10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2013

¨ 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

ForceField Energy 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.)

245 Park Avenue, 39th Floor New York, New York	10167
(Address of principal executive offices)	(Zip Code)

212-672-1786

(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 þ Yes  ¨ 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  þ  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	o	Accelerated filer	o
Non-Accelerated filer	o	Smaller reporting company	þ

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

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 16,265,501 common shares as of August 14, 2013. 

Table of Contents

		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements		3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk		11
Item 4:	Controls and Procedures		11
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings		12
Item 1A:	Risk Factors		12
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds		12
Item 3:	Defaults Upon Senior Securities		12
Item 4:	Mine Safety Disclosures		12
Item 5:	Other Information		12
Item 6:	Exhibits		13

2

PART I - FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

Our unaudited financial statements included in this Form 10-Q are as follows:
F-1	Consolidated Balance Sheets as of June 30, 2013 (Unaudited) and December 31, 2012
F-2	Interim Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2013 and 2012
F-3	Interim Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012
F-4	Notes to Interim Unaudited Consolidated Financial Statements

3

FORCEFIELD ENERGY INC.

Consolidated Balance Sheets

	June 30,			December 31,
	2013			2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	377,120		$	994,149
Accounts receivable, net		2,897,376			4,469,514
Inventory, net		173,071			323,141
Deferred tax assets, net		74,926			90,257
Prepaid expenses and other current assets		686,960			448,601
Total current assets		4,209,453			6,325,662
Property, plant and equipment, net		7,913,460			7,547,128
Goodwill		1,342,834			1,342,834
Intangible assets, net		4,477,335			4,862,408
Related party receivables		224,118			413,061
Other assets		—			21,956
Total assets	$	18,167,200		$	20,513,049
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2,914,290		$	3,689,065
Accrued liabilities		294,961			679,021
Loans payable		17,000			—
Related party payables		5,665,320			5,652,487
Income taxes payable		1,152,730			1,239,067
Total current liabilities		10,044,301			11,259,640
Convertible debentures		200,000			150,000
Deferred tax liabilities, net — non-current		223,147			409,037
Total liabilities		10,467,448			11,818,677
Commitments and contingencies		—			—
Equity:
ForceField Energy Inc. stockholders' equity:
Preferred stock, $0.001 par value. 12,500,000 shares authorized; zero shares
issued and outstanding		—			—
Common stock, $0.001 par value. 37,500,000 shares authorized; and 16,221,112 and 16,080,815 shares
issued and outstanding as of June 30, 2013 and December 31, 2012, respectively		16,221			16,081
Additional paid-in capital		13,549,804			13,015,222
Accumulated deficit		(8,267,603	)		(6,922,198	)
Accumulated other comprehensive income		399,529			317,337
Total ForceField Energy Inc. stockholders' equity		5,697,951			6,426,442
Noncontrolling interests		2,001,801			2,267,930
Total equity		7,699,752			8,694,372
Total liabilities and equity	$	18,167,200		$	20,513,049

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

F-1

FORCEFIELD ENERGY INC.

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Sales	$	217,484		$	526,590		$	502,629		$	1,034,217
Cost of goods sold		221,458			513,219			497,325			988,544
Gross margin		(3,974	)		13,371			5,304			45,673
Operating expenses:
Professional fees		192,393			148,014			381,969			289,724
General and administrative		771,159			823,282			1,417,100			1,428,401
Total operating expenses		963,552			971,296			1,799,069			1,718,125
Income (loss) from operations		(967,526	)		(957,925	)		(1,793,765	)		(1,672,452	)
Other income (expense)
Equity earnings (loss) from investment in TransPacfic Energy, Inc.		—			(1,211	)		—			(1,211	)
Interest expense, net		(5,175	)		(2,518	)		(9,593	)		(4,768	)
Total other income (expense)		(5,175	)		(3,729	)		(9,593	)		(5,979	)
Income (loss) before income taxes		(972,701	)		(961,654	)		(1,803,358	)		(1,678,431	)
Provision for income taxes (benefit)		(125,731	)		(167,342	)		(191,824	)		(281,518	)
Net income (loss)		(846,970	)		(794,312	)		(1,611,534	)		(1,396,913	)
Less: Net income (loss) attributable to noncontrolling interests		(149,266	)		(178,244	)		(266,129	)		(316,312	)
Net loss attributable to ForceField Energy Inc. common shareholders	$	(697,704	)	$	(616,068	)	$	(1,345,405	)	$	(1,080,601	)
Basic and diluted earnings (loss) per share	$	(0.04	)	$	(0.04	)	$	(0.08	)	$	(0.07	)
Weighted-average number of common shares outstanding:
Basic and diluted		16,187,281			15,057,587			16,159,934			15,033,951
Comprehensive income (loss):
Net income (loss)	$	(846,969	)	$	(794,312	)	$	(1,611,533	)	$	(1,396,913	)
Foreign currency translation adjustment		68,505			(59,310	)		82,191			(50,547	)
Comprehensive income (loss)		(778,464	)		(853,622	)		(1,529,342	)		(1,447,460	)
Comprehensive income (loss) attributable to noncontrolling interests		(149,266	)		(178,244	)		(266,129	)		(316,312	)
Comprehensive income (loss) attributable to ForceField Energy Inc.		(629,198	)		(675,378	)		(1,263,213	)		(1,131,148	)

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

F-2

FORCEFIELD ENERGY INC.

Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(1,611,534	)	$	(1,396,913	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		765,666			619,247
Provision for doubtful accounts		(62,152	)		389,874
Equity loss from investment in TransPacific Energy, Inc.		—			1,211
Common stock issued in exchange for services		92,822			24,000
Changes in operating assets and liabilities:
Accounts receivable		342,722			(493,392	)
Notes receivable		—			477,769
Inventory		153,773			114,874
Prepaid expenses and other current assets		(286,039	)		92,346
Related party receivables - trade		193,702			(112,110	)
Other assets		22,106			—
Accounts payable		523,375			154,333
Accrued liabilities		(331,136	)		149,459
Income taxes payable		(268,314	)		(359,663	)
Net cash used in operating activities		(465,009	)		(338,965	)
Cash flows from investing activities:
Cash consideration for acquisition of business		—			(150,000	)
Purchase of property, plant and equipment		(589,404	)		(190,017	)
Net cash provided by (used in) investing activities		(589,404	)		(340,017	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		441,900			195,000
Proceeds from issuance of convertible debentures		50,000			—
Proceeds from loans payable		17,000			129,600
Proceeds from (repayments of) related party payables		(75,000	)		40,000
Net cash provided by financing activities		433,900			364,600
Effect of exchange rates on cash and cash equivalents		3,484			(3,880	)
Net increase (decrease) in cash and cash equivalents		(617,029	)		(318,262	)
Cash and cash equivalents at beginning of period		994,149			674,291
Cash and cash equivalents at end of period	$	377,120		$	356,029
Supplemental disclosure of cash flow information:
Cash paid for interest	$	7,906		$	4,768
Cash paid for income taxes	$	800		$	—
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock related to acquisitions	$	—		$	475,207
Common stock issued to reduce accounts payable	$	—		$	40,000

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

F-3

FORCEFIELD ENERGY INC.

Notes to Interim Unaudited Consolidated Financial Statements

June 30, 2013

(Expressed in United States dollars)

1. NATURE OF OPERATIONS

ForceField Energy Inc. (“ForceField” or “Company”) is an international manufacturer, distributor, and licensee of alternative energy products and technologies. ForceField was incorporated in the State of Nevada on January 30, 2007. ForceField (i) owns 50.3% of TransPacific Energy, Inc. (“TPE”), a U.S. based renewable energy technology provider that uses “waste heat” from various manufacturing and other sources to provide clean electricity; (ii) is the exclusive North American distributor of light emitting diode (LED) commercial lighting products and fixtures for a premier manufacturer in China; and (iii) is a producer of trichlorosilane (“TCS”) in China. TCS is 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. This TCS is sold to the marketplace via two operating segments, (1) a 90% owned TCS distribution company, and (2) through the 60% ownership of a TCS plant, both of which are located in China.

On February 28, 2013, the Company changed its name from SunSi Energies Inc. (“SunSi”) to ForceField Energy Inc. With the exception of the Company’s wholly-owned subsidiary, SunSi Energies Hong Kong Ltd. (“SunSi HK”) which name remains unchanged, all historic references to “SunSi” in this document have been changed to “ForceField”.

2. SUMMARY OF  SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and are expressed in United States dollars. The consolidated financial statements include the accounts of the Company; its wholly-owned subsidiaries SunSi Energies Hong Kong Limited (“SunSi HK”), ForceField Energy S.A.(“S.A.”) in Costa Rica and ForceField Energy USA Inc. (“ForceField USA”); the Company’s 50.3% owned subsidiary TransPacific Energy, Inc. (“TPE”); SunSi HK's 90% owned subsidiary Zibo Baokai Commerce and Trade Co. Ltd. (“Baokai”); and SunSi HK's 60% owned subsidiary Wendeng He Xie Silicon Industry Co., Ltd. (“Wendeng”).  All intercompany accounts have been eliminated in consolidation.

Management’s Representation of Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited financial statements at December 31, 2012 as filed in the Company’s Form 10-K filed with the Securities and Exchange Commission. 

Reverse Stock Split

All preferred and common share amounts (except par value and par value per share amounts) have been retroactively restated as of June 30, 2013 to reflect the Company’s one-for-two reverse capital stock split effective October 9, 2012, as described in Note 17 — Stockholders’ Equity to these consolidated financial statements.

F-4

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. The Company continually evaluates its estimates, including but not limited to those related to the valuation of accounts receivable, inventories, deferred income taxes, goodwill and intangible assets, and the estimation on the useful lives of property, plant and equipment. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Refer to Note 2 — Summary of Significant Accounting Policies in the Company’s audited 2012 consolidated financial statements in Form 10-K for a summary of its significant accounting policies.

3. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

Accounting Standards Updates through ASU 2013-11 that contain technical corrections to existing guidance or affect 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.

4. ACCOUNTS RECEIVABLE, NET

Accounts receivable at June 30, 2013 and December 31, 2012 were comprised of the following:

	June 30, 2013			December 31, 2012
Accounts receivable, trade	$	2,936,828		$	4,645,193
Accounts receivable, unbilled		112,058			26,167
Costs and unearned income unbilled		200,000			257,500
Allowance for doubtful accounts		(351,510	)		(459,346	)
Total	$	2,897,376		$	4,469,514

In March 2013, the Company’s Baokai segment agreed to assign the accounts receivable balance from one of its customers, totaling $1,334,321, to the manufacturer of the product it distributes, Zibo Baoyun Chemical Plant (“ZBCP”). In exchange, the Company is relieved of its accounts payable obligations to ZBCP. Additionally, ZBCP agreed to pay the 2% gross margin earned by the Company related to these accounts receivables from the sale of its product by June 30, 2013. This amount has not yet been collected.

At December 31, 2012, the Company established a general provision related to its trade accounts receivable of $459,346 to an allowance for doubtful accounts by recording a charge to bad debt expense. During the six months ended June 30, 2013, the Company decreased its provision by recording a benefit to bad debt expense of $62,152 due to the settlement of accounts receivable balances previously reserved against. Furthermore, the Company’s ORC segment wrote off accounts receivables totaling $51,500 that it previously reserved against.

As of June 30, 2013, three customers accounted for approximately 13%, 17%, and 63% respectively, or approximately 93% of total accounts receivable.

As of December 31, 2012, three customers accounted for approximately 11%, 22% and 65%, respectively, or approximately 98% of total accounts receivable.

F-5

5. INVENTORY

Inventory at June 30, 2013 and December 31, 2012 was comprised of the following:

	June 30, 2013		December 31, 2012
Raw materials	$	173,071	$	170,417
Finished goods		—		163,520
Allowance for excess or obsolete inventory		—		(10,796	)
Total	$	173,071	$	323,141

At December 31, 2012, the Company established a general provision of $10,796 to an allowance for excess or obsolete inventory by recording a charge to cost of goods sold. During the six months ended June 30, 2013, the Company reduced its allowance for excess or obsolete inventory to zero following the sale of the inventory against which it recorded the provision.

6.  PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets at June 30, 2013 and December 31, 2012 were comprised of the following:

	June 30, 2013		December 31, 2012
Advances to suppliers, net of allowance	$	495,002	$	300,396
Prepaid expenses		137,213		94,682
Value added tax (VAT) credit		53,477		52,656
Other		1,268		867
Total	$	686,960	$	448,601

Advances made to suppliers are for the purchase of raw materials that are expected to be recovered within twelve months. At December 31, 2012, the Company established a general provision for doubtful accounts related to its advances to suppliers by recording a charge to bad debt expense of $9,314. During the six months ended June 30, 2013, the Company did not record any further adjustments to the provision.

Prepaid expenses and other assets represent prepayments made in the normal course and in which the economic benefit is expected to be realized within twelve months.

7.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2013 and December 31, 2012 was comprised of the following:

						June 30, 2013							December 31, 2012
			Accumulated			Net book				Accumulated			Net book
	Cost		Depreciation			Value		Cost		Depreciation			Value
Building	$	3,842,546	$	(442,065	)	$	3,400,481	$	3,783,611	$	(340,062	)	$	3,443,549
Furniture and equipment		9,985		(3,917	)		6,068		9,831		(2,831	)		7,000
Machinery and equipment		3,975,412		(954,706	)		3,020,706		3,914,440		(733,413	)		3,181,027
Automotive equipment		329,943		(137,617	)		192,326		324,883		(99,292	)		225,591
Office equipment		12,639		(5,312	)		7,327		12,445		(3,921	)		8,524
Construction in Progress		1,286,552		—			1,286,552		681,437		—			681,437
Total	$	9,457,077	$	(1,543,617	)	$	7,913,460	$	8,726,647	$	(1,179,519	)	$	7,547,128

F-6

Depreciation for the three months ended June 30, 2013 and June 30, 2012 totaled $172,349 and $167,498, respectively.

Depreciation expense for the six months ended June 30, 2013 and 2012 totaled $342,761 and $329,917, respectively.

Differences may arise in the amount of depreciation expense reported in the Company's operating results as compared to the corresponding change in accumulated depreciation due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity.

8.  BUSINESS COMBINATIONS

On May 10 and May 17, 2012, the Company entered into two share exchange agreements (the “Agreements”) with shareholders of TPE to acquire an aggregate controlling equity interest of its common stock. TPE is a renewable energy technology corporation located in California and Nevada that designs and installs proprietary modular Organic Rankine Cycle (“ORC”) units utilizing up to nine patented refrigerant mixtures to maximize heat recovery and convert waste heat directly from any process that generates waste heat or flue gas (such as industrial, solar, geothermal and biomass processes) converting it into electrical energy.

