Management’s Discussion and Analysis of Financial Condition and Results of Operations

4Item 3:
Quantitative and Qualitative Disclosures About Market Risk

6Item 4T:
Controls and Procedures

6Item 1:
Legal Proceedings

7Item 1A:
Risk Factors

7Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds

7Item 3:
Defaults Upon Senior Securities

7Item 4:
Submission of Matters to a Vote of Security Holders

7Item 5:
Other Information

7Item 6:
Exhibits

7














2
 Table of Contents





PART I - FINANCIAL INFORMATION





Item 1.       Financial Statements





Our unaudited financial statements included in this Form 10-Q are as follows:F-1
Interim Unaudited Consolidated Balance Sheets as of August 31, 2009 and May 31, 2009;F-2
Interim Unaudited Consolidated Statement of Operations and comprehensive (Loss) for the three  months ended August 31, 2009 and August 31, 2008 and from inception to August 31, 2009;F-3
Interim Unaudited Consolidated Statements of Cash Flows for the Three Months Ended August 31, 2009 and August 31, 2008 and from inception to August 31, 2009;F-4
Notes to Interim Unaudited Consolidated Financial Statements;








These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating
results for the interim period ended August 31, 2009 are not necessarily indicative of the results that can be expected for the full year.









3
 Table of Contents





SUNSI ENERGIES INC.


(A Development Stage Company)


Interim Consolidated Balance Sheets





August 31, 2009
(Unaudited)


May 31, 2009Current assets:Cash

$
12,277


$
4,190Total current assets


12,277



4,190Total assets

$
12,277


$
4,190LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current liabilities:Accounts payable

$
92,266


$
143,741Advances payable


221,901Accounts payable-related party


20,836



20,836Total current liabilities


335,003



164,577Stockholders’ equity (Deficit)Common stock, $0.001 par value, 75,000,000  shares
authorized, 26,760,000 issued and outstanding at
August 31 and May 31, 2009


26,760



26,760Additional paid in capital


24,816



24,816Accumulated deficit


(374,302
)


(211,963
)Total stockholder’s equity (deficit)


(322,726
)


(160,387
)Total liabilities and stockholders' equity (Deficit)

$
12,277


$
4,190




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





F-1
 Table of Contents




SUNSI ENERGIES INC.


(A Development Stage Company)


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








Three Months
Ended August 31,
2009


Three Months
Ended August
31, 2008


From inception
(January 30,
2007) to
August 31,
2009REVENUE

$
-


$
-


$
-OPERATIONMining exploration


-



-



9,440Professional fees


158,406



-



282,841General and administrative


3,933



5,747



82,021162,339



5,747



374,302(Loss)


(162,339
)


(5,747
)


(374,302
)Income tax benefit


-



-



-Net (Loss)

$
(162,339
)

$
(5,747
)

$
(374,302
)Net (Loss) Per Common Share Basic and Diluted

$
(0.01
)

$
(0.00
)WEIGHTED AVERAGE NUMBER OF
COMMON SHARES


26,760,000



26,760,000





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





F-2
 Table of Contents





SUNSI ENERGIES INC.


(A Development Stage Company)


Interim Consolidated Statements of Cash Flows (Unaudited)








Three Months
Ended August
31, 2009


Three Months
Ended August
31, 2008


From Inception
(January 30,
2007) to August
31, 2009OPERATING ACTIVITIESNet income (loss) for the period

$
(162,339
)

$
(5,747
)

$
(374,302
)Adjustments to reconcile net loss  to net cash provided
by (used in) operations


-



-



-Changes in operating assets and liabilities:Accounts payable


51,475



5,481



92,266Accounts payable-related party


-



-



20,836Net cash provided by (used in) operating activities


213,814



(266
)


(261,200
)Investing Activities


-



-



-Net cash used in investing activities


-



-



-Financing ActivitiesIssuance of common stock


-



-



38,000Advances Payable


221,901







221,901Capital contributions


-



-



13,576Net cash provided by financing activities


221,901



-



273,477NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS


8,087



(266
)


12,277Cash and cash equivalents at beginning of period


4,190



705



0CASH & CASH EQUIVALENTS AT END OF
PERIOD

$
12,277


$
439


$
12,277Supplemental disclosures of cash flow informationCash paid during period forInterest

$
-


$
-


$
-Income taxes

$
-


$
-


$
-




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





F-3
 Table of Contents





SUNSI ENERGIES INC.


