Attached files
| file | filename |
|---|---|
| 8-K/A - ForceField Energy Inc. | v224618_8ka.htm |
| EX-99.1 - ForceField Energy Inc. | v224618_ex99-1.htm |
| EX-99.2 - ForceField Energy Inc. | v224618_ex99-2.htm |
On March 18, 2011 Sunsi completed the previously announced purchase (“Acquisition”) of a 60% interest in Wendeng He Xie Silicon Co. Ltd., a company with a trichlorosilane manufacturing factory located in Wendeng, China (“Wendeng”) 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:
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(i)
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pay Mr. Liu USD $445,075 within three months of the issuance of the business license;
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(ii)
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issue 1,349,628 shares of or common stock to Mr. Liu or his assigns, such shares carry an optional right of redemption by Mr. Liu whereby the Company (or an affiliate of the Company) shall buy such shares back from Mr. Liu, if Mr. Lui exercises his option 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
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(iii)
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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.
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The following unaudited pro-forma income statements, balance sheet and the explanatory notes give effect to the acquisition of 60% of Wendeng by the Company on March 18, 2011.
The pro-forma consolidated income statements and balance sheet and explanatory notes are based on the estimates and assumptions set forth in the explanatory notes. These pro-forma consolidated income statements have been prepared utilizing the historical financial statements of SunSi and Wendeng and should be read in conjunction with the historical financial statements and notes thereto included elsewhere in this filing.
The pro-forma income statements have been prepared as if the acquisition had occurred on June 1, 2010 and 2009 respectively. The proforma balance sheet has been prepared as if the acquisition occurred on February 28, 2011. This pro-forma consolidated financial data is provided for comparative purposes only, and does not purport to be indicative of the actual financial position or results of operations had the acquisition occurred at the beginning of the periods presented, nor are they necessarily indicative of the results of future operations.
SUNSI ENERGIES INC. AND WENDENG HE XIE SILICON CO., LTD.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
FEBRUARY 28, 2011
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SunSi
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Wendeng He Xie
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(In United States Dollars)
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Energies Inc.
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Silicon Co., Ltd.
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Adjustments
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Consolidated
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ASSETS
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Current assets
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Cash and cash equivalents
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$ | 448,995 | $ | 708,207 | $ | - | $ | 1,157,202 | ||||||||||||
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Accounts receivable, net
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1,950,306 | 2,730,558 | - | 4,680,864 | ||||||||||||||||
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Inventory
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- | 485,703 | - | 485,703 | ||||||||||||||||
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Prepaid expenses and other current assets
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90,950 | 62,210 | - | 153,160 | ||||||||||||||||
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Total current assets
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2,490,251 | 3,986,678 | - | 6,476,929 | ||||||||||||||||
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Related party receivables
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- | 1,102,971 | - | 1,102,971 | ||||||||||||||||
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Property, plant and equipment, net
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- | 6,571,981 | - | 6,571,981 | ||||||||||||||||
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Goodwill, net
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- | - | 3,807,585 |
(a) (c)
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3,807,585 | |||||||||||||||
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Intangible assets, net
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273,910 | 2,516,454 | - | 2,790,364 | ||||||||||||||||
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Total Assets
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$ | 2,764,161 | $ | 14,178,084 | $ | 3,924,769 | $ | 20,749,830 | ||||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable and accrued liabilities
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$ | 2,237,368 | $ | 3,368,994 | $ | 445,075 |
(a)
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$ | 6,051,437 | |||||||||||
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Related party payables
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32,100 | 5,388,850 | - | 5,420,950 | ||||||||||||||||
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Taxes payable
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23,577 | 1,267,527 | - | 1,291,104 | ||||||||||||||||
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Total current liabilities
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2,293,045 | 10,025,371 | 445,075 | 12,763,491 | ||||||||||||||||
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Commitments and contingencies
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Redeemable common stock and capital in excess of $0.001 par value
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- | - | 2,701,910 |
(a)
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2,701,910 | |||||||||||||||
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Stockholders' equity
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Preferred stock
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- | - | - | - | ||||||||||||||||
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Common stock
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27,744 | 731,807 | (731,807 | ) |
(b)
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27,744 | ||||||||||||||
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Additional paid-in capital
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1,794,133 | - | 3,152,228 |
(a)
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4,946,361 | |||||||||||||||
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Retained earnings (accumulated deficit)
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(1,358,063 | ) | 3,303,722 | (3,303,722 | ) |
(b)
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(1,358,063 | ) | ||||||||||||
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Accumulated other comprehensive income
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254 | 117,184 | (117,184 | ) | 254 | |||||||||||||||
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Total stockholders' equity
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464,068 | 4,152,713 | (883,301 | ) | 3,616,296 | |||||||||||||||
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Non-controlling interests
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7,048 | - | 1,661,085 |
(a)
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1,668,133 | |||||||||||||||
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Total Liabilities and Stockholders' Equity
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$ | 2,764,161 | $ | 14,178,084 | $ | 3,924,769 | $ | 20,749,830 | ||||||||||||
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(a)
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To record the purchase of a 60% interest in Wendeng He Xie Silicon Co., Ltd. ("Wendeng"). As consideration, SunSi Energies Inc. ("Company") has agreed to (i) pay USD $445,075 within three months of the issuance of the new business license; (ii) issue 1,349,628 shares of its common stock (at a per share price of approximately $2.00) that carry a right of redemption; and (iii) cause an affiliate of the Company to transfer 1,574,566 shares of the Company's common stock (at a per share price of approximately $2.00).
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(b)
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To adjust the pre-acquisition equity of Wendeng.