From June 14, 2012 through August 20, 2012, the Company paid $520,000 in cash and issued 255,356 shares of its common stock, valued at approximately $965,226 or $3.78 per share, in exchange for 24,753,768 shares of TPE’s common stock in accordance with the terms of the Agreements. These investments represent approximately a 50.3% equity interest in the common stock of TPE.

The acquisition was accounted for as a business combination under the acquisition method of accounting in accordance with generally accepted accounting principles.

Prior to gaining its controlling interest, the Company accounted for its investment in TPE as prescribed in ASC 323, “Investment — Equity Method and Joint Venture”. Accordingly, the Company adjusted the carrying amount of its investment to recognize its share of earnings or losses. During the six months ended June 30, 2013, the Company recorded an equity loss from its investment in TPE of $5,798.

Fair Value of Consideration Transferred and Recording of Assets Acquired, Liabilities Assumed and Non-controlling Interests

The following table summarizes the acquisition date fair value of the consideration transferred, identifiable assets acquired, liabilities assumed and non-controlling interests including an amount for goodwill:

Consideration:
Cash and cash equivalents	$	520,000
Common stock, 255,356 shares of ForceField common stock (1)		965,226
Fair value of total consideration transferred	$	1,485,226
Equity loss on investment in TransPacific Energy, Inc.		(5,798	)
Fair value of total consideration	$	1,479,428
Recognized amount of identifiable assets acquired and liabilities assumed:
Financial assets	$	442,629
Identifiable intangible asset – technology		1,583,000
Financial liabilities		(452,026	)
Deferred tax liability		(645,009	)
Total identifiable net assets		928,594
Noncontrolling interest		(792,000	)
Goodwill		1,342,834
	$	1,479,428

(1) The $3.78 per share price was determined by calculating the 30-day weighted average trading price of the Company’s common stock immediately preceding the initial June 14, 2012 funding of the transaction.

F-7

9.  GOODWILL AND  INTANGIBLE ASSETS, NET

The carrying amount of goodwill at June 30, 2013 and December 31, 2012 was comprised of the following:

	June 30, 2013		December 31, 2012
Goodwill – Wendeng He Xie Silicon Co., Ltd		—		583,183
Goodwill – TransPacific Energy, Inc.		1,342,834		1,342,834
Impairment charge		—		(607,422	)
Foreign currency translation adjustments		—		24,239
Goodwill, net at June 30, 2013	$	1,342,834	$	1,342,834

Intangible assets at June 30, 2013 and December 31, 2012 were comprised of the following:

		June 30, 2013							December 31, 2012
	Amortization	Gross					Net		Gross					Net
	Period	Carrying		Accumulated			Book		Carrying		Accumulated			Book
	(Years)	Amount		Amortization			Value		Amount		Amortization			Value
Intangible assets subject to amortization:
Customer relationships	3	$	1,643,126		(1,255,166	)		387,960	$	1,617,925	$	(966,261	)	$	651,664
Exclusive distribution rights	5		780,000		(130,000	)		650,000		780,000		(52,000	)		728,000
Land leasehold and use rights	50		2,042,195		(93,478	)		1,948,717		2,010,872		(71,553	)		1,939,319
Technology	15		1,583,000		(92,342	)		1,490,658		1,583,000		(39,575	)		1,543,425
Total		$	6,048,321		(1,570,986	)		4,477,335	$	5,991,797	$	(1,129,389	)	$	4,862,408

On August 27, 2012, the Company entered into a five year distribution agreement with Shanghai Lightsky Optoelectronics Technology Co., Ltd. (“Lightsky”) located in Shanghai, China whereby ForceField became the exclusive distributor of Lightsky LED lighting products in the United States, Canada and Mexico. Lightsky is an established manufacturer and seller of numerous patented LED lighting products in China and throughout Asia. ForceField issued 150,000 shares of its restricted common stock valued at $780,000, which represents the trading price of $5.20 per share of the Company’s common stock on the date of the transaction, as consideration for the rights. This amount will be amortized using the straight-line method over the five year expected life of the distribution rights. The shares are restricted for an eighteen-month period from their date of issuance. In order to maintain its exclusivity and qualify for any automatic renewal periods beyond the five-year period, ForceField must achieve certain performance milestones.

Amortization expense for intangible assets subject to amortization for the three months ended June 30, 2013 and 2012 totaled $212,279 and $142,747, respectively.

Amortization expense for intangible assets subject to amortization for the six months ended June 30, 2013 and 2012 totaled $422,905 and $289,330, respectively.

Differences may arise in the amount of amortization expense reported in the Company's operating results as compared to the corresponding change in accumulated depreciation due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity.

F-8

10.  RELATED PARTY RECEIVABLES - TRADE

Related party receivables were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Wendeng Huahai Chemical Co., Ltd.	$	224,118	$	413,061
Total	$	224,118	$	413,061

The amount represents trade receivables due from a related party; an entity in which a shareholder of the Company maintains an equity interest. The receivable is interest-free, unsecured and payable in accordance with the Company’s standard trade terms.

11.  OTHER ASSETS

Other assets were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Deposit – Department of Extra budgetary Fund, Wendeng	$	—	$	21,956
Total	$	—	$	21,956

12.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Accounts payable	$	2,914,290	$	3,689,065
Accrued liabilities:
Billings in excess of cost and earned income		172,200		257,500
Reserve for estimated losses on uncompleted contracts		29,524		121,442
Other accrued liabilities		93,237		300,079
Total accrued liabilities		294,961		679,021
Total accounts payable and accrued liabilities	$	3,209,251	$	4,368,086

Accounts payable and accrued liabilities primarily represent trade payables of the Company’s Chinese operating subsidiaries.

F-9

13.  LOANS PAYABLE

Loans payable at June 30, 2013 and December 31, 2012 were comprised of the following:

	June 30, 2013		December 31, 2012
Loans payable	$	17,000	$	—
Total	$	17,000	$	—

On May 1, 2012, the Company executed a letter agreement with a third party lender whereby it could borrow up to $100,000 Canadian dollars if needed. All borrowings under the agreement are unsecured, bear interest at a rate of 10% annually and mature effective December 31, 2012. In May and June 2012, the Company received proceeds aggregating $79,600 from the lender under the agreement. As of December 31, 2012, the Company had repaid all principal amounts borrowed on its letter agreement.

In May 2013, the terms of the letter agreement were extended until December 31, 2013 and the Company borrowed $17,000 on the facility.

On June 12, 2012, the Company received loan proceeds totaling $50,000 from a demand note entered into with a third party lender. All borrowings on the note are unsecured, bear interest at a rate of 12% annually and are payable on demand. On July 5, 2012, the Company repaid the principal amount totaling $50,000 on its demand note payable.

14.  RELATED PARTY PAYABLES    

Related party payables were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Advances from minority shareholder of noncontrolling interest (Wendeng)	$	5,576,673	$	5,488,840
Purchase consideration due minority shareholder of noncontrolling interest (Baokai)		88,647		163,647
Total	$	5,665,320	$	5,652,487

The minority shareholder of the Company’s Wendeng subsidiary made a series of advances, both pre and post-acquisition, to fund capital expenditures and plant expansion. These advances were made on an interest-free basis, are unsecured and payable on demand. Additionally, an officer of ForceField made a series of advances to fund working capital. These advances were also made on an interest-free basis, are unsecured and payable on demand.

The amount due to the minority shareholder of its Baokai subsidiary represents unpaid purchase consideration from the Company’s December 8, 2010 acquisition. This amount bears no interest, is unsecured and payable on demand.

15. INCOME TAXES                     

As of June 30, 2013, the Company had federal, state and foreign net operating loss carryforwards aggregating approximately $6.6 million that are available to offset future liabilities for income taxes. The Company has generally established a valuation allowance against these carryforwards based on an assessment that it is more likely than not that these benefits will not be realized in future years. The federal and state net operating loss carryforwards expire at various dates through 2032.

The Company remains subject to examination in federal, state and foreign jurisdictions in which the Company conducts its operations and files tax returns. These tax years range from 2008 through 2012. The Company believes that the results of current or any prospective audits will not have a material effect on its financial position or results of operations as adequate reserves have been provided to cover any potential exposures related to these ongoing audits.

The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provision of FASB ASC 740. 

F-10

16. DEBT

Debt was comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
9% Unsecured, convertible debentures	$	200,000	$	150,000
Less: Current portion		—		—
Long term debt	$	200,000	$	150,000

The following table summarizes the issuance of all unsecured, convertible debentures during the six month period ended June 30, 2013 and year ended December 31, 2012:

Issue Date	Interest Rate	Face Value		Maturity Date	Conversion Rate of Face Value to Common Shares
10/15/2011	9%	$	100,000	10/15/2014	0.125
11/16/2012	9%		50,000	11/16/2015	0.200
02/13/2013	9%		50,000	02/13/2016	0.200
Total		$	200,000

On October 15, 2011, the Company completed the private placement of an unsecured, convertible debenture in the amount of $100,000. The debenture carries an interest rate of 9% per annum, payable semiannually each April 15 and October 15, for a three-year term convertible at a fixed conversion price of $8.00 per share, which equates to 12,500 shares of the Company’s common stock.

On November 16, 2012 and February 13, 2013, the Company completed the private placement of two unsecured, convertible debentures each in the amount of $50,000. The debentures carry an interest rate of 9% per annum, payable semiannually, for a three-year term with a fixed conversion price of $5.00 per share, or 10,000 shares of the Company’s common stock if converted within the first year of issuance or a fixed conversion price of $6.00 per share, or 8,333 shares of the Company’s common stock if converted during the second or third year following issuance.

17. STOCKHOLDERS’ EQUITY

Reverse Stock Split

On October 9, 2012, the Company effectuated a one-for-two reverse split of its preferred and common stock. All references in these financial statements to the number of preferred shares, common shares or warrants, price per share and weighted average number of common shares outstanding prior to the 1:2 reverse stock split have been adjusted to reflect this stock split on a retroactive basis, unless otherwise noted.

Preferred Stock

ForceField is authorized to issue 12,500,000 shares of preferred stock at a par value of $0.001. No shares of preferred stock were issued and outstanding as of either June 30, 2013 or December 31, 2012.

Common Stock

ForceField is authorized to issue 37,500,000 shares of common stock at a par value of $0.001 and had 16,221,112 and 16,080,815 shares of common stock issued and outstanding as of June 30, 2013 and December 31, 2012, respectively.

F-11

Common Stock Issued in Private Placements

On September 5, 2011, the Company commenced a new offering of 1.5 million shares at $6.00 per share. In October 2011, the Company accepted a subscription agreement from an investor for 20,000 shares of its common stock and received $120,000 in gross proceeds pursuant to this new offering. In February 2012, the Company issued an additional 10,000 shares of its common stock to the investor as a result of the offering amendment described below.

In February 2012, the Company amended this offering by reducing the share price from $6.00 to $4.00 per share. Since the February 2012 amendment, the Company accepted subscription agreements from investors and issued 12,500 shares of its common stock for gross proceeds totaling $50,000. Additionally, the Company accepted subscription agreements from two of its officers and issued 37,500 shares of its common stock for gross proceeds totaling $150,000. The purchase of these shares is consistent with the terms of the Company’s private placement described above. There was no cost associated with the officer issuances.

On July 1, 2012, the Company modified its offering to include one stock purchase warrant per share of common stock sold. The stock purchase warrants are exercisable at $4.00 per share and expire one year from their date of issuance. Since the July 1, 2012 modification, the Company accepted subscription agreements from investors and issued 562,750 shares of its common stock and equal amount of stock purchase warrants for gross proceeds totaling $2,251,000. Using the Black-Scholes model, the Company allocated a value of $1,530,577 to these stock purchase warrants through the period ended December 31, 2012.

During the six month period ended June 30, 2013 the Company accepted subscription agreements from investors and issued 122,750 shares of its common stock and 135,250 common stock purchase warrants for gross proceeds totaling $491,000. Warrants have been accounted for as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Using the Black-Scholes model, the Company allocated a value of $375,339 to these stock purchase warrants through the period ended June 30, 2013.

Common Stock Issued in Exchange for Services

During the six month period ended June 30, 2013, the Company issued 5,400 shares of its common stock valued at $28,148 in exchange for consulting services. Additionally, the Company issued 7,848 shares of its common stock valued at $42,000 to its three independent directors in accordance with their board compensation agreements and 4,299 shares of its common stock valued at $22,674 in promotional activities to attendees of various financing events hosted by the Company. Each of these share issuances were valued based upon the closing trading share price of the Company’s common stock on their respective dates of award.

Common Stock Issued in the Acquisition of a Business

Effective August 20, 2012, the Company exchanged 255,356 shares of its common stock valued at $965,226, or $3.78 per share, in connection with its equity investment in TPE (see “Note 8 – Business Combinations”).

Common Stock Issued in the Acquisition of Distribution Rights

On August 27, 2012, the Company entered into a five year distribution agreement with Lightsky located in Shanghai, China whereby it became the exclusive distributor of Lightsky LED lighting products in the United States, Canada and Mexico. The Company issued 150,000 shares of its restricted common stock valued at $780,000, or $5.20 per share. The shares are restricted for an eighteen month period from their date of issuance (see “Note 9 – Goodwill and Intangible Assets, Net”).

Stock Purchase Warrants

The following table reflects all outstanding and exercisable warrants for the periods ended December 31, 2012 and June 30, 2013. All stock warrants are exercisable for a period of one year from the date of issuance.

F-12

	Number of Warrants Outstanding		Weighted Average Exercise Price		Remaining Contractual Life (Years)
Balance, December 31, 2012		562,750	$	4.00	$	0.20
Warrants issued		135,250	$	4.00		0.68
Warrants exercised		—		—		—
Balance June 30, 2013		698,000	$	4.00		0.29

———————

(1) The remaining contractual life of the warrants outstanding as of June 30, 2013 ranges from 0.01 to 0.93 years.

The value of the common stock options and warrants has been determined using the following Black Scholes methodology:

	June 30, 2013			December 31, 2012
Expected dividend yield (1)		0.00	%		0.00	%
Risk-free interest rate (2)		0.13 – 0.16	%		0.16 – 0.21	%
Expected volatility (3)		111.21 – 146.37	%		111.94 – 152.31	%
Expected life (in years)		1.00			1.00

______________

(1)	The Company has no history or expectation of paying cash dividends on its common stock.
(2)	The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant.
(3)	The volatility of the Company’s common stock is based on trading activity for the previous one year period ended at each stock purchase warrant contract date.

18. COMMITMENTS

ForceField has entered into a number of engagement agreements for advisory and consulting services on a non-exclusive basis to obtain new equity capital and debt financing. In the event that the Company receives new capital proceeds from a source identified 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 terms and condition of financing are subject to Company approval.