(A Development Stage Company)


Notes to Unaudited Consolidated financial statements


For Three Months Ended August 31, 2009


(Expressed in U.S. dollars)





NOTE 1 - CONDENSED FINANCIAL STATEMENTS





The accompanying consolidated 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 August 31, 2009 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 August 31, 2009 and August 31, 2008 are not necessarily indicative of the operating results for the full years.





NOTE 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 $374,302.  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.





NOTE 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 August 31, 2009 other than incorporation 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





The carrying value of cash approximates their fair value because of the short-term maturity of these instruments.  The company’s operations are in Canada and virtually all of its assets are giving rise to significant exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s
operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.





F-4
 Table of Contents





SUNSI ENERGIES INC.


(A Development Stage Company)


Notes to Unaudited Consolidated financial statements


For Three Months Ended August 31, 2009


(Expressed in U.S. dollars)





NOTE 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 SFAS No. 109 as of its inception.  Pursuant to SFAS No. 109 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 SFAS No. 128 “Earnings per Share”.  SFAS No. 128 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.





NOTE 4 – THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS





In December 2007, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133.  This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b)
how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has adopted the provisions of SFAS No. 161, but does not expect it to
have a material impact on its consolidated financial position, results of operations or cash flows.





In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment.  In particular, the staff indicated in SAB
107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect
a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal
year 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.





F-5
 Table of Contents




SUNSI ENERGIES INC.


(A Development Stage Company)


Notes to Unaudited Consolidated financial statements


For Three Months Ended August 31, 2009


(Expressed in U.S. dollars)








NOTE 4 – THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS (continued)





In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.  This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that
a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited.





The effective date of this statement is the same as that of the related FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements.  The Company adopted this statement beginning June 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results
of operations or cash flows.





In December 2007, the FASB, issued SFAS No. 141 (revised 2007), Business Combinations. This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141.  This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in
its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date.





The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company adopted this Statement beginning June 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.





In May 2008, the FASB issued SFAS No. 162, THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.  This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with
generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy).  This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “the Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.”





F-6
 Table of Contents





SUNSI ENERGIES INC.


(A Development Stage Company)


Notes to Unaudited Consolidated financial statements


For Three Months Ended August 31, 2009


(Expressed in U.S. dollars)





NOTE 4 – THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS (continued)





In May 2008, the FASB issued SFAS No. 163, ACCOUNTING FOR FINANCE GUARANTEE INSURANCE CONTRACTS – AN INTERPRETATION OF FASB STATEMENT NO. 60.  The premium revenue recognition approach for a financial guarantee insurance contract links premium revenue recognition to the amount of insurance protection and the period in which
it is provided. For purposes of this statement, the amount of insurance protection provided is assumed to be a function of the insured principal amount outstanding, since the premium received requires the insurance enterprise to stand ready to protect holders of an insured financial obligation from loss due to default over the period of the insured financial obligation.  This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008.





In June 2008, the FASB issued FASB Staff Position Emerging Issues Task Force (EITF) No. 03-6-1, DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING SECURITIES (“FSP EITF No. 03-6-1”).  Under FSP EITF No. 03-6-1, unvested share-based payment awards that contain
rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. FSP EITF No. 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years, and is not expected to have a significant impact on the Company’s financial statements.





In November 2008, the Emerging Issues Task Force (“EITF”) issued Issue No. 08-7, Accounting for Defensive Intangible Assets (“EITF 08-7”). EITF 08-7 applies to all acquired intangible assets in which the acquirer does not intend to actively use the asset but intends to hold (lock up) the asset to prevent its competitors
from obtaining access to the asset (a defensive asset), assets that the acquirer will never actually use, as well as assets that will be used by the acquirer during a transition period when the intention of the acquirer is to discontinue the use of those assets. EITF 08-7 is effective as of June 1, 2009. The Company does not expect the adoption of EITF 08-7 to have a material impact on its financial statements.





On January 12, 2009 the FASB issued a final Staff Position ("FSP") amending the impairment guidance in EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets to achieve more consistent determination
of whether another-than-temporary impairment has occurred. This FSP does not have an impact on the Company at the present time.





On April 1, 2009 the FASB issued FSP FAS 141(R)-1 that amends and clarifies FASB No. 141 (revised 2007), Business Combinations, to address application issues on initial recognition and measurement, subsequent measurement and accounting, and disclosures of assets and liabilities arising from contingencies in a business combination.





On April 9, 2009 the FASB issued three FSPs intended to provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities. FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly, provides guidelines for making fair value measurements more consistent with the principles presented in FASB Statement No. 157, Fair Value Measurements. FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, enhances consistency in financial reporting by increasing the frequency of fair value disclosures. FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, provides additional guidance designed to create greater
clarity and consistency in accounting for and presenting impairment losses on securities. These FSPs do not have an impact on the Company at the present time.