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(c)
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The determination of goodwill is preliminary and subject to change in accordance with FASB ASC Topic 850, Business Combinations upon completion of an independent valuation. Separately identifiable intangible assets may be determined to exist that may require amortization expense to be recognized in future periods.
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SUNSI ENERGIES INC. AND WENDENG HE XIE SILICON CO., LTD.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED FEBRUARY 28, 2011
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SunSi
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Wendeng He Xie
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(In United States Dollars)
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Energies Inc.
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Silicon Co., Ltd.
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Adjustments
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Consolidated
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Sales
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$ | 4,622,360 | $ | 13,593,821 | $ | - | $ | 18,216,181 | ||||||||||||
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Cost of goods sold
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4,528,392 | 9,368,816 | - | 13,897,208 | ||||||||||||||||
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Gross margin
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93,968 | 4,225,005 | - | 4,318,973 | ||||||||||||||||
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Operating expenses
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Selling, general and administrative expenses
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587,693 | 1,731,900 | - | 2,319,593 | ||||||||||||||||
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Total operating expenses
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587,693 | 1,731,900 | - | 2,319,593 | ||||||||||||||||
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Income (loss) from operations
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(493,725 | ) | 2,493,105 | - | 1,999,380 | |||||||||||||||
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Income (loss) before income taxes
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(493,725 | ) | 2,493,105 | - | 1,999,380 | |||||||||||||||
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Income tax provision
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23,492 | 623,276 | - | 646,768 | ||||||||||||||||
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Net income (loss)
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(517,217 | ) | 1,869,829 | - | 1,352,612 | |||||||||||||||
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Less: Net income (loss) attributable to non-controlling interests
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7,048 | - | 747,932 |
(d)
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754,980 | |||||||||||||||
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Net income (loss) attributable to Sunsi Energies Inc.
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$ | (524,265 | ) | $ | 1,869,829 | $ | (747,932 | ) | $ | 597,632 | ||||||||||
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Net income (loss) per common share:
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Basic and diluted
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$ | (0.02 | ) | $ | 0.02 | |||||||||||||||
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Weighted average number of common shares outstanding:
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Basic and diluted
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27,530,544 | 28,880,172 | ||||||||||||||||||
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Comprehensive income (loss):
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Net income (loss)
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(517,217 | ) | 1,869,829 | - | 1,352,612 | |||||||||||||||
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Foreign currency translation adjustment
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254 | 116,354 | - | 116,608 | ||||||||||||||||
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Comprehensive income (loss) before non-controlling interests
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(516,963 | ) | 1,986,183 | - | 1,469,220 | |||||||||||||||
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Comprehensive income (loss) attributable to non-controlling interests
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7,048 | - | 747,932 |
(d)
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754,980 | |||||||||||||||
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Comprehensive income (loss)
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(524,011 | ) | 1,986,183 | (747,932 | ) | 714,240 | ||||||||||||||
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(d)
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To record adjustment of net income for non-controlling interest; 40% unacquired interest in Wendeng.
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SUNSI ENERGIES INC. AND WENDENG HE XIE SILICON CO., LTD.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 2010
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SunSi
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Wendeng He Xie
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(In United States Dollars)
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Energies Inc.
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Silicon Co., Ltd.
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Adjustments
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Consolidated
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Sales
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$ | - | $ | 12,159,711 | $ | - | $ | 12,159,711 | ||||||||||||
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Cost of goods sold
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- | 9,827,402 | - | 9,827,402 | ||||||||||||||||
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Gross margin
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- | 2,332,309 | - | 2,332,309 | ||||||||||||||||
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Operating expenses
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Selling, general and administrative expenses
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621,835 | 442,957 | - | 1,064,792 | ||||||||||||||||
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Total operating expenses
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621,835 | 442,957 | - | 1,064,792 | ||||||||||||||||
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Income (loss) from operations
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(621,835 | ) | 1,889,352 | - | 1,267,517 | |||||||||||||||
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Other income (expense)
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Interest income
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- | 517 | - | 517 | ||||||||||||||||
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Total other income (expense)
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- | 517 | - | 517 | ||||||||||||||||
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Income (loss) before income taxes
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(621,835 | ) | 1,889,869 | - | 1,268,034 | |||||||||||||||
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Income tax provision
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- | 472,467 | - | 472,467 | ||||||||||||||||
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Net income (loss)
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(621,835 | ) | 1,417,402 | - | 795,567 | |||||||||||||||
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Less: Net income attributable to non-controlling interests
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- | - | 566,961 |
(d)
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566,961 | |||||||||||||||
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Net income (loss) attributable to Sunsi Energies Inc.
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$ | (621,835 | ) | $ | 1,417,402 | $ | (566,961 | ) | $ | 228,606 | ||||||||||
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Net income (loss) per common share:
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Basic and diluted
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$ | (0.02 | ) | $ | 0.01 | |||||||||||||||
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Weighted average number of common shares outstanding:
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Basic and diluted
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26,972,486 | 28,322,114 | ||||||||||||||||||
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Comprehensive income (loss):
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Net income (loss)
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(621,835 | ) | 1,417,402 | - | 795,567 | |||||||||||||||
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Foreign currency translation adjustment
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254 | 940 | - | 1,194 | ||||||||||||||||
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Comprehensive income (loss) before non-controlling interests
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(621,581 | ) | 1,418,342 | - | 796,761 | |||||||||||||||
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Comprehensive income (loss) attributable to non-controlling interests
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- | - | 566,961 |
(d)
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566,961 | |||||||||||||||
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Comprehensive income (loss)
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(621,581 | ) | 1,418,342 | (566,961 | ) | 229,800 | ||||||||||||||
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(d)
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To record adjustment of net income for non-controlling interest; 40% unacquired interest in Wendeng.
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