Sunsi Energies (PINK:SSIE)

ITEM 1.01

ENTRY INTO A DEFINITIVE MATERIAL AGREEMENT

On May 10, 2012 and May 17, 2012, the registrant SunSi Energies, Inc. (“SunSi”) entered into two share exchange agreements with shareholders of TransPacific Energy, Inc. (“TPE”), respectively, to purchase an aggregate controlling equity interest in TPE.

The first share exchange agreement, attached hereto as Exhibit 10.1, is between SunSi, TPE and its shareholders ABH Holdings, LLC, Acme Energy, Inc., and Apela Holdings LLC, pursuant to which SunSi shall purchase from such shareholders 11,667,101 shares of the total 31,543,336 outstanding shares of TPE.  The transaction may have multiple closings. The TPE shares being sold are valued at $0.06 per share and the SunSi consideration for such TPE shares shall be shares of SunSi common stock valued at the price equal to the 30 day weighted-average closing trading price of SunSi’s common stock as quoted on the OTCQB or NASDAQ immediately prior to the respective closing date. The first closing may occur at such time SunSi purchases from TPE an additional $150,000 in the common stock of TPE, payable in cash, which must occur prior to June 15, 2012, and thereafter, there may occur a subsequent closing at each time SunSi purchases an additional $100,000 of TPE common stock, until a final closing at such time as SunSi has purchased a total of $500,000 of TPE common stock, which must occur prior to September 30, 2012.  All purchases of TPE common stock thereunder are priced at $0.06 per share.

The second share exchange agreement, attached hereto as Exhibit 10.2, is between SunSi and Soffimat Holdings SA, a shareholder of TPE, pursuant to which SunSi shall purchase from such shareholder 4,420,000 shares of TPE common stock. This transaction shall close before June 15, 2012.

NEW YORK, Jan. 18, 2012 (GLOBE NEWSWIRE) -- SunSi Energies Inc. ("SunSi") (OTCQB:SSIE), a provider of the specialty chemical trichlorosilane ("TCS") to the solar industry, today announced its operating results for its second fiscal quarter and six months ended November 30, 2011. Revenue totaled approximately $3.6 million and $13.8 million for the three and six month periods ended November 30, 2011. SunSi did not record any revenue for the comparable periods in the prior fiscal year.

The loss from operations before income taxes and non-controlling interests was $839,886 for the second quarter ended November 30, 2011, compared to a loss of $231,713 for the second quarter ended November 30, 2010. The loss from operations before income taxes and non-controlling interests was $495,648 for the six month period ended November 30, 2011, compared to a loss of $390,109 for the corresponding six month period ended November 30, 2010.

TCS Market

During the fiscal quarter ended November 30, 2011, the polysilicon industry responsible for supplying the solar industry experienced a large downturn in global production due to an oversupply of polysilicon and subsequent price decline in solar modules. TCS, the specialty chemical produced by SunSi, is an essential raw material necessary to manufacture polysilicon. It represents on average approximately 20% of the cost of a kilogram of polysilicon. TCS prices and order volume remained relatively strong against declining polysilicon prices from January 2011 through August 2011. However, in the Company's second fiscal quarter ended November 30, 2011, a subsequent oversupply of polysilicon caused a continued decline in the price of polysilicon, forcing many polysilicon plants to temporarily shut down, which in turn, significantly effected TCS pricing and order volume.

As a result of these unexpected price declines and the reduced number of orders for TCS, a portion of which was cyclical, the Company experienced a significant sequential reduction in revenues compared to the previous six months. Management notes that since the start of the 2012 calendar year, the polysilicon market has shown some preliminary signs of stabilization.

Change of Fiscal Year-End, Guidance

Effective December 2011, SunSi formally changed its fiscal year-end from May 31 to December 31. The Company will file a transitional Form 10-K for the period ended December 31, 2011 and will begin to report earnings on a calendar quarter basis commencing with the quarter ending March 31, 2012.

As a result of the market conditions and change in its fiscal year described above, the Company has withdrawn its guidance previously issued on September 20, 2011 for the fiscal year ending May 31, 2012. As visibility further improves, SunSi plans to issue new guidance in April 2012, for calendar year 2012 which corresponds to its new year-end of December 31.

First Quarter 2012 Results

• Revenue totaled approximately $10.3 million for the first quarter ended August 31, 2011. SunSi did not record any revenue for the first quarter ended August 31, 2010.
• Income from operations before income taxes and non-controlling interest was $344,238 for the first quarter ended August 31, 2011, compared to a loss of ($158,396) for the same period ended August 31, 2010.

David Natan, SunSi Energies' Chief Executive Officer, said, "Despite a difficult period in the solar industry and a significant reduction in polysilicon pricing worldwide, we continue to execute our business plan and position ourselves for future growth. We believe our low cost structure in China, lean corporate overhead in the U.S., the diversification of our business outside of China and our future expansion plans, will give us a competitive advantage in the segment of the solar industry in which we operate."

Richard St-Julien, SunSi Energies' Chairman of the Board, stated, "We are starting to gain traction in the TCS industry as more and more polysilicon makers become aware of our capability to deliver a high quality product anywhere in the world at a competitive price. We remain solidly focused on growing SunSi's business and delivering shareholder value."

NEW YORK, Sept. 28, 2011 (GLOBE NEWSWIRE) -- SunSi Energies Inc. ("SunSi") (OTCQB:SSIE), a provider of the specialty chemical trichlorosilane ("TCS") to the solar industry, announced today that it has filed an application to list its common stock on the NASDAQ Capital Market. The NASDAQ listing application is subject to review and approval by NASDAQ's Listing Qualifications Department for compliance with all NASDAQ Capital Market Standards.

