TCS is a chemical compound primarily used in the production of polysilicon, an essential raw material in the production of solar cells for photovoltaic (PV) panels that convert sunlight to electricity for homes, businesses and farms, for example.

Additionally, purified trichlorosilane is the principal source of ultrapure silicon in the semiconductor industry. As a result of consummating this accretive transaction, SunSi will become immediately profitable on a consolidated basis.

Under the terms of the agreement, SunSi will pay the sole shareholder of Wendeng approximately $3.15 million in cash in two installments, including $455,000 and $2.7 million within a three month and six month period, respectively.

This payment will be guaranteed with the issuance of 1,349,628 common shares of SunSi, which is required to be re-purchased by the Company within a six month period, which equates to a price of $2.00 per share. Additionally as part of the transaction, an existing shareholder of SunSi will contribute 1,574,566 shares of SunSi common stock to the Wendeng shareholder.

Wendeng is recognized in China for the quality of its TCS, and its efficiency. It benefits from long standing relationships with billion dollar clients. For the twelve month period ended May 31, 2010 Wendeng had revenues of approximately $12.0 million and generated pre-tax operating profit of approximately $1.9 million. Due to the rising price of TCS and increased orders, Wendeng revenues are expected to be $20.0 to $25.0 million for the period ending May 31, 2011.

Currently Wendeng's nameplate capacity is approximately 22,000 metric tons (MT) but is now in the process of an expansion to 30,000 MT that is expected to be completed before the end of April 2011. The construction of a second expansion will commence in May, 2011. The total expansion, which will increase Wendeng's capacity to 75,000 MT, is expected to be completed by the end of 2011.

The 40% minority shareholder of Wendeng will also contribute to the expansion costs to maintain his equity interest of 40% and will continue along with his management team to provide TCS technology, technical assistance and expertise for the construction, along with staff training while operating the facility during and after the expansion. SunSi has retained Wendeng's entire management team and all of its employees.

David Natan, SunSi's Chief Executive Officer stated, "After many months of work, we are extremely pleased to have completed the acquisition of a 60% interest in Wendeng, one of the premier TCS facilities in China. Currently, Wendeng is operating at full capacity and generating excellent profitability. Based on the current and anticipated future worldwide demand for TCS, we are very comfortable undertaking the expansion of the Wendeng facility to 75,000 MT. On a consolidated basis we are now a profitable company going forward. As a result, we expect to file for an AMEX listing within the next couple of months. We remain committed to generating value for shareholders."

Richard St-Julien, President of SunSi Energies Hong Kong Limited stated, "During our due diligence process we recognized the quality of the Wendeng facility and its exceptional management team. This acquisition along with its planned expansion when completed, will give SunSi the status as one of the world leaders in TCS production. We are very encouraged by the strategic support we have received from the local and provincial Chinese government. Finally, SunSi is fortunate to have an excellent partner at Wendeng. His willingness to allow us to close the transaction on such favorable terms, and his agreement to take in excess of 50% of his purchase consideration in SunSi stock, is indicative of the confidence he has in us and the future prospects for SunSi."

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