19.  SEGMENT INFORMATION

As a result of the acquisition of its equity interest in TPE and exclusive distribution rights for Lightsky LED lighting products, the Company reassessed its requirement for segment reporting based on the operating and reporting structure of the combined company.

The Company utilized several criteria, including (i) the Company’s organizational structure, (ii) the manner in which the Company’s operations are managed, (iii) the criteria used by the Company’s Chief Executive Officer, the Chief Operating Decision Maker (“CODM”), to evaluate segment performance and (iv) the availability of separate financial information, as a basis to identify its operating segments.

The Company determined that it has four reportable business segments: Baokai, Wendeng, ORC and LED. The Baokai segment consists of the business of Zibo Baokai Commerce and Trade Co., Ltd., a company based in the Shandong province of China that distributes the trichlorosilane production of Zibo Baoyun Chemical Plant. The Wendeng segment consists of the operations of Wendeng He Xie Silicon Industry Co., Ltd., a company based in the Shandong province of China that directly manufactures and sells trichlorosilane. The ORC segment consists of the operations of TransPacific Energy, Inc., a company based in California and Nevada that designs and installs proprietary modular Organic Rankine Cycle units utilizing patented multiple refrigerant mixtures to maximize heat recovery and convert waste heat directly from industrial processes, solar and geothermal, biomass converting it into electrical energy. The LED segment consists of the business of ForceField USA that distributes LED lighting products manufactured in China by Shanghai Lightsky Optoelectronics Technology Co., Ltd. in the major North American markets.

The accounting policies of the reportable segments are the same as those described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements. The Company’s CODM reviews financial information presented on a consolidated basis, accompanied by disaggregated information by segment for purpose of evaluating financial performance.

F-13

Segment Results

The following table sets forth operations by segment for the three months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	16,944		$	139,495		$	6,535		$	54,510		$	—		$	217,484
2012	$	527,052		$	(462	)	$	—		$	—		$	—		$	526,590
Cost of goods sold:
2013	$	16,605		$	183,408		$	(5,915	)	$	27,360		$	—		$	221,458
2012	$	516,511		$	(3,292	)	$	—		$	—		$	—		$	513,219
Gross margin:
2013	$	339		$	(43,913	)	$	12,450		$	27,150		$	—		$	(3,974	)
2012	$	10,451		$	2,830		$	—		$	—		$	—		$	13,371
Operating expenses:
2013	$	64,092		$	395,259		$	25,678		$	89,572		$	388,951		$	963,552
2012	$	110,836		$	571,903		$	—		$	—		$	288,557		$	971,296
Other income (expense):
2013	$	—		$	—		$	59		$	—		$	(5,234	)	$	(5,175	)
2012	$	—		$	—		$	—		$	—		$	(3,729	)	$	(3,729	)
Provision for income taxes:
2013	$	(15,938	)	$	(109,793	)	$	—		$	—		$	—		$	(125,731	)
2012	$	(25,074	)	$	(142,268	)	$	—		$	—		$	—		$	(167,342	)
Net income (loss):
2013	$	(47,815	)	$	(329,379	)	$	(13,169	)	$	(62,422	)	$	(394,185	)	$	(846,970	)
2012	$	(75,221	)	$	(426,805	)	$	—		$	—		$	(292,286	)	$	(794,312

F-14

The following table sets forth operations by segment for the six months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	53,917		$	155,713		$	214,890		$	78,109		$	—		$	502,629
2012	$	762,011		$	272,206		$	—		$	—		$	—		$	1,034,217
Cost of goods sold:
2013	$	52,839		$	203,724		$	197,140		$	43,622		$	—		$	497,325
2012	$	746,771		$	241,773		$	—		$	—		$	—		$	988,544
Gross margin:
2013	$	1,078		$	(48,011	)	$	17,750		$	34,487		$	—		$	5,304
2012	$	15,240		$	30,443		$	—		$	—		$	—		$	45,673
Operating expenses:
2013	$	(31,066	)	$	751,431		$	63,178		$	193,794		$	821,732		$	1,799,069
2012	$	110,836		$	1,060,909		$	—		$	—		$	546,380		$	1,718,125
Other income (expense):
2013	$	—		$	—		$	116		$	—		$	(9,709	)	$	(9,593	)
2012	$	—		$	—		$	—		$	—		$	(5,979	)	$	(5,979	)
Provision for income taxes:
2013	$	8,036		$	(199,860	)	$	—		$	—		$	—		$	(191,824	)
2012	$	(23,899	)	$	(257,619	)	$	—		$	—		$	—		$	(281,518	)
Net income (loss):
2013	$	24,108		$	(599,582	)	$	(45,312	)	$	(159,307	)	$	(831,441	)	$	(1,611,534	)
2012	$	(71,697	)	$	(772,857	)	$	—		$	—		$	(552,359	)	$	(1,396,913	)

Operating segments do not sell products to each other, and accordingly, there is no inter-segment revenue to be reported.

Total Assets

The following table sets forth the total assets by segment at June 30, 2013 and December 31, 2012:

	TCS
	Baokai		Wendeng		ORC		LED		Corporate		Consolidated
Total assets:
2013	$	531,576	$	13,433,493	$	3,360,260	$	732,303	$	109,568	$	18,167,200
2012	$	1,841,600	$	14,070,312	$	3,370,300	$	769,056	$	461,781	$	20,513,049

F-15

Goodwill, Intangible and Long-Lived Assets

The following table sets forth the carrying amounts of goodwill, intangible and long-lived assets by segment at June 30, 2013 and December 31, 2012:

	TCS
	Baokai		Wendeng		ORC		LED		Corporate		Consolidated
Goodwill:
2013	$	—	$	—	$	1,342,834	$	—	$	—	$	1,342,834
2012	$	—	$	—	$	1,342,834	$	—	$	—	$	1,342,834
Intangible assets:
2013	$	—	$	2,336,677	$	1,490,658	$	650,000	$	—	$	4,477,335
2012	$	—	$	2,590,983	$	1,543,425	$	728,000	$	—	$	4,862,408
Property, plant and equipment:
2013	$	—	$	7,913,460	$	—	$	—	$	—	$	7,913,460
2012	$	—	$	7,547,128	$	—	$	—	$	—	$	7,547,128

Amortization expense totaled $146,895 for Wendeng, $26,384 for ORC and $39,000 for LED for the three months ended June 30, 2013. Depreciation expense totaled $172,349 for Wendeng for the three months ended June 30, 2013.

Amortization expense totaled $292,138 for Wendeng, $52,767 for ORC and $78,000 for LED for the six months ended June 30, 2013. Depreciation expense totaled $342,761 for Wendeng for the six months ended June 30, 2013.

Capital expenditures totaled $589,404 for Wendeng during the six months ended June 30, 2013.

Except as noted above, no other reportable segment recorded depreciation or amortization expense, nor did they incur any capital expenditures during the six months ended June 30, 2013.

Customer Concentration and Credit Risk

For the three month period ended June 30, 2013, one customer accounted for 100% of Baokai's sales; four customers accounted for 100% of Wendeng’s sales, at individual concentration levels of 12%, 21%, 24% and 43%; and one customer accounted for 69% of ORC’s revenue; and three customers accounted for 100% of LED's sales, at individual concentration levels of 13%, 28% and 59%.

For the six month period ended June 30, 2013, two customers accounted for 100% of Baokai's sales, at individual concentration levels of 31% and 69%; four customers accounted for 100% of Wendeng’s sales, at individual concentration levels of 19%, 21%, 22% and 38%; two customers accounted for 98% of ORC’s revenue, at individual concentration levels of 40% and 58%; and four customers accounted for 93% of LED's sales, at individual concentration levels of 10%, 20%, 23% and 40%.

At June 30, 2013, one customer accounted for approximately 84% of Baokai’s accounts receivable. At June 30, 2013, two customers accounted for approximately 98% of Wendeng’s accounts receivable. Concentration levels for these two customers were 17% and 81% of Wendeng’s total trade receivables.

Geographic Information

All of the Company’s long-lived assets are located in China.

F-16

During the three and six months ended June 30, 2013, all of the Company’s sales for the Wendeng and Baokai segments were in China; all of the Company’s sales for the ORC segment were in the United States; and all of the Company’s sales for the LED segment were in the United States with the exception of $5,407 in sales in Costa Rica.

20. DEFINED CONTRIBUTION PLAN

Pursuant to the relevant Chinese regulations, the Company is required to make contributions at a rate of 28% of employees’ salaries and wages to a defined contribution retirement plan organized by a state-sponsored social insurance plan in respect of the retirement benefits for the Company’s employees in the China. The only obligation of the Company with respect to the retirement plan is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the statements of operations. The Company contributed $10,178 and $17,055 for the three and six month period ended June 30, 2013, respectively, compared to $3,634 and $11,710 for the same three and six month periods ended June 30, 2012, respectively.

21. SUBSEQUENT EVENTS

On April 25, 2013, the Company entered into a letter of intent to acquire a 60% interest in 1-800 NY Bulbs Ltd, a Mamaroneck, New York based company with over 25 years of experience and a strong reputation for providing premium lighting design, supply and logistics, and installation service options to a variety of clients and high profile enterprises.

On July 31, 2013, the letter of intent expired without a consensual agreement to extend the terms. At this time, the Company is no longer pursuing the acquisition of a controlling interest in 1-800 NY Bulbs Ltd.

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

F-17

ITEM 2.        MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements in this 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 (“PSLRA”). 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 PSLRA, and are included in 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. Some of the factors that could cause results or events to differ materially from current expectations include, but are not limited to: general economic, market or business conditions; general stock market performance; the performance of the solar energy industry in general; an increasingly competitive business environment; changing regulatory conditions or requirements; changing government incentive programs for solar energy projects that utilize PV panels; changing alternative energy technologies; the price of trichlorosilane (“TCS”) sold within China and outside of China; the price of, and demand for, polysilicon; the price of, and demand for, solar PV panels; the level of production by the Wendeng factory; the decision by the NASDAQ Capital Market to accept our application for listing; our ability to successfully manage our TCS business in China; that Wendeng is one of the lowest cost producers of TCS and that we will emerge as one of the strongest TCS manufacturers in 2013; generating revenue from ORC units and LED lighting sales; entering into definitive agreements on LED trials currently in process, obtaining financing for ORC and LED installations; the acceptance of the lighting market to LED technology; the price of electricity in various jurisdictions worldwide; our successful management of outside contractors; the market acceptance of the ORC technology; and a decision by the two current ORC clients to order additional ORC units.  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 Securities and Exchange Commission.

TCS Overview

Since November 2011, the low price of polysilicon coupled with the significant oversupply of polysilicon has had a material adverse impact on the price that we could sell TCS for and the level of plant utilization at Wendeng and our exclusive supplier to Baokai. TCS is critical raw material necessary to produce polysilicon and represent approximately 20% of the cost of polysilicon. The low cost of polysilicon has negatively impacted our revenues and results of operations. Our Wendeng facility, except for a brief period when it operated in November 2012, has been closed since December 2011. Our Wendeng facility sold some of its existing TCS inventory during 2012 and 2013 at a loss. At various times during 2012 and 2013 we had expected Wendeng to open.  However, the ongoing low pricing of polysilicon and the “dumping” of pre-existing polysilicon inventories below cost by many polysilicon companies in order to generate cash flow, has resulted in continuing low price bids from our customers to supply them TCS at levels which would not enable us to operate profitably. During 2013 our cash operating losses at Wendeng have been negligible. These losses are significantly less than the loss we would have incurred by producing TCS and selling it at the market price below our cash cost of production. Therefore, our operating losses were lower by staying closed rather than manufacturing TCS at a significantly higher loss. The world polysilicon prices have decreased drastically from selling at a high of $475 per kilogram (“kg”) in 2008 to a low of $15.83 per kg in December 2012.

4

Polysilicon average spot prices have been recently increasing somewhat, most recently trading at a range between approximately $17.00 to $20.00 per kg. according to Mercom Solar Market Intelligence Report. Due to the current polysilicon oversupply situation, we believe that due to published reports in many publications worldwide, an industry consolidation has occurred and is continuing. Due to our manufacturing process and low cost of production, we believe we will eventually emerge as one of the strongest remaining stand-alone TCS entities.

Despite recent modest upticks in polysilicon pricing and receiving a significant conditional order in March 2013 from GCL-Poly Energy Holdings Ltd, the world's biggest polysilicon manufacturer, market conditions have not allowed us to open the Wendeng facility to fulfill the order at a pricing level that will enable us to operate at a cash profit. We believe that due to the slowly rising prices in 2013 and due the continuing consolidation of TCS manufacturers that Wendeng will open in 2013, however, due to ongoing need of many polysilicon makers in China to sell their existing inventory below cost to generate cash flow, the constantly changing prices of raw materials necessary to manufacture TCS, and since the TCS industry operates on a “spot price” market; there can be no assurances as to the timing.

Baokai, our TCS distribution company, has been open and closed at various periods during 2012 and through early 2013. This pattern is expected to continue during the remainder of 2013 based upon the market conditions described above. During periods when the Baokai distribution segment isn’t open it operates at an approximate breakeven level because we did not incur any significant marketing or business development expenses directly associated with Baokai operations.

ORC Overview

Prior to our acquisition of TPE in August 2012, TPE entered into two separate agreements with a large steel company in California (1 unit) and an aerospace company in Dallas (1 unit) to sell them ORC units. These ORC units are in the process of being built and are the first ORC units that will operate with our proprietary TPE fluids. These units will generate a breakeven gross margin for us because the cost of these ORC units includes very substantial one-time initial R&D and engineering work of approximately $400,000-$500,000. The unit in Dallas has been completed and is now going through its initial testing phase by the client. The unit in California has taken longer than anticipated to complete and is not expected to be operational until 2014. The R&D expenditures and engineering work on the initial two units can be leveraged and will reduce the cost of future ORC units. These costs were substantially borne TPE prior to our acquisition of them, and do not impact our profitability. During the six month period ended June 30, 2013 we have recorded $214,890 in revenue from these two ORC units. If the ORC units operate successfully at each location we expect to receive additional orders for ORC units from both companies although there can be no assurances as to the amount, and of timing, when additional units will be ordered.

We do not expect to record ORC revenue from any new ORC projects in 2013 if we enter into them in 2013 due to the long lead time to negotiate a power purchase agreement with a potential end user, and the time it takes to manufacture the product. The amount of time to complete an ORC project has taken significantly longer than we initially anticipated when we acquired TPE. Currently, the amount of time to complete a project is estimated between nine and twelve months, if adequate financing can be obtained.