On May 28, 2009 the FASB announced the issuance of SFAS 165, Subsequent Events. SFAS 165 should not result in significant changes in the subsequent events that an entity reports. Rather, SFAS 165 introduces the concept of financial statements being available to be issued. Financial statements are considered available to be issued when they
are complete in a form and format that complies with generally accepted accounting principles (GAAP) and all approvals necessary for issuance have been obtained.





On June 12, 2009 the FASB issued two statements that amended the guidance for off-balance-sheet accounting of financial instruments: SFAS No. 166, Accounting for Transfers of Financial Assets, and SFAS No. 167, Amendments to FASB Interpretation No. 46(R).





F-7
 Table of Contents




SUNSI ENERGIES INC.


(A Development Stage Company)


Notes to Unaudited Consolidated financial statements


For Three Months Ended August 31, 2009


(Expressed in U.S. dollars)





NOTE 4 – THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS (continued)





SFAS No. 166 revises SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and will require entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. The statement eliminates the
concept of a qualifying special-purpose entity, changes the requirements for the derecognition of financial assets, and calls upon sellers of the assets to make additional disclosures about them.





SFAS No. 167 amends FASB Interpretation (FIN) No. 46(R), Consolidation of Variable Interest Entities, by altering how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated. A company has to determine whether it should provide consolidated reporting of an entity based
upon the entity's purpose and design and the parent company's ability to direct the entity's actions.





The standards will be effective at the start of the first fiscal year beginning after November 15, 2009, which will mean January 2010 for companies that are on calendar years. The guidance will have to be applied for first-quarter filings.





The FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, on June 29, 2009 and, in doing so, authorized the Codification as the sole source for authoritative U.S. GAAP.   SFAS No. 168 will be effective for financial statements issued for reporting
periods that end after September 15, 2009.  Once it's effective, it will supersede all accounting standards in U.S. GAAP, aside from those issued by the SEC.  SFAS No. 168 replaces SFAS No. 162 to establish a new hierarchy of GAAP sources for non-governmental entities under the FASB Accounting Standards Codification.





NOTE 5 – 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 $374,302, which expires in 2029.  Pursuant to SFAS No. 109 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 August 31, 2009, the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:





August 31, 2009$Net Operating Loss


374,302Statutory Tax Rate


35%Effective Tax Rate


---Deferred Tax Asset


131,006Valuation Allowance


(131,006
)Net Deferred Tax Asset


---





The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on  June  1, 2007.  As a result of the implementation of Interpretation 48, the Company recognized approximately no increase in the liability for unrecognized tax benefits.





The Company has no tax positions at August 31, 2009 and 2008 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 August 31,  2009 or 2008.





F-8
 Table of Contents





SUNSI ENERGIES INC.


(A Development Stage Company)


Notes to Unaudited Consolidated financial statements


For Three Months Ended August 31, 2009


(Expressed in U.S. dollars)





NOTE 6 – STOCKHOLDERS’ EQUITY





The Company is authorized to issue 75 million shares of common stock at a par value of $0.001 and had 26,760,000 shares of common stock issued and outstanding as of August 31, 2009.  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.





NOTE 7 – RELATED PARTY TRANSACTIONS





At August 31, 2009, the Company owes $20,836 to an entity owned by the Company’s Chief Accounting Officer.  The amount owed is for expenses paid on behalf of the Company.





NOTE 8 – COMMITMENTS





SunSi Energies Inc. entered into an engagement agreement 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 the consultant, then the consultant will receive a Finders or referral fee at closing of seven percent
(7%) of the amount received by the Company.  The financing sought is in the amount of $16,000,000 in equity.  The potential amount of fee paid can be in the amount of $1,120,000.  The Consultant will be paid at closing directly from the funding source.  The terms and condition of financing are subject to Company approval.





NOTE 9 – OTHER EVENTS





The Company incorporated  on April 7th 2009 a wholly-owned subsidiary in Hong Kong  in the name of “SunSi Energies Hong Kong Limited” and this Company has entered into Two (2)  Joint Venture Agreements with a Chinese Company respectively on June 18 and June 19, 2009. Upon completion and satisfaction of due diligence
SunSi Energies Hong Kong has committed to invest a total of 10,000,000US$ in exchange for 90% of the capital stock in the newly formed PRC  Joint Venture Company who 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. 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.





SunSi Energies Hong Kong had no activity from the date of incorporation through August 31, 2009, other than incorporation and start-up costs.