David Natan, SunSi's Chief Executive Officer, commented: "SunSi is ready to list on a larger, high profile exchange and believes that the NASDAQ is the right marketplace for our shares to trade. Listing on the NASDAQ should enable us to broaden our investor reach, increase visibility to the investment community, and add liquidity to our shares. We continue to expand our TCS operations in China and last week announced revenue guidance for fiscal 2012 in the range of $49 to $52 million, which is a substantial increase over the $15.1 million in revenue reported in fiscal 2011."

On November 30, 2010 the Company entered into definitive agreements to purchase a 60% interest in Wendeng He Xie Silicon Co. Ltd., a company with a trichlorisilane manufacturing factory located in Wendeng, China from Liu Dongqiang, a Chinese individual, and to have Wendeng re-formed as a joint venture under Chinese law. Wendeng produces annually 20,000 metric tons of Trichlorosilane. The Company expects to close the Wendeng acquisition in the first quarter of 2011.

On August 3rd 2010, SunSi HK signed a letter of intent with Wendeng He Xie Silicon Co. Ltd. (“Wendeng”) for the acquisition of 60% of its existing 20,000 MT TCS facility, plus an increase of Wendeng’s capacity by an additional 40,000 MT. The Company estimates that it will have to raise $6.5 million to consummate the acquisition, and an additional $8.8 million to increase the capacity.

Some Additional History:

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

On December 12, 2009, SunSi Hong Kong(“SunSi HK”) secured the exclusive distribution rights for ZBC’s TCS production for the international market. We believe exportation of TCS out of China is minimal, as most of the Chinese production is used to supply the country’s demand. The lower cost of production in China is advantageous when competing over the globe; one that SunSi intends to capitalize on.

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

GeoTeam® Note: The company has yet to record any revenues.

Update:

On March 9, 2011 we completed the previously announced purchase of a 60% interest in Wendeng He Xie Silicon Co. Ltd., a company with a trichlorosilane manufacturing factory located in Wendeng, China from Liu Dongqiang, a Chinese individual.  As part of the closing, Wendeng was re-formed as a joint venture business under Chinese law and issued a new business license.

The Acquisition was effected pursuant to an equity transfer agreement dated November 22, 2010, as amended on December 15, 2010 by a letter agreement.

Pursuant to the terms of the Acquisition, the Company shall:

(i) pay Mr. Liu USD $445,075 within three months of the issuance of the business license;

(ii) issue 1,349,628 shares of or common stock to Mr. Liu or his assigns, such shares carry a right of redemption by Mr. Liu whereby the Company (or an affiliate of the Company) shall buy such shares back from Mr. Liu within six months at a price of USD equivalent to RMB 18,000,000 on the transfer date (currently equal to approximately USD $2,700,000); and

(iii) cause an affiliate of the Company to transfer 1,574,566 shares of its Company common stock to Mr. Liu, or his assigns, such shares shall be restricted from resale for 2.5 years.

Wendeng currently produces annually 22,000 metric tons of Trichlorosilane. As a result of closing the Acquisition, SunSi will begin to immediately consolidate all of Wendeng’s revenues, and 60% of its profits.

NEW YORK, Feb. 24, 2011 (GLOBE NEWSWIRE) -- SunSi Energies, Inc. today announced that it is nearing completion of the acquisition of a 60% ownership interest in the Wendeng He Xie Silicon Co. Ltd. ("Wendeng") trichlorosilane (TCS) facility located in Weihai, China. Previously, the Company had announced on November 30, 2010 that it had signed a definitive agreement to purchase Wendeng. The Company has completed its due diligence on Wendeng and expects to receive the final business license necessary to close the transaction within the next few weeks. 

David Natan, SunSi's Chief Executive Officer, stated, "We are very encouraged with the progress that we've made to date on the Wendeng acquisition. Our due diligence process has substantiated our expectations about Wendeng, its excellent management team and its high quality TCS currently being sold to billion dollar entities at very favorable operating margins."

Additionally, the Company announced today that the sole shareholder of the Wendeng facility has agreed to accept in excess of 50% of the purchase price of Wendeng in SunSi common shares. This shareholder has agreed to defer a significant portion of the remaining cash purchase price for six months.  Under the terms of this agreement, SunSi will pay approximately $450,000 to consummate the Wendeng acquisition. 

In October of 2009 SunSi Energies Inc. (OTCBB: SSIE), through its wholly-owned subsidiary SunSi Energies Hong Kong Ltd., executed definitive Articles of Association for the creation of a newly formed Joint Venture, which will own and operate an existing Trichlorosilane (TCS) production facility in Zibo, China. As previously announced, SunSi will own 90% of the Joint Venture Company; named Zibo SunSi Chemical Co. Ltd., specifically formed to own the assets, expertise and technology of the Zibo TCS production facility that currently maintains a production capacity of 25,000 MT per year.

Zibo SunSi Chemical Co. Ltd. will be engaged in the production of TCS, a chemical primarily used in the production of polysilicon, which is an essential raw material in the production of solar cells for photovoltaic (PV) panels that convert sunlight to electricity for homes, businesses and farms. TCS is considered to be the first product in the solar PV value chain before polysilicon, and is also the principal source of ultrapure silicon in the semiconductor industry.

Pursuant to the terms of the joint venture agreement between the parties, all of the assets, including permits, rights, land usage, as well as the entire labor force and management team of the Zibo TCS producer, will be transferred into Zibo SunSi Chemical Co. Ltd. upon closing of the transaction. While the current name plate capacity of the facility is 25,000 metric tons of TCS per year, SunSi has committed to double this number over the next 12 months. Concurrently, the TCS production facility continues its normal activities.

Source: Marketwire (October 27, 2009)