On January 18, 2013, we entered into a definitive agreement to install up to four of our ORC units at the Zibo Qilin Fushan Iron & Steel Company (“Qilin”). Qilin, a steel producing company that is located in the Shandong province of China, is the subsidiary of a $28 billion Chinese entity. TPE determined that the Qilin plant can host four ORC units and generate up to 1.3 Megawatts of incremental electrical energy, annually. In the first phase of the project, we will install two ORC units that will generate approximately 650 Kilowatts of supplemental electricity. We will retain ownership of the ORC units and sell the supplemental electricity generated back to Qilin at a price discounted from the price they pay to their local utility company to purchase electricity. We would expect to generate approximately $550,000 in revenue annually, for a twenty-year period. Upon successful completion of the first phase, we can at our discretion install two additional ORC units also generating 650 Kilowatts of supplemental electricity. The successful completion of the project is expressly contingent on our obtaining financing on favorable terms in order to build our ORC units. To date we have been unsuccessful in obtaining financing for this installation. If we cannot secure financing on this project by the end of 2013, the project may be cancelled.

5

We continue to assess other potential ORC projects in the United States and internationally and believe that we will enter into additional contracts that will generate ORC revenue beginning in 2014, although there can be no assurances.

LED Overview

During the latter half of 2012 and throughout the first half of 2013, we have focused the majority of our LED marketing efforts in territories in Latin America and other parts of the world where the cost per kilowatt hour of electricity is very high, and in which the opportunity to generate significant energy savings where changing from traditional lighting to LED lighting is the most compelling. Additionally, we have made significant LED bid proposals and are involved in trials in Europe, Latin America and the United States. A summary of some our activity (which is not all inclusive) is as follows:

Signed Agreements

●   In May 2013 we entered into an agreement with a Germany company and an initial purchase order for the sale and installation of its LED lighting products at two public schools.

●   In August, 2013 we received a small initial purchase order from a division of a Fortune 100 oil company for our  Lightsky brand LED High Bay lights at the oil company’s Texas facility; as well as the commencement of trials using our LED lighting products at three additional locations for the same oil company.

Signed Letters of Intent (“LOI”)

●   On July 16, 2013 we signed a Letter of Intent (“LOI”) with Empresa de Servicios Públicos de Heredia (“ESPH”), a utility company based in Heredia, Costa Rica, for the installation of 19,000 of its Model SL3 LED streetlights to replace existing lighting in ESPH’s territory. If we are successful in winning the project and financing can be arranged, the project could generate more than $21 million in revenue for ForceField over the ten-year term of the agreement based upon a shared savings model.

●   On July 25, 2013 we expanded the size and scope of our proposal under our previously announced LOI with ESPH to now include a 30-day residential home trial of smart electric meters (“smart meters”) that, if successful, could result in the installation of approximately 80,000 smart meters in residential homes located in Heredia’s jurisdiction.The total value of the project could exceed $20 million in revenue if fully implemented.

LED Streetlights Installed or Being Tested at:

●   CNFL(Costa Rica Utility) Costa Rica

●   Coopelesca (Costa Rica Utility) Costa Rica

●   ESPH (Costa Rica Utility) Costa Rica

●   At key locations in Nicaragua, Austria, and Germany

6

LED High Bay Lights Installed (Designed for Usage in Large Warehouse Facilities with High Ceilings) and Being Tested at:

●   A division of Jacobson Warehouse Co. Inc., in Plaquemine, LA

●   A division of International Paper in Bogalusa, LA

●   JohnPac, Inc. in Crowley, LA

●   Harbor Pallets & Packaging, Inc, LA

●   A division of a Fortune 100 oil company

LED Tubes and Other Products Installed and Being Tested at:

●   A division of one of the largest privately held companies in the world located in Costa Rica

●   One location in Costa Rica of a national brands franchisee that operates various brands of franchises at 150 locations across Latin America.

●   Harbor Pallets & Packaging, Inc., Louisiana

●   Hospital Clinica Biblica, Costa Rica

●   Key locations in the United States, Germany and Ireland

The realization of revenue from the activity summarized above will be dependent on the successful completion of initial trials, consummation of definitive agreements, delivery of LED product by our LED supplier, and the ability of both the Company and the end-users to obtain financing on reasonable terms.  We believe we will be successful in obtaining some of these bids and generating significant revenue over a multi-year period, however there can be no assurances that all the conditions necessary to commence the projects we are successful in obtaining, can be met.

Also as part of our LED marketing activity, we expect to be able to offer non-recourse third party financing to potential LED clients. In March 2013 we entered into an agreement with two of the top ten U.S. banks to provide such financing with potential credit limits in the millions of dollars. This program enables them to obtain, in some cases up to 100% financing for an LED project with us, at competitive rates depending on the credit-worthiness of the client. Additionally, we are in discussions with banks in Latin America to provide similar type financing, and financing directly to us for LED contracts we are able to obtain. There can be no assurances that these financing programs will be successful or that our targeted clients will qualify for such financing.  To date all financing of LED projects has come from funding we have provided, or has been paid for the sub-distributor or the client.

We have recorded $78,109 in revenues from the sale of our LED products for the six month period ended June 30, 2013. We believe we that the initial orders, trials and bid proposals currently outstanding will generate will result in significant LED revenue in 2013 and beyond, although there can be no assurances.

7

Results of Operations for the Three and Six Months Ended June 30, 2013 and 2012

The following table sets forth operations by segment for the three months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	16,944		$	139,495		$	6,535		$	54,510		$	—		$	217,484
2012	$	527,052		$	(462	)	$	—		$	—		$	—		$	526,590
Cost of goods sold:
2013	$	16,605		$	183,408		$	(5,915	)	$	27,360		$	—		$	221,458
2012	$	516,511		$	(3,292	)	$	—		$	—		$	—		$	513,219
Gross margin:
2013	$	339		$	(43,913	)	$	12,450		$	27,150		$	—		$	(3,974	)
2012	$	10,451		$	2,830		$	—		$	—		$	—		$	13,371
Operating expenses:
2013	$	64,092		$	395,259		$	25,678		$	89,572		$	388,951		$	963,552
2012	$	110,836		$	571,903		$	—		$	—		$	288,557		$	971,296
Other income (expense):
2013	$	—		$	—		$	59		$	—		$	(5,234	)	$	(5,175	)
2012	$	—		$	—		$	—		$	—		$	(3,729	)	$	(3,729	)
Provision for income taxes:
2013	$	(15,938	)	$	(109,793	)	$	—		$	—		$	—		$	(125,731	)
2012	$	(25,074	)	$	(142,268	)	$	—		$	—		$	—		$	(167,342	)
Net income (loss):
2013	$	(47,815	)	$	(329,379	)	$	(13,169	)	$	(62,422	)	$	(394,185	)	$	(846,970	)
2012	$	(75,221	)	$	(426,805	)	$	—		$	—		$	(292,286	)	$	(794,312

The following table sets forth operations by segment for the six months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	53,917		$	155,713		$	214,890		$	78,109		$	—		$	502,629
2012	$	762,011		$	272,206		$	—		$	—		$	—		$	1,034,217
Cost of goods sold:
2013	$	52,839		$	203,724		$	197,140		$	43,622		$	—		$	497,325
2012	$	746,771		$	241,773		$	—		$	—		$	—		$	988,544
Gross margin:
2013	$	1,078		$	(48,011	)	$	17,750		$	34,487		$	—		$	5,304
2012	$	15,240		$	30,443		$	—		$	—		$	—		$	45,673
Operating expenses:
2013	$	(31,066	)	$	751,431		$	63,178		$	193,794		$	821,732		$	1,799,069
2012	$	110,836		$	1,060,909		$	—		$	—		$	546,380		$	1,718,125
Other income (expense):
2013	$	—		$	—		$	116		$	—		$	(9,709	)	$	(9,593	)
2012	$	—		$	—		$	—		$	—		$	(5,979	)	$	(5,979	)
Provision for income taxes:
2013	$	8,036		$	(199,860	)	$	—		$	—		$	—		$	(191,824	)
2012	$	(23,899	)	$	(257,619	)	$	—		$	—		$	—		$	(281,518	)
Net income (loss):
2013	$	24,108		$	(599,582	)	$	(45,312	)	$	(159,307	)	$	(831,441	)	$	(1,611,534	)
2012	$	(71,697	)	$	(772,857	)	$	—		$	—		$	(552,359	)	$	(1,396,913	)

8

Operating segments do not sell products to each other, and accordingly, there is no inter-segment revenue to be reported.

Revenue

Sales for the three months ended June 30, 2013 totaled $217,484 compared to $526,590 for the three months ended June 30, 2012.

The decline in sales for the three months ended June 30, 2013 is primarily attributable to a material decline in sales at Baokai of $510,108, partially offset by an increase in sales of $139,957 at Wendeng; and sales of $6,535 for the ORC segment and $54,510 in the LED segment. Neither the ORC segment nor the LED segment were operating during the three months ended June 30, 2012.  All sales for Baokai and Wendeng segments during these periods were recorded within China. All revenue recognized by our ORC segment, and LED segments was recorded within the United States for the month period ended June 30, 2013

Sales for the six months ended June 30, 2013 totaled $502,609 compared to $1,034,217 for the six months ended June 30, 2012. The decline in sales for the three months ended June 30, 2013 is primarily attributable to a material decline in sales at Baokai of $708,094, partially offset by an increase in sales of $116,493 at Wendeng; and sales of $214,890 for the ORC segment and $54,510 in the LED segment. Neither the ORC segment nor the LED segment were operating during the six months ended June 30, 2012.  All sales for Baokai and Wendeng segments during these periods were recorded within China. All revenue recognized by our ORC segment, and substantially all revenue for the LED segments was recorded within the United States for the six month period ended June 30, 2013.

On a going forward basis our primary focus and selling and marketing efforts will be on increasing revenue in the LED and ORC operating segments. We continue to believe that the TCS market pricing will eventually improve to a level where we can make a cash profit on manufactured TCS, however, there can be no assurances our LED or ORC selling efforts will be successful, or as to the timing and extend of recovery in the TCS markets

Gross Margin

We calculate gross margin by subtracting cost of goods sold from sales. Gross margin percentage is calculated by dividing gross margin by sales.

Gross margin for the three months ended June 30, 2013 was $(3,974) compared to $13,371 for the three months ended June 30, 2012. Gross margin percentage for the three months ended June 30, 2013 was (1.8%) compared to 2.5% for the three months ended June 30, 2012.

Gross margin for the six months ended June 30, 2013 was $5,304, compared to $45,673 for the six months ended June 30, 2012. Gross margin percentage for the six months ended June 30, 2013 was 1.1%, compared to 4.4% for the six months ended June 30, 2012.

The decrease in gross margin in both the three and six month periods ended June 30, 2013 compared to the same periods in the prior is primarily attributable to a negative gross margin of $43,913 at Wendeng during the three months ended June 30, 2013. We made this sale below cost from existing inventory to help generate liquidity. With the exception of Baokai gross margins which remain contractually at 2%, our gross margins and gross margin percentage continue to be adversely impacted by the low pricing levels in the polysilicon market and the relatively low level of sales in all segments.

Due to the low volume of initial sales in our LED and ORC segments, we believe the 2013 year to date margins of 44.2% and 8.3% are not indicative of the sustainable margins in these segments over a higher volume of revenue. We believe ORC margins will increase and LED margins will decrease over current levels as revenue continues to grow.

Professional Fees

Professional fees totaled $192,393 for the three months ended June 30, 2013, compared to $148,014 for the three months ended June 30, 2012.  Professional fees totaled $381,969 for the six months ended June 30, 2013, compared to $289,724 for the six months ended June 30, 2012. Professional fees consist of legal, accounting and other consulting or service provider fees. Most of our professional services are attributable to our status as a publicly traded company. The increase in professional fees for the both the three and six month periods ended June 30, 2013 compared to the same periods in 2012 is attributable to our increased activity in our two new operating segments.

9

General and Administrative Expenses

General and administrative (“G&A”) expenses totaled $771,159 for the three months ended June 30, 2013, compared to $823,282 for the three months ended June 30, 2012. G&A expenses totaled $1,417,100 for the six months ended June 30, 2013, compared to $1,428,401 for the six months ended June 30, 2012.

Our G&A expenses for the six months ended June 30, 2013 are substantially comparable to G&A expenses for the same period in 2012. The primary components of our G&A expenses include salaries and benefits not directly associated with our manufacturing processes, depreciation on non-production capital assets, amortization, facility costs and maintenance, investor relations activities and various administrative and office expenses.

Provision for Income Taxes (Benefit)

We recorded an income tax benefit of $125,731 for the three months ended June 30, 2013, compared to a benefit of $167,342 for the three months ended June 30, 2012.

We recorded an income tax benefit of $191,824 for the six months ended June 30, 2013, compared to a benefit of $281,512 for the six months ended June 30, 2012.

Our provisions for income taxes or income tax benefits include the results of the operations realized at our Chinese subsidiaries. They are recorded at a 25% tax rate, which is the statutory rate in China for all earnings. Any profits generated in China are not available for offset against net operating losses in the United States.

As of June 30, 2013, we had federal, state and foreign net operating loss carryforwards aggregating $6,670,326 that are available to offset future liabilities for income taxes. We have generally established a valuation allowance against these carryforwards based on an assessment that it is more likely than not that these benefits will not be realized in future years. The federal and state net operating loss carryforwards expire at various dates through 2032.

Net loss Attributable to ForceField's Common Shareholders

For the three months ended June 30, 2013, we incurred a net loss of ($846,970), compared to a net loss of ($794,312) for the three months ended June 30, 2012. After deducting the net loss from noncontrolling interests, our net loss attributable to our common shareholders was ($697,704) and ($616,068) for each period respectively.

For the six months ended June 30, 2013, we incurred a net loss of ($1,611,534), compared to a net loss of ($1,396,913) for the six months ended June 30, 2012. After deducting the net loss from noncontrolling interests, our net loss attributable to our common shareholders was ($1,345,405) and ($1,080,601) for each period respectively.

The weighted average number of basic and fully diluted shares outstanding for the three months ended June 30, 2013 was 16,187,281 compared to 15,057,587 for the three months ended June 30, 2012.

The weighted average number of basic and fully diluted shares outstanding for the six months ended June 30, 2013 was 16,132,284 compared to 15,010,314 for the six months ended June 30, 2012.

There are no dilutive equivalents included in our calculation of fully diluted shares for the three and six months ended June 30, 2013 and 2012, since their inclusion would be anti-dilutive due to our net loss per share.