NOTE 10 – SUBSEQUENT EVENTS





In September 2009, the Company entered into a subscription receivable for a total of $25,000 at $2.00 per share for a total of 12,500 shares, and  on September 24, 2009 such amount of $25,000 was received by the Company.





The Company has evaluated subsequent events from the balance sheet date through October 14, 2009, and has found no other items that require disclosure.





F-9
 Table of Contents




Item 2.     Management’s Discussion and Analysis or Plan of Operation





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: 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 has re-directed its focus from mineral mining to the acquisition of Trichlorosilane (TCS) production facilities in China.  SunSi aims 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.





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 USD 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 USD to make other potential TCS manufacturing facility acquisitions and for general corporate purposes.





Zibo Baoyun Chemical Plant





ZBC was founded in February 2003 and has a current production capacity of 25,000 MT of TCS per year. TCS is the key feedstock for almost all PV solar cells and modules produced today (over 90% in 2008).





While we do not have complete assurance that we will not encounter issues that would make the ZBC acquisition unsuitable for our strategy, we feel that ZBC’s assets satisfy most or all of the criteria we have established.  If we encounter insurmountable issues in the ZBC acquisition, our board of directors will pursue the acquisition
of different TCS manufacturing facilities, which may include multiple smaller TCS manufacturing facilities instead of one larger facility at a single location, or the ZBC facility.




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ZBT: Transportation and Delivery





In addition to the planned acquisition of ZBC, we intend to acquire ZBT, a transportation company which transports the finished product from the ZBC chemical facility to clients across China. With a total capacity of over 160 tons, ZBT’s fleet includes over 25 vehicles, 5 of which are heavy loading equipment. ZBT holds special permits
and licenses to transport dangerous goods within China. If acquired, we plan on growing the ZBT fleet of vehicles to deliver the additional TCS produced by the new expansion facility.





Results of Operations for the three months ended August 31, 2009 and 2008





Revenues.  We did not earn any revenues for the three months ended August 31, 2009 and 2008, or from inception through the period ending August 31, 2009. We do not anticipate earning revenues until such time that we are able to acquire TCS manufacturing facilities and begin
our planned business of producing and selling TCS.





Operating Expenses.  We incurred operating expenses for the three months ended August 31, 2009 and 2008 in the amounts of $162,339 and $5,747, respectively. Operating expenses for the three months ended August 31, 2009 included general and administrative expenses in the amount
of $3,933 and professional fees expenses in the amount of $158,406. Operating expenses for the three months ended August 31, 2008 included general and administrative expenses in the amount of $5,747.  The increase in operating expenses from 2008 to 2009 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.





Gross Profit (Loss).  We incurred a net loss for the three months ended August 31, 2009 and 2008 in the amounts of $162,339 and $5,747, 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 August 31, 2009, we had cash of $12,277 as our only current asset and current liabilities of $335,003. We therefore had a working capital deficit of $322,726 as of August 31, 2009.





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 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.




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Off Balance Sheet Arrangements





As of August 31, 2009, 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 4T.     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.





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.













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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 entered into a subscription agreement for the sale of 12,500 shares of its common stock in a private offering to one accredited investor for a total receivable of $25,000.  On September 24, 2009 the amount of $25,000 was received by the Company.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.     Submission of Matters to a Vote of Security Holders





No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended August 31, 2009.





Item 5.     Other Information





On August 27, 2009 the Company’s Board of Directors ratified the appointment of Daniel Julien as Company Chief Accounting Officer effective March 24, 2009.





Mr. Julien, 51, holds a Bachelor of Business Administration from the University of Ottawa and a Bachelor of Accountant Science from the University of Quebec in Montreal.  Mr. Julien is a member of the Chartered Accountant institute.  Mr. Julien has also been employed by Methes Energies International Ltd. as its Chief Financial
Officer since June 2007.  Prior to joining SunSi, Mr. Julien provided accounting services to a number of private and public companies.  From May 2003 to November 2005, Mr. Julien was employed by Citrus Technologies Inc. as Chief Financial Officer and also served as a director.  From October 2003 to October 2007, Mr. Julien was employed by Terra Nostra Technology Inc. as Chief Financial Officer and also served as a director.





Item 6.      Exhibits





Exhibit
Number
Description of Exhibit31.1
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









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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 DirectorOctober 14, 2009




By:/s/ Daniel JulienDaniel JulienChief Accounting OfficerOctober 14, 2009





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 RatnaniDirectorOctober 14, 2009/s/ Richard St-JulienRichard St-JulienSecretary and DirectorOctober 14, 2009