Liquidity and Capital Resources

At June 30, 2013, we had cash on hand of $377,120. Of this amount, $266,822 was on deposit with institutions located in the United States and $110,298 in China. For the foreseeable future, we do not intend to repatriate any funds from China to support our operations within the United States. Prior to our acquisition of a controlling interest in TPE and the exclusive North American distribution rights to Lightsky products, our U.S.-based operations consisted solely of a holding company that incurred expenses and had no revenue generating activities. Proceeds generated from private placements of our common stock, and to a much lesser extent short terms loans and convertible notes have been the primary sources of funding for our U.S.-based operations. We believe our current cash position and ability to raise funds through the sale of new equity and convertible notes, coupled with the revenue potential of our newly acquired U.S.-based businesses, will be sufficient to fund our U.S. activities for the next twelve months. Furthermore, we expect to generate positive cash flow over the next twelve months which will supplement our cash position.

10

At June 30, 2013, we had a working capital deficit of $5,834,848. The deficit is primarily attributable to the related party payable of $5,665,320 due to the minority shareholder of Wendeng. These funds were used to build and expand the Wendeng facility. Our Wendeng subsidiary minority shareholder is currently not requesting repayment of this amount; however, since this is an interest free demand loan to the Company, it has been categorized as a current liability.

Net cash used in operating activities was $465,009 for the six months ended June 30, 2013, compared to net cash used in operating activities of $338,965 for the six months ended June 30, 2012. The increase in net cash used during 2012 as compared to 2012 is attributable to an increase in our net loss to ($1,611,534) from a net loss of ($1,396,913) in the prior year period; partially offset by an increase in non-cash depreciation and amortization in 2013 compared to 2012 and a decrease in the net change in our operating assets and liabilities over the prior year period.

Net cash used in investing activities was $589,404 for the six months ended June 30, 2013, compared to net cash used in investing activities of $340,017 for the six months ended June 30, 2012. The net cash used in the current period is attributable to the purchase of $589,404 in capital assets at Wendeng compared to $190,017, offset by a decrease of $150,000 of cash in 2012 used to acquire controlling interest in TPE.

Net cash provided by financing activities was $433,900 for the six months ended June 30, 2013, compared to $364,600 the six months ended June 30, 2012. We received $441,900 in net proceeds from the issuance of new equity in 2013, compared to $195,000 in the prior year period. Additionally, we received $67,000 in short term loan proceeds in 2013 compared to $129,600 in 2012 and a $40,000 advance from an officer to help fund our corporate expenditures.  Furthermore, we made $75,000 in repayments of related party payables during the six month period 2013.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. 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.

Refer to Note 2 — Summary of Significant Accounting Policies in our audited 2012 consolidated financial statements in Form 10-K for a summary of our significant accounting policies.

Off Balance Sheet Arrangements

As of June 30, 2013, 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.

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.

11

PART II – OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

None. 

ITEM 1A.     RISK FACTORS

Information on risk factors can be found in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the transition period ended December 31, 2012, filed with the Securities and Exchange Commission on April 16, 2012. There were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the transition period ended December 31, 2012.

ITEM 2.        UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended June 30, 2013, we accepted subscription agreements from investors and correspondingly sold 37,500 shares of its common stock pursuant to its current private placement offering, and received $150,000 in gross proceeds. The proceeds, net of commissions, were $135,000. In connection with the private placement, we issued warrants to purchase 37,500 shares of our common stock at an exercise price of $4.00 per share for a term of one year. The offer and sale of the securities was exempt from registration under the Securities Act of 1933 pursuant to Rule 506 of Regulation D.

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.        MINE SAFETY DISCLOSURES

None.

ITEM 5.        OTHER INFORMATION

None.

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ITEM 6.        EXHIBITS

Exhibit  Number	Description of Exhibit
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of the 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.

13

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.

	FORCEFIELD ENERGY INC.
August 19, 2013	By:	/s/ David Natan
		David Natan
		Chief Executive Officer

August 19, 2013	By:	/s/ Jason Williams
		Jason Williams
		Chief Accounting and Financial Officer

 14

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David Natan, certify that;

(1) I have reviewed this quarterly report on Form 10-Q of ForceField Energy Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2013	By:	/s/ David Natan
		David Natan

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Jason Williams, certify that;

(1) I have reviewed this quarterly report on Form 10-Q of ForceField Energy Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2013	By:	/s/ Jason Williams
		Jason Williams

EX-32

EXHIBIT 32

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

In connection with the accompanying Quarterly Report on Form 10-Q of ForceField Energy Inc. for the quarter ended March  31, 2013 (“Report”), we certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents in all material respects, the financial condition and results of operations of ForceField Energy Inc

Date:     August 19, 2013

By:	/s/ David Natan	By:	/s/ Jason Williams
Name:	David Natan	Name:	Jason Williams
Title:	Chief Executive Officer	Title:	Chief Financial Officer

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12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

6 Months Ended

Jun. 30, 2013

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

12.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Accounts payable	$	2,914,290	$	3,689,065
Accrued liabilities:
Billings in excess of cost and earned income		172,200		257,500
Reserve for estimated losses on uncompleted contracts		29,524		121,442
Other accrued liabilities		93,237		300,079
Total accrued liabilities		294,961		679,021
Total accounts payable and accrued liabilities	$	3,209,251	$	4,368,086

Accounts payable and accrued liabilities primarily represent trade payables of the Company’s Chinese operating subsidiaries.

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14. RELATED PARTY PAYABLES (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Related Party Payables Details
Advances from minority shareholder of noncontrolling interest (Wendeng)	$ 5,576,673	$ 5,488,840
Purchase consideration due minority shareholder of noncontrolling interest (Baokai)	88,647	163,647
Total	$ 5,665,320	$ 5,652,487

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Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Sales	$ 217,484	$ 526,590	$ 502,629	$ 1,034,217
Cost of goods sold	221,458	513,219	497,325	988,544
Gross margin	(3,974)	13,371	5,304	45,673
Operating expenses:
Professional fees	192,393	148,014	381,969	289,724
General and administrative	771,159	823,282	1,417,100	1,428,401
Total operating expenses	963,552	971,296	1,799,069	1,718,125
Income (loss) from operations	(967,526)	(957,925)	(1,793,765)	(1,672,452)
Other income (expense)
Equity earnings (loss) from investment in TransPacfic Energy, Inc.	0	(1,211)	0	(1,211)
Interest expense, net	(5,175)	(2,518)	(9,593)	(4,768)
Total other income (expense)	(5,175)	(3,729)	(9,593)	(5,979)
Income (loss) before income taxes	(972,701)	(961,654)	(1,803,358)	(1,678,431)
Provision for income taxes (benefit)	(125,731)	(167,342)	(191,824)	(281,518)
Net income (loss)	(846,970)	(794,312)	(1,611,534)	(1,396,913)
Less: Loss attributable to noncontrolling interests	(149,266)	(178,244)	(266,129)	(316,312)
Loss attributable to ForceField Energy Inc. common shareholders	(697,704)	(616,068)	(1,345,405)	(1,080,601)
Basic and diluted earnings (loss) per share	$ (0.04)	$ (0.04)	$ (0.08)	$ (0.07)
Weighted-average number of common shares outstanding:
Basic and diluted	16,187,281	15,057,587	16,159,934	15,033,951
Comprehensive income (loss):
Net income (loss)	(846,970)	(794,312)	(1,611,534)	(1,396,913)
Foreign currency translation adjustment	68,505	(59,310)	82,191	(50,547)
Comprehensive loss	(778,464)	(853,622)	(1,529,342)	(1,447,460)
Comprehensive loss attributable to noncontrolling interests	(149,266)	(178,244)	(266,129)	(316,312)
Comprehensive loss attributable to ForceField Energy Inc.	$ (629,198)	$ (675,378)	$ (1,263,213)	$ (1,131,148)

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5. INVENTORY

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

INVENTORY

5. INVENTORY

Inventory at June 30, 2013 and December 31, 2012 was comprised of the following:

	June 30, 2013		December 31, 2012
Raw materials	$	173,071	$	170,417
Finished goods		—		163,520
Allowance for excess or obsolete inventory		—		(10,796	)
Total	$	173,071	$	323,141

At December 31, 2012, the Company established a general provision of $10,796 to an allowance for excess or obsolete inventory by recording a charge to cost of goods sold. During the six months ended June 30, 2013, the Company reduced its allowance for excess or obsolete inventory to zero following the sale of the inventory against which it recorded the provision.

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19. SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

SEGMENT INFORMATION

19.  SEGMENT INFORMATION

As a result of the acquisition of its equity interest in TPE and exclusive distribution rights for Lightsky LED lighting products, the Company reassessed its requirement for segment reporting based on the operating and reporting structure of the combined company.

The Company utilized several criteria, including (i) the Company’s organizational structure, (ii) the manner in which the Company’s operations are managed, (iii) the criteria used by the Company’s Chief Executive Officer, the Chief Operating Decision Maker (“CODM”), to evaluate segment performance and (iv) the availability of separate financial information, as a basis to identify its operating segments.

The Company determined that it has four reportable business segments: Baokai, Wendeng, ORC and LED. The Baokai segment consists of the business of Zibo Baokai Commerce and Trade Co., Ltd., a company based in the Shandong province of China that distributes the trichlorosilane production of Zibo Baoyun Chemical Plant. The Wendeng segment consists of the operations of Wendeng He Xie Silicon Industry Co., Ltd., a company based in the Shandong province of China that directly manufactures and sells trichlorosilane. The ORC segment consists of the operations of TransPacific Energy, Inc., a company based in California and Nevada that designs and installs proprietary modular Organic Rankine Cycle units utilizing patented multiple refrigerant mixtures to maximize heat recovery and convert waste heat directly from industrial processes, solar and geothermal, biomass converting it into electrical energy. The LED segment consists of the business of ForceField USA that distributes LED lighting products manufactured in China by Shanghai Lightsky Optoelectronics Technology Co., Ltd. in the major North American markets.

The accounting policies of the reportable segments are the same as those described in Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements. The Company’s CODM reviews financial information presented on a consolidated basis, accompanied by disaggregated information by segment for purpose of evaluating financial performance.

Segment Results

The following table sets forth operations by segment for the three months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	16,944		$	139,495		$	6,535		$	54,510		$	—		$	217,484
2012	$	527,052		$	(462	)	$	—		$	—		$	—		$	526,590
Cost of goods sold:
2013	$	16,605		$	183,408		$	(5,915	)	$	27,360		$	—		$	221,458
2012	$	516,511		$	(3,292	)	$	—		$	—		$	—		$	513,219
Gross margin:
2013	$	339		$	(43,913	)	$	12,450		$	27,150		$	—		$	(3,974	)
2012	$	10,451		$	2,830		$	—		$	—		$	—		$	13,371
Operating expenses:
2013	$	64,092		$	395,259		$	25,678		$	89,572		$	388,951		$	963,552
2012	$	110,836		$	571,903		$	—		$	—		$	288,557		$	971,296
Other income (expense):
2013	$	—		$	—		$	59		$	—		$	(5,234	)	$	(5,175	)
2012	$	—		$	—		$	—		$	—		$	(3,729	)	$	(3,729	)
Provision for income taxes:
2013	$	(15,938	)	$	(109,793	)	$	—		$	—		$	—		$	(125,731	)
2012	$	(25,074	)	$	(142,268	)	$	—		$	—		$	—		$	(167,342	)
Net income (loss):
2013	$	(47,815	)	$	(329,379	)	$	(13,169	)	$	(62,422	)	$	(394,185	)	$	(846,970	)
2012	$	(75,221	)	$	(426,805	)	$	—		$	—		$	(292,286	)	$	(794,312

The following table sets forth operations by segment for the six months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	53,917		$	155,713		$	214,890		$	78,109		$	—		$	502,629
2012	$	762,011		$	272,206		$	—		$	—		$	—		$	1,034,217
Cost of goods sold:
2013	$	52,839		$	203,724		$	197,140		$	43,622		$	—		$	497,325
2012	$	746,771		$	241,773		$	—		$	—		$	—		$	988,544
Gross margin:
2013	$	1,078		$	(48,011	)	$	17,750		$	34,487		$	—		$	5,304
2012	$	15,240		$	30,443		$	—		$	—		$	—		$	45,673
Operating expenses:
2013	$	(31,066	)	$	751,431		$	63,178		$	193,794		$	821,732		$	1,799,069
2012	$	110,836		$	1,060,909		$	—		$	—		$	546,380		$	1,718,125
Other income (expense):
2013	$	—		$	—		$	116		$	—		$	(9,709	)	$	(9,593	)
2012	$	—		$	—		$	—		$	—		$	(5,979	)	$	(5,979	)
Provision for income taxes:
2013	$	8,036		$	(199,860	)	$	—		$	—		$	—		$	(191,824	)
2012	$	(23,899	)	$	(257,619	)	$	—		$	—		$	—		$	(281,518	)
Net income (loss):
2013	$	24,108		$	(599,582	)	$	(45,312	)	$	(159,307	)	$	(831,441	)	$	(1,611,534	)
2012	$	(71,697	)	$	(772,857	)	$	—		$	—		$	(552,359	)	$	(1,396,913	)

Operating segments do not sell products to each other, and accordingly, there is no inter-segment revenue to be reported.

Total Assets

The following table sets forth the total assets by segment at June 30, 2013 and December 31, 2012:

	TCS
	Baokai		Wendeng		ORC		LED		Corporate		Consolidated
Total assets:
2013	$	531,576	$	13,433,493	$	3,360,260	$	732,303	$	109,568	$	18,167,200
2012	$	1,841,600	$	14,070,312	$	3,370,300	$	769,056	$	461,781	$	20,513,049

Goodwill, Intangible and Long-Lived Assets

The following table sets forth the carrying amounts of goodwill, intangible and long-lived assets by segment at June 30, 2013 and December 31, 2012:

	TCS
	Baokai		Wendeng		ORC		LED		Corporate		Consolidated
Goodwill:
2013	$	—	$	—	$	1,342,834	$	—	$	—	$	1,342,834
2012	$	—	$	—	$	1,342,834	$	—	$	—	$	1,342,834
Intangible assets:
2013	$	—	$	2,336,677	$	1,490,658	$	650,000	$	—	$	4,477,335
2012	$	—	$	2,590,983	$	1,543,425	$	728,000	$	—	$	4,862,408
Property, plant and equipment:
2013	$	—	$	7,913,460	$	—	$	—	$	—	$	7,913,460
2012	$	—	$	7,547,128	$	—	$	—	$	—	$	7,547,128

Amortization expense totaled $146,895 for Wendeng, $26,384 for ORC and $39,000 for LED for the three months ended June 30, 2013. Depreciation expense totaled $172,349 for Wendeng for the three months ended June 30, 2013.

Amortization expense totaled $292,138 for Wendeng, $52,767 for ORC and $78,000 for LED for the six months ended June 30, 2013. Depreciation expense totaled $342,761 for Wendeng for the six months ended June 30, 2013.

Capital expenditures totaled $589,404 for Wendeng during the six months ended June 30, 2013.

Except as noted above, no other reportable segment recorded depreciation or amortization expense, nor did they incur any capital expenditures during the six months ended June 30, 2013.

Customer Concentration and Credit Risk

For the three month period ended June 30, 2013, one customer accounted for 100% of Baokai's sales; four customers accounted for 100% of Wendeng’s sales, at individual concentration levels of 12%, 21%, 24% and 43%; and one customer accounted for 69% of ORC’s revenue; and three customers accounted for 100% of LED's sales, at individual concentration levels of 13%, 28% and 59%.

For the six month period ended June 30, 2013, two customers accounted for 100% of Baokai's sales, at individual concentration levels of 31% and 69%; four customers accounted for 100% of Wendeng’s sales, at individual concentration levels of 19%, 21%, 22% and 38%; two customers accounted for 98% of ORC’s revenue, at individual concentration levels of 40% and 58%; and four customers accounted for 93% of LED's sales, at individual concentration levels of 10%, 20%, 23% and 40%.

At June 30, 2013, one customer accounted for approximately 84% of Baokai’s accounts receivable. At June 30, 2013, two customers accounted for approximately 98% of Wendeng’s accounts receivable. Concentration levels for these two customers were 17% and 81% of Wendeng’s total trade receivables.

Geographic Information

All of the Company’s long-lived assets are located in China.

During the three and six months ended June 30, 2013, all of the Company’s sales for the Wendeng and Baokai segments were in China; all of the Company’s sales for the ORC segment were in the United States; and all of the Company’s sales for the LED segment were in the United States with the exception of $5,407 in sales in Costa Rica.

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17. STOCKHOLDERS' EQUITY (Details) (Warrant [Member], USD $)	6 Months Ended
	Jun. 30, 2013
Warrant [Member]
Number of Options
Number of Warrants Outstanding, Beginning	562,750
Number of Warrants Issued	135,250
Number of Warrants Exercised	0
Number of Warrants Outstanding, Ending	698,000
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, Beginning	$ 4
Weighted Average Exercise Price Issued	$ 4
Weighted Average Exercise Price Outstanding, Ending	$ 4
Weighted Average Remaining Contractual Life (in years)
Weighted Average Remaining Contractual Life (in years) Outstanding, Beginning	2 months 12 days
Weighted Average Remaining Contractual Life (in years), Warrants issued	8 months 5 days
Weighted Average Remaining Contractual Life (in years) Outstanding, Ending	3 months 14 days

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13. LOANS PAYABLE

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

13. LOANS PAYABLE

13.  LOANS PAYABLE

Loans payable at June 30, 2013 and December 31, 2012 were comprised of the following:

	June 30, 2013		December 31, 2012
Loans payable	$	17,000	$	—
Total	$	17,000	$	—

On May 1, 2012, the Company executed a letter agreement with a third party lender whereby it could borrow up to $100,000 Canadian dollars if needed. All borrowings under the agreement are unsecured, bear interest at a rate of 10% annually and mature effective December 31, 2012. In May and June 2012, the Company received proceeds aggregating $79,600 from the lender under the agreement. As of December 31, 2012, the Company had repaid all principal amounts borrowed on its letter agreement.

In May 2013, the terms of the letter agreement were extended until December 31, 2013 and the Company borrowed $17,000 on the facility.

On June 12, 2012, the Company received loan proceeds totaling $50,000 from a demand note entered into with a third party lender. All borrowings on the note are unsecured, bear interest at a rate of 12% annually and are payable on demand. On July 5, 2012, the Company repaid the principal amount totaling $50,000 on its demand note payable.

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9. GOODWILL AND INTANGIBLE ASSETS, NET (Details 1) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Intangible assets subject to amortization:
Total	$ 4,477,335	$ 4,862,408
Net Book Value
Intangible assets subject to amortization:
Customer relationships (3 Year amortization period)	387,960
Exclusive distribution rights (5 Year amortization period)	650,000
Land leasehold and use rights (50 Year amortization period)	1,948,717
Technology (15 Year amortization period)	1,490,658
Total	4,477,335
Gross Carrying Amount
Intangible assets subject to amortization:
Customer relationships (3 Year amortization period)	1,643,126	1,617,925
Exclusive distribution rights (5 Year amortization period)	780,000	780,000
Land leasehold and use rights (50 Year amortization period)	2,042,195	2,010,872
Technology (15 Year amortization period)	1,583,000	1,583,000
Total	6,048,321	5,991,797
Accumulated Amortization
Intangible assets subject to amortization:
Customer relationships (3 Year amortization period)	(1,255,166)	(966,261)
Exclusive distribution rights (5 Year amortization period)	(130,000)	(52,000)
Land leasehold and use rights (50 Year amortization period)	(93,478)	(71,553)
Technology (15 Year amortization period)	(92,342)	(39,575)
Total	(1,570,986)	(1,129,389)
Net Book Value
Intangible assets subject to amortization:
Customer relationships (3 Year amortization period)		651,664
Exclusive distribution rights (5 Year amortization period)		728,000
Land leasehold and use rights (50 Year amortization period)		1,939,319
Technology (15 Year amortization period)		1,543,425
Total		$ 4,862,408

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17. STOCKHOLDERS' EQUITY (Details 1)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Expected dividend yield	0.00%	0.00%
Expected life (in years)	1 year	1 year
Minimum [Member]
Risk-free interest rate	0.13%	0.16%
Expected volatility	111.21%	111.94%
Maximum [Member]
Risk-free interest rate	0.16%	0.21%
Expected volatility	146.37%	152.31%

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14. RELATED PARTY PAYABLES (Tables)

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

Related party payables

	June 30, 2013		December 31, 2012
Advances from minority shareholder of noncontrolling interest (Wendeng)	$	5,576,673	$	5,488,840
Purchase consideration due minority shareholder of noncontrolling interest (Baokai)		88,647		163,647
Total	$	5,665,320	$	5,652,487

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and are expressed in United States dollars. The consolidated financial statements include the accounts of the Company; its wholly-owned subsidiaries SunSi Energies Hong Kong Limited (“SunSi HK”), ForceField Energy S.A.(“S.A.”) in Costa Rica and ForceField Energy USA Inc. (“ForceField USA”); the Company’s 50.3% owned subsidiary TransPacific Energy, Inc. (“TPE”); SunSi HK's 90% owned subsidiary Zibo Baokai Commerce and Trade Co. Ltd. (“Baokai”); and SunSi HK's 60% owned subsidiary Wendeng He Xie Silicon Industry Co., Ltd. (“Wendeng”).  All intercompany accounts have been eliminated in consolidation.

Management's Representation of Interim Financial Statements

Management’s Representation of Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited financial statements at December 31, 2012 as filed in the Company’s Form 10-K filed with the Securities and Exchange Commission. 

Reverse Stock Split

Reverse Stock Split

All preferred and common share amounts (except par value and par value per share amounts) have been retroactively restated as of June 30, 2013 to reflect the Company’s one-for-two reverse capital stock split effective October 9, 2012, as described in Note 17 — Stockholders’ Equity to these consolidated financial statements.

Use of Estimates

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. The Company continually evaluates its estimates, including but not limited to those related to the valuation of accounts receivable, inventories, deferred income taxes, goodwill and intangible assets, and the estimation on the useful lives of property, plant and equipment. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Refer to Note 2 — Summary of Significant Accounting Policies in the Company’s audited 2012 consolidated financial statements in Form 10-K for a summary of its significant accounting policies.

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21. SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

21. SUBSEQUENT EVENTS

On April 25, 2013, the Company entered into a letter of intent to acquire a 60% interest in 1-800 NY Bulbs Ltd, a Mamaroneck, New York based company with over 25 years of experience and a strong reputation for providing premium lighting design, supply and logistics, and installation service options to a variety of clients and high profile enterprises.

On July 31, 2013, the letter of intent expired without a consensual agreement to extend the terms. At this time, the Company is no longer pursuing the acquisition of a controlling interest in 1-800 NY Bulbs Ltd.

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

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8. BUSINESS COMBINATIONS (Details) (USD $)	Jun. 30, 2013
Consideration:
Cash and cash equivalents	$ 520,000
Common stock, 255,356 shares of ForceField common stock	965,226
Investment in TransPacific Energy, Inc.:
Fair value of consideration transferred	1,485,226
Equity loss on investment in TransPacific Energy, Inc.	(5,798)
Fair value of total consideration	1,479,428
Financial assets	442,629
Identifiable intangible asset - technology	1,583,000
Financial liabilities	(452,026)
Deferred tax liability	(645,009)
Total identifiable net assets	928,594
Noncontrolling interest	(792,000)
Goodwill	1,342,834
Recognized amount of identifiable assets acquired and liabilities assumed, Total	$ 1,479,428

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10. RELATED PARTY RECEIVABLES - TRADE (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related party receivables

	June 30, 2013		December 31, 2012
Wendeng Huahai Chemical Co., Ltd.	$	224,118	$	413,061
Total	$	224,118	$	413,061

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17. STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Outstanding and exercisable warrants

	Number of Warrants Outstanding		Weighted Average Exercise Price		Remaining Contractual Life (Years)
Balance, December 31, 2012		562,750	$	4.00	$	0.20
Warrants issued		135,250	$	4.00		0.68
Warrants exercised		—		—		—
Balance June 30, 2013		698,000	$	4.00		0.29

Value of the common stock options and warrants

	June 30, 2013			December 31, 2012
Expected dividend yield (1)		0.00	%		0.00	%
Risk-free interest rate (2)		0.13 – 0.16	%		0.16 – 0.21	%
Expected volatility (3)		111.21 – 146.37	%		111.94 – 152.31	%
Expected life (in years)		1.00			1.00

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10. RELATED PARTY RECEIVABLES - TRADE (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total	$ 224,118	$ 413,061
Wendeng Huahai Chemical Co., Ltd.
Total	$ 224,118	$ 413,061

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7. PROPERTY, PLANT AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, plant and equipment

						June 30, 2013							December 31, 2012
			Accumulated			Net book				Accumulated			Net book
	Cost		Depreciation			Value		Cost		Depreciation			Value
Building	$	3,842,546	$	(442,065	)	$	3,400,481	$	3,783,611	$	(340,062	)	$	3,443,549
Furniture and equipment		9,985		(3,917	)		6,068		9,831		(2,831	)		7,000
Machinery and equipment		3,975,412		(954,706	)		3,020,706		3,914,440		(733,413	)		3,181,027
Automotive equipment		329,943		(137,617	)		192,326		324,883		(99,292	)		225,591
Office equipment		12,639		(5,312	)		7,327		12,445		(3,921	)		8,524
Construction in Progress		1,286,552		—			1,286,552		681,437		—			681,437
Total	$	9,457,077	$	(1,543,617	)	$	7,913,460	$	8,726,647	$	(1,179,519	)	$	7,547,128

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5. INVENTORY (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Inventory Details
Raw materials	$ 173,071	$ 170,417
Finished goods	0	163,520
Allowance for excess or obsolete inventory	0	(10,796)
Total	$ 173,071	$ 323,141

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20. DEFINED CONTRIBUTION PLAN

6 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

DEFINED CONTRIBUTION PLAN

20. DEFINED CONTRIBUTION PLAN

Pursuant to the relevant Chinese regulations, the Company is required to make contributions at a rate of 28% of employees’ salaries and wages to a defined contribution retirement plan organized by a state-sponsored social insurance plan in respect of the retirement benefits for the Company’s employees in the China. The only obligation of the Company with respect to the retirement plan is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the statements of operations. The Company contributed $10,178 and $17,055 for the three and six month period ended June 30, 2013, respectively, compared to $3,634 and $11,710 for the same three and six month periods ended June 30, 2012, respectively.

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1. NATURE OF OPERATIONS

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS

1. NATURE OF OPERATIONS

ForceField Energy Inc. (“ForceField” or “Company”) is an international manufacturer, distributor, and licensee of alternative energy products and technologies. ForceField was incorporated in the State of Nevada on January 30, 2007. ForceField (i) owns 50.3% of TransPacific Energy, Inc. (“TPE”), a U.S. based renewable energy technology provider that uses “waste heat” from various manufacturing and other sources to provide clean electricity; (ii) is the exclusive North American distributor of light emitting diode (LED) commercial lighting products and fixtures for a premier manufacturer in China; and (iii) is a producer of trichlorosilane (“TCS”) in China. TCS is 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. This TCS is sold to the marketplace via two operating segments, (1) a 90% owned TCS distribution company, and (2) through the 60% ownership of a TCS plant, both of which are located in China.

On February 28, 2013, the Company changed its name from SunSi Energies Inc. (“SunSi”) to ForceField Energy Inc. With the exception of the Company’s wholly-owned subsidiary, SunSi Energies Hong Kong Ltd. (“SunSi HK”) which name remains unchanged, all historic references to “SunSi” in this document have been changed to “ForceField”.

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3. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

6 Months Ended

Jun. 30, 2013

Accounting Changes and Error Corrections [Abstract]

THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

3. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

Accounting Standards Updates through ASU 2013-11 that contain technical corrections to existing guidance or affect 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.

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6. PREPAID EXPENSES AND OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2013

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

6.  PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets at June 30, 2013 and December 31, 2012 were comprised of the following:

	June 30, 2013		December 31, 2012
Advances to suppliers, net of allowance	$	495,002	$	300,396
Prepaid expenses		137,213		94,682
Value added tax (VAT) credit		53,477		52,656
Other		1,268		867
Total	$	686,960	$	448,601

Advances made to suppliers are for the purchase of raw materials that are expected to be recovered within twelve months. At December 31, 2012, the Company established a general provision for doubtful accounts related to its advances to suppliers by recording a charge to bad debt expense of $9,314. During the six months ended June 30, 2013, the Company did not record any further adjustments to the provision.

Prepaid expenses and other assets represent prepayments made in the normal course and in which the economic benefit is expected to be realized within twelve months.

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4. ACCOUNTS RECEIVABLE, NET

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

ACCOUNTS RECEIVABLE, NET

4. ACCOUNTS RECEIVABLE, NET

Accounts receivable at June 30, 2013 and December 31, 2012 were comprised of the following:

	June 30, 2013			December 31, 2012
Accounts receivable, trade	$	2,936,828		$	4,645,193
Accounts receivable, unbilled		112,058			26,167
Costs and unearned income unbilled		200,000			257,500
Allowance for doubtful accounts		(351,510	)		(459,346	)
Total	$	2,897,376		$	4,469,514

In March 2013, the Company’s Baokai segment agreed to assign the accounts receivable balance from one of its customers, totaling $1,334,321, to the manufacturer of the product it distributes, Zibo Baoyun Chemical Plant (“ZBCP”). In exchange, the Company is relieved of its accounts payable obligations to ZBCP. Additionally, ZBCP agreed to pay the 2% gross margin earned by the Company related to these accounts receivables from the sale of its product by June 30, 2013. This amount has not yet been collected.

At December 31, 2012, the Company established a general provision related to its trade accounts receivable of $459,346 to an allowance for doubtful accounts by recording a charge to bad debt expense. During the six months ended June 30, 2013, the Company decreased its provision by recording a benefit to bad debt expense of $62,152 due to the settlement of accounts receivable balances previously reserved against. Furthermore, the Company’s ORC segment wrote off accounts receivables totaling $51,500 that it previously reserved against.

As of June 30, 2013, three customers accounted for approximately 13%, 17%, and 63% respectively, or approximately 93% of total accounts receivable.

As of December 31, 2012, three customers accounted for approximately 11%, 22% and 65%, respectively, or approximately 98% of total accounts receivable.

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19. SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Results

The following table sets forth operations by segment for the three months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	16,944		$	139,495		$	6,535		$	54,510		$	—		$	217,484
2012	$	527,052		$	(462	)	$	—		$	—		$	—		$	526,590
Cost of goods sold:
2013	$	16,605		$	183,408		$	(5,915	)	$	27,360		$	—		$	221,458
2012	$	516,511		$	(3,292	)	$	—		$	—		$	—		$	513,219
Gross margin:
2013	$	339		$	(43,913	)	$	12,450		$	27,150		$	—		$	(3,974	)
2012	$	10,451		$	2,830		$	—		$	—		$	—		$	13,371
Operating expenses:
2013	$	64,092		$	395,259		$	25,678		$	89,572		$	388,951		$	963,552
2012	$	110,836		$	571,903		$	—		$	—		$	288,557		$	971,296
Other income (expense):
2013	$	—		$	—		$	59		$	—		$	(5,234	)	$	(5,175	)
2012	$	—		$	—		$	—		$	—		$	(3,729	)	$	(3,729	)
Provision for income taxes:
2013	$	(15,938	)	$	(109,793	)	$	—		$	—		$	—		$	(125,731	)
2012	$	(25,074	)	$	(142,268	)	$	—		$	—		$	—		$	(167,342	)
Net income (loss):
2013	$	(47,815	)	$	(329,379	)	$	(13,169	)	$	(62,422	)	$	(394,185	)	$	(846,970	)
2012	$	(75,221	)	$	(426,805	)	$	—		$	—		$	(292,286	)	$	(794,312

The following table sets forth operations by segment for the six months ended June 30, 2013 and 2012:

	TCS
	Baokai			Wendeng			ORC			LED			Corporate			Consolidated
Sales:
2013	$	53,917		$	155,713		$	214,890		$	78,109		$	—		$	502,629
2012	$	762,011		$	272,206		$	—		$	—		$	—		$	1,034,217
Cost of goods sold:
2013	$	52,839		$	203,724		$	197,140		$	43,622		$	—		$	497,325
2012	$	746,771		$	241,773		$	—		$	—		$	—		$	988,544
Gross margin:
2013	$	1,078		$	(48,011	)	$	17,750		$	34,487		$	—		$	5,304
2012	$	15,240		$	30,443		$	—		$	—		$	—		$	45,673
Operating expenses:
2013	$	(31,066	)	$	751,431		$	63,178		$	193,794		$	821,732		$	1,799,069
2012	$	110,836		$	1,060,909		$	—		$	—		$	546,380		$	1,718,125
Other income (expense):
2013	$	—		$	—		$	116		$	—		$	(9,709	)	$	(9,593	)
2012	$	—		$	—		$	—		$	—		$	(5,979	)	$	(5,979	)
Provision for income taxes:
2013	$	8,036		$	(199,860	)	$	—		$	—		$	—		$	(191,824	)
2012	$	(23,899	)	$	(257,619	)	$	—		$	—		$	—		$	(281,518	)
Net income (loss):
2013	$	24,108		$	(599,582	)	$	(45,312	)	$	(159,307	)	$	(831,441	)	$	(1,611,534	)
2012	$	(71,697	)	$	(772,857	)	$	—		$	—		$	(552,359	)	$	(1,396,913	)

Total Assets by segment

	TCS
	Baokai		Wendeng		ORC		LED		Corporate		Consolidated
Total assets:
2013	$	531,576	$	13,433,493	$	3,360,260	$	732,303	$	109,568	$	18,167,200
2012	$	1,841,600	$	14,070,312	$	3,370,300	$	769,056	$	461,781	$	20,513,049

Goodwill, Intangible and Long-Lived Assets

	TCS
	Baokai		Wendeng		ORC		LED		Corporate		Consolidated
Goodwill:
2013	$	—	$	—	$	1,342,834	$	—	$	—	$	1,342,834
2012	$	—	$	—	$	1,342,834	$	—	$	—	$	1,342,834
Intangible assets:
2013	$	—	$	2,336,677	$	1,490,658	$	650,000	$	—	$	4,477,335
2012	$	—	$	2,590,983	$	1,543,425	$	728,000	$	—	$	4,862,408
Property, plant and equipment:
2013	$	—	$	7,913,460	$	—	$	—	$	—	$	7,913,460
2012	$	—	$	7,547,128	$	—	$	—	$	—	$

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4. ACCOUNTS RECEIVABLE, NET (Tables)

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

Accounts receivable

	June 30, 2013			December 31, 2012
Accounts receivable, trade	$	2,936,828		$	4,645,193
Accounts receivable, unbilled		112,058			26,167
Costs and unearned income unbilled		200,000			257,500
Allowance for doubtful accounts		(351,510	)		(459,346	)
Total	$	2,897,376		$	4,469,514

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8. BUSINESS COMBINATIONS (Tables)

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Fair Value of Consideration Transferred and Recording of Assets Acquired, Liabilities Assumed and Noncontrolling Interests

Consideration:
Cash and cash equivalents	$	520,000
Common stock, 255,356 shares of ForceField common stock (1)		965,226
Fair value of total consideration transferred	$	1,485,226
Equity loss on investment in TransPacific Energy, Inc.		(5,798	)
Fair value of total consideration	$	1,479,428
Recognized amount of identifiable assets acquired and liabilities assumed:
Financial assets	$	442,629
Identifiable intangible asset – technology		1,583,000
Financial liabilities		(452,026	)
Deferred tax liability		(645,009	)
Total identifiable net assets		928,594
Noncontrolling interest		(792,000	)
Goodwill		1,342,834
	$	1,479,428

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13. LOANS PAYABLE (Tables)

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

Loans Payable

	June 30, 2013		December 31, 2012
Loans payable	$	17,000	$	—
Total	$	17,000	$	—

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16. DEBT (Details 1) (USD $)	6 Months Ended
	Jun. 30, 2013
ConvertibleDebtMember
Issue Date	Oct. 15, 2011
Interest Rate	9.00%
Face Value	$ 100,000
Maturity Date	Oct. 15, 2014
Conversion Rate of Face Value to Common Shares	$ 0.125
Convertible Debt B
Issue Date	Nov. 16, 2012
Interest Rate	9.00%
Face Value	50,000
Maturity Date	Nov. 16, 2015
Conversion Rate of Face Value to Common Shares	$ 0.2
Convertible Debt C
Issue Date	Feb. 13, 2013
Interest Rate	9.00%
Face Value	$ 50,000
Maturity Date	Feb. 13, 2016
Conversion Rate of Face Value to Common Shares	$ 0.2

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11. OTHER ASSETS (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total	$ 0	$ 21,956
Department of Extra budgetary Fund, Wendeng
Total	$ 0	$ 21,956

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7. PROPERTY, PLANT AND EQUIPMENT (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total	$ 7,913,460	$ 7,547,128
Cost
Building	3,842,546	3,783,611
Furniture and equipment	9,985	9,831
Machinery and equipment	3,975,412	3,914,440
Automotive equipment	329,943	324,883
Office equipment	12,639	12,445
Construction in Progress	1,286,552	681,437
Total	9,457,077	8,726,647
Accumulated Depreciation
Building	(442,065)	(340,062)
Furniture and equipment	(3,917)	(2,831)
Machinery and equipment	(954,706)	(733,413)
Automotive equipment	(137,617)	(99,292)
Office equipment	(5,312)	(3,921)
Construction in Progress	0	0
Total	(1,543,617)	(1,179,519)
Net Book Value
Building	3,400,481	3,443,549
Furniture and equipment	6,068	7,000
Machinery and equipment	3,020,706	3,181,027
Automotive equipment	192,326	225,591
Office equipment	7,327	8,524
Construction in Progress	1,286,552	681,437
Total	$ 7,913,460	$ 7,547,128

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Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Equity:
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized shares	12,500,000	12,500,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	37,500,000	37,500,000
Common stock, issued shares	16,221,112	16,080,815
Common stock, outstanding shares	16,221,112	16,080,815

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9. GOODWILL AND INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

9.  GOODWILL AND  INTANGIBLE ASSETS, NET

The carrying amount of goodwill at June 30, 2013 and December 31, 2012 was comprised of the following:

	June 30, 2013		December 31, 2012
Goodwill – Wendeng He Xie Silicon Co., Ltd		—		583,183
Goodwill – TransPacific Energy, Inc.		1,342,834		1,342,834
Impairment charge		—		(607,422	)
Foreign currency translation adjustments		—		24,239
Goodwill, net at June 30, 2013	$	1,342,834	$	1,342,834

Intangible assets at June 30, 2013 and December 31, 2012 were comprised of the following:

		June 30, 2013							December 31, 2012
	Amortization	Gross					Net		Gross					Net
	Period	Carrying		Accumulated			Book		Carrying		Accumulated			Book
	(Years)	Amount		Amortization			Value		Amount		Amortization			Value
Intangible assets subject to amortization:
Customer relationships	3	$	1,643,126		(1,255,166	)		387,960	$	1,617,925	$	(966,261	)	$	651,664
Exclusive distribution rights	5		780,000		(130,000	)		650,000		780,000		(52,000	)		728,000
Land leasehold and use rights	50		2,042,195		(93,478	)		1,948,717		2,010,872		(71,553	)		1,939,319
Technology	15		1,583,000		(92,342	)		1,490,658		1,583,000		(39,575	)		1,543,425
Total		$	6,048,321		(1,570,986	)		4,477,335	$	5,991,797	$	(1,129,389	)	$	4,862,408

On August 27, 2012, the Company entered into a five year distribution agreement with Shanghai Lightsky Optoelectronics Technology Co., Ltd. (“Lightsky”) located in Shanghai, China whereby ForceField became the exclusive distributor of Lightsky LED lighting products in the United States, Canada and Mexico. Lightsky is an established manufacturer and seller of numerous patented LED lighting products in China and throughout Asia. ForceField issued 150,000 shares of its restricted common stock valued at $780,000, which represents the trading price of $5.20 per share of the Company’s common stock on the date of the transaction, as consideration for the rights. This amount will be amortized using the straight-line method over the five year expected life of the distribution rights. The shares are restricted for an eighteen-month period from their date of issuance. In order to maintain its exclusivity and qualify for any automatic renewal periods beyond the five-year period, ForceField must achieve certain performance milestones.

Amortization expense for intangible assets subject to amortization for the three months ended June 30, 2013 and 2012 totaled $212,279 and $142,747, respectively.

Amortization expense for intangible assets subject to amortization for the six months ended June 30, 2013 and 2012 totaled $422,905 and $289,330, respectively.

Differences may arise in the amount of amortization expense reported in the Company's operating results as compared to the corresponding change in accumulated depreciation due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity.

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income (loss)	$ (1,611,534)	$ (1,396,913)
Depreciation and amortization	765,666	619,247
Provision for doubtful accounts	(62,152)	389,874
Equity (earnings) loss from investment in TransPacific Energy, Inc.	0	1,211
Common stock issued in exchange for services	92,822	24,000
Changes in operating assets and liabililites:
Accounts receivable	342,722	(493,392)
Notes receivable	0	477,769
Inventory	153,773	114,874
Prepaid expenses and other current assets	(286,039)	92,346
Related party receivables - trade	193,702	(112,110)
Other assets	22,106	0
Accounts payable	523,375	154,333
Accrued liabilities	(331,136)	149,459
Income taxes payable	(268,314)	(359,663)
Net cash used in operating activities	(465,009)	(338,965)
Cash flows from investing activities:
Cash consideration for acquisition of business	0	(150,000)
Purchase of property, plant and equipment	(589,404)	(190,017)
Net cash provided by (used in) investing activities	(589,404)	(340,017)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs	441,900	195,000
Proceeds from issuance of convertible debentures	50,000	0
Proceeds from loans payable	17,000	129,600
Proceeds from (repayments of) related party payables	(75,000)	40,000
Net cash provided by financing activities	433,900	364,600
Effect of exchange rates on cash and cash equivalents	3,484	(3,880)
Net increase (decrease) in cash and cash equivalents	(617,029)	(318,262)
Cash and cash equivalents at beginning of period	994,149	674,291
Cash and cash equivalents at end of period	377,120	356,029
Supplemental disclosure of cash flow information:
Cash paid for interest	7,906	4,768
Cash paid for income taxes	800	0
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock related to acquisitions	0	475,207
Common stock issued to reduce accounts payable	$ 0	$ 40,000

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19. SEGMENT INFORMATION (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Sales	$ 217,484	$ 526,590	$ 502,629	$ 1,034,217
Cost of goods sold	221,458	513,219	497,325	988,544
Gross margin	(3,974)	13,371	5,304	45,673
Operating expenses	963,552	971,296	1,799,069	1,718,125
Other income (expense)	(5,175)	(3,729)	(9,593)	(5,979)
Provision for income taxes	(125,731)	(167,342)	(191,824)	(281,518)
Net income (loss)	(846,970)	(794,312)	(1,611,534)	(1,396,913)
Baokai [Member]
Sales	16,944	527,052	53,917	762,011
Cost of goods sold	16,605	516,511	52,839	746,771
Gross margin	339	10,451	1,078	15,240
Operating expenses	64,092	110,836	(31,066)	110,836
Other income (expense)	0	0	0	0
Provision for income taxes	(15,938)	(25,074)	8,036	(23,899)
Net income (loss)	(47,815)	(75,221)	24,108	(71,697)
Wendeng [Member]
Sales	139,495	(462)	155,713	272,206
Cost of goods sold	183,408	(3,292)	203,724	241,773
Gross margin	(43,913)	2,830	(48,011)	30,443
Operating expenses	395,259	571,903	751,431	1,060,909
Other income (expense)	0	0	0	0
Provision for income taxes	(109,793)	(142,268)	(199,860)	(257,619)
Net income (loss)	(329,379)	(426,805)	(599,582)	(772,857)
ORC [Member]
Sales	6,535	0	214,890	0
Cost of goods sold	(5,915)	0	197,140	0
Gross margin	12,450	0	17,750	0
Operating expenses	25,678	0	63,178	0
Other income (expense)	59	0	116	0
Provision for income taxes	0	0	0	0
Net income (loss)	(13,169)	0	(45,312)	0
LED [Member]
Sales	54,510	0	78,109	0
Cost of goods sold	27,360	0	43,622	0
Gross margin	27,150	0	34,487	0
Operating expenses	89,572	0	193,794	0
Other income (expense)	0	0	0	0
Provision for income taxes	0	0	0	0
Net income (loss)	(62,422)	0	(159,307)	0
Corporate [Member]
Sales	0	0	0	0
Cost of goods sold	0	0	0	0
Gross margin	0	0	0	0
Operating expenses	388,951	288,557	821,732	546,380
Other income (expense)	(5,234)	(3,729)	(9,709)	(5,979)
Provision for income taxes	0	0	0	0
Net income (loss)	$ (394,185)	$ (292,286)	$ (831,441)	$ (552,359)

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Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 377,120	$ 994,149
Accounts receivable, net	2,897,376	4,469,514
Inventory, net	173,071	323,141
Deferred tax assets, net	74,926	90,257
Prepaid expenses and other current assets	686,960	448,601
Total current assets	4,209,453	6,325,662
Property, plant and equipment	7,913,460	7,547,128
Goodwill	1,342,834	1,342,834
Intangible assets, net	4,477,335	4,862,408
Related party receivables	224,118	413,061
Other assets	0	21,956
Total assets	18,167,200	20,513,049
LIABILITIES AND EQUITY
Accounts payable	2,914,290	3,689,065
Accrued liabilities	294,961	679,021
Loans payable	17,000	0
Related party payables	5,665,320	5,652,487
Income taxes payable	1,152,730	1,239,067
Total current liabilities	10,044,301	11,259,640
Convertible debenture	200,000	150,000
Deferred tax liabilities, net - non-current	223,147	409,037
Total liabilities	10,467,448	11,818,677
Commitments and contingencies
Equity:
Preferred stock, $0.001 par value. 12,500,000 shares authorized; zero shares issued and outstanding	0	0
Common stock, $0.001 par value. 37,500,000 shares authorized; and 16,221,112 and 16,080,815 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively	16,221	16,081
Additional paid-in capital	13,549,804	13,015,222
Accumulated deficit	(8,267,603)	(6,922,198)
Accumulated other comprehensive income	399,529	317,337
Total ForceField Energy Inc. stockholders' equity	5,697,951	6,426,442
Noncontrolling interests	2,001,801	2,267,930
Total equity	7,699,752	8,694,372
Total liabilities and equity	$ 18,167,200	$ 20,513,049

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12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Accounts Payable And Accrued Liabilities Details
Accounts payable	$ 2,914,290	$ 3,689,065
Accrued liabilities:
Billings in excess of cost and earned income	172,200	257,500
Reserve for estimated losses on uncompleted contracts	29,524	121,442
Other accrued liabilities	93,237	300,079
Accrued liabilities	294,961	679,021
Total	$ 3,209,251	$ 4,368,086

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5. INVENTORY (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventory

	June 30, 2013		December 31, 2012
Raw materials	$	173,071	$	170,417
Finished goods		—		163,520
Allowance for excess or obsolete inventory		—		(10,796	)
Total	$	173,071	$	323,141

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18. COMMITMENTS

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

18. COMMITMENTS

ForceField has entered into a number of engagement agreements for advisory and consulting services on a non-exclusive basis to obtain new equity capital and debt financing. In the event that the Company receives new capital proceeds from a source identified 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 terms and condition of financing are subject to Company approval.

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6. PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Prepaid Expenses And Other Current Assets Details
Advances to suppliers, net of allowance	$ 495,002	$ 300,396
Prepaid expenses	137,213	94,682
Value added tax (VAT) credit	53,477	52,656
Other	1,268	867
Total	$ 686,960	$ 448,601

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16. DEBT (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Debt Details
9% Unsecured, convertible debenture	$ 200,000	$ 150,000
Total debt	200,000	150,000
Less: Current portion	0	0
Long term debt	$ 200,000	$ 150,000

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16. DEBT (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt

	June 30, 2013		December 31, 2012
9% Unsecured, convertible debentures	$	200,000	$	150,000
Less: Current portion		—		—
Long term debt	$	200,000	$	150,000

Convertible debentures

Issue Date	Interest Rate	Face Value		Maturity Date	Conversion Rate of Face Value to Common Shares
10/15/2011	9%	$	100,000	10/15/2014	0.125
11/16/2012	9%		50,000	11/16/2015	0.200
02/13/2013	9%		50,000	02/13/2016	0.200
Total		$	200,000

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11. OTHER ASSETS (Tables)

6 Months Ended

Jun. 30, 2013

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other assets

	June 30, 2013		December 31, 2012
Deposit – Department of Extra budgetary Fund, Wendeng	$	—	$	21,956
Total	$	—	$	21,956

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12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2013

Payables and Accruals [Abstract]

Accounts payable and accrued liabilities

	June 30, 2013		December 31, 2012
Accounts payable	$	2,914,290	$	3,689,065
Accrued liabilities:
Billings in excess of cost and earned income		172,200		257,500
Reserve for estimated losses on uncompleted contracts		29,524		121,442
Other accrued liabilities		93,237		300,079
Total accrued liabilities		294,961		679,021
Total accounts payable and accrued liabilities	$	3,209,251	$	4,368,086

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8. BUSINESS COMBINATIONS

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

BUSINESS COMBINATIONS

8.  BUSINESS COMBINATIONS

On May 10 and May 17, 2012, the Company entered into two share exchange agreements (the “Agreements”) with shareholders of TPE to acquire an aggregate controlling equity interest of its common stock. TPE is a renewable energy technology corporation located in California and Nevada that designs and installs proprietary modular Organic Rankine Cycle (“ORC”) units utilizing up to nine patented refrigerant mixtures to maximize heat recovery and convert waste heat directly from any process that generates waste heat or flue gas (such as industrial, solar, geothermal and biomass processes) converting it into electrical energy.

From June 14, 2012 through August 20, 2012, the Company paid $520,000 in cash and issued 255,356 shares of its common stock, valued at approximately $965,226 or $3.78 per share, in exchange for 24,753,768 shares of TPE’s common stock in accordance with the terms of the Agreements. These investments represent approximately a 50.3% equity interest in the common stock of TPE.

The acquisition was accounted for as a business combination under the acquisition method of accounting in accordance with generally accepted accounting principles.

Prior to gaining its controlling interest, the Company accounted for its investment in TPE as prescribed in ASC 323, “Investment — Equity Method and Joint Venture”. Accordingly, the Company adjusted the carrying amount of its investment to recognize its share of earnings or losses. During the six months ended June 30, 2013, the Company recorded an equity loss from its investment in TPE of $5,798.

Fair Value of Consideration Transferred and Recording of Assets Acquired, Liabilities Assumed and Non-controlling Interests

The following table summarizes the acquisition date fair value of the consideration transferred, identifiable assets acquired, liabilities assumed and non-controlling interests including an amount for goodwill:

Consideration:
Cash and cash equivalents	$	520,000
Common stock, 255,356 shares of ForceField common stock (1)		965,226
Fair value of total consideration transferred	$	1,485,226
Equity loss on investment in TransPacific Energy, Inc.		(5,798	)
Fair value of total consideration	$	1,479,428
Recognized amount of identifiable assets acquired and liabilities assumed:
Financial assets	$	442,629
Identifiable intangible asset – technology		1,583,000
Financial liabilities		(452,026	)
Deferred tax liability		(645,009	)
Total identifiable net assets		928,594
Noncontrolling interest		(792,000	)
Goodwill		1,342,834
	$	1,479,428

(1) The $3.78 per share price was determined by calculating the 30-day weighted average trading price of the Company’s common stock immediately preceding the initial June 14, 2012 funding of the transaction.

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6. PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

6 Months Ended

Jun. 30, 2013

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid expenses and other current assets

	June 30, 2013		December 31, 2012
Advances to suppliers, net of allowance	$	495,002	$	300,396
Prepaid expenses		137,213		94,682
Value added tax (VAT) credit		53,477		52,656
Other		1,268		867
Total	$	686,960	$	448,601

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4. ACCOUNTS RECEIVABLE, NET (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Accounts Receivable Net Details
Accounts receivable, trade	$ 2,936,828	$ 4,645,193
Accounts receivable, unbilled	112,058	26,167
Costs and unearned income, unbilled	200,000	257,500
Allowance for doubtful accounts	(351,510)	(459,346)
Net Receivables	$ 2,897,376	$ 4,469,514

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11. OTHER ASSETS

6 Months Ended

Jun. 30, 2013

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

OTHER ASSETS

11.  OTHER ASSETS

Other assets were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Deposit – Department of Extra budgetary Fund, Wendeng	$	—	$	21,956
Total	$	—	$	21,956

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7. PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

7.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2013 and December 31, 2012 was comprised of the following:

						June 30, 2013							December 31, 2012
			Accumulated			Net book				Accumulated			Net book
	Cost		Depreciation			Value		Cost		Depreciation			Value
Building	$	3,842,546	$	(442,065	)	$	3,400,481	$	3,783,611	$	(340,062	)	$	3,443,549
Furniture and equipment		9,985		(3,917	)		6,068		9,831		(2,831	)		7,000
Machinery and equipment		3,975,412		(954,706	)		3,020,706		3,914,440		(733,413	)		3,181,027
Automotive equipment		329,943		(137,617	)		192,326		324,883		(99,292	)		225,591
Office equipment		12,639		(5,312	)		7,327		12,445		(3,921	)		8,524
Construction in Progress		1,286,552		—			1,286,552		681,437		—			681,437
Total	$	9,457,077	$	(1,543,617	)	$	7,913,460	$	8,726,647	$	(1,179,519	)	$	7,547,128

Depreciation for the three months ended June 30, 2013 and June 30, 2012 totaled $172,349 and $167,498, respectively.

Depreciation expense for the six months ended June 30, 2013 and 2012 totaled $342,761 and $329,917, respectively.

Differences may arise in the amount of depreciation expense reported in the Company's operating results as compared to the corresponding change in accumulated depreciation due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF  SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and are expressed in United States dollars. The consolidated financial statements include the accounts of the Company; its wholly-owned subsidiaries SunSi Energies Hong Kong Limited (“SunSi HK”), ForceField Energy S.A.(“S.A.”) in Costa Rica and ForceField Energy USA Inc. (“ForceField USA”); the Company’s 50.3% owned subsidiary TransPacific Energy, Inc. (“TPE”); SunSi HK's 90% owned subsidiary Zibo Baokai Commerce and Trade Co. Ltd. (“Baokai”); and SunSi HK's 60% owned subsidiary Wendeng He Xie Silicon Industry Co., Ltd. (“Wendeng”).  All intercompany accounts have been eliminated in consolidation.

Management’s Representation of Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited financial statements at December 31, 2012 as filed in the Company’s Form 10-K filed with the Securities and Exchange Commission. 

Reverse Stock Split

All preferred and common share amounts (except par value and par value per share amounts) have been retroactively restated as of June 30, 2013 to reflect the Company’s one-for-two reverse capital stock split effective October 9, 2012, as described in Note 17 — Stockholders’ Equity to these consolidated financial statements.

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. The Company continually evaluates its estimates, including but not limited to those related to the valuation of accounts receivable, inventories, deferred income taxes, goodwill and intangible assets, and the estimation on the useful lives of property, plant and equipment. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Refer to Note 2 — Summary of Significant Accounting Policies in the Company’s audited 2012 consolidated financial statements in Form 10-K for a summary of its significant accounting policies.

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13. LOANS PAYABLE (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Loans Payable Details
Loans Payable	$ 17,000	$ 0

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9. GOODWILL AND INTANGIBLE ASSETS, NET (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Goodwill And Intangible Assets Net Details
Goodwill - Wendeng He Xie Silicon Co., Ltd	$ 0	$ 583,183
Goodwill – TransPacific Energy, Inc.	1,342,834	1,342,834
Impairment charge	0	(607,422)
Foreign currency translation adjustments	0	24,239
Goodwill, net	$ 1,342,834	$ 1,342,834

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9. GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying amount of goodwill

	June 30, 2013		December 31, 2012
Goodwill – Wendeng He Xie Silicon Co., Ltd		—		583,183
Goodwill – TransPacific Energy, Inc.		1,342,834		1,342,834
Impairment charge		—		(607,422	)
Foreign currency translation adjustments		—		24,239
Goodwill, net at June 30, 2013	$	1,342,834	$	1,342,834

Intangible assets

		June 30, 2013							December 31, 2012
	Amortization	Gross					Net		Gross					Net
	Period	Carrying		Accumulated			Book		Carrying		Accumulated			Book
	(Years)	Amount		Amortization			Value		Amount		Amortization			Value
Intangible assets subject to amortization:
Customer relationships	3	$	1,643,126		(1,255,166	)		387,960	$	1,617,925	$	(966,261	)	$	651,664
Exclusive distribution rights	5		780,000		(130,000	)		650,000		780,000		(52,000	)		728,000
Land leasehold and use rights	50		2,042,195		(93,478	)		1,948,717		2,010,872		(71,553	)		1,939,319
Technology	15		1,583,000		(92,342	)		1,490,658		1,583,000		(39,575	)		1,543,425
Total		$	6,048,321		(1,570,986	)		4,477,335	$	5,991,797	$	(1,129,389	)	$	4,862,408

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19. SEGMENT INFORMATION (Details 1) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total assets	$ 18,167,200	$ 20,513,049
Baokai [Member]
Total assets	531,576	1,841,600
Wendeng [Member]
Total assets	13,433,493	14,070,312
ORC [Member]
Total assets	3,360,260	3,370,300
LED [Member]
Total assets	732,303	769,056
CorporateMember
Total assets	$ 109,568	$ 461,781

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14. RELATED PARTY PAYABLES

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

RELATED PARTY PAYABLES

14.  RELATED PARTY PAYABLES    

Related party payables were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Advances from minority shareholder of noncontrolling interest (Wendeng)	$	5,576,673	$	5,488,840
Purchase consideration due minority shareholder of noncontrolling interest (Baokai)		88,647		163,647
Total	$	5,665,320	$	5,652,487

The minority shareholder of the Company’s Wendeng subsidiary made a series of advances, both pre and post-acquisition, to fund capital expenditures and plant expansion. These advances were made on an interest-free basis, are unsecured and payable on demand. Additionally, an officer of ForceField made a series of advances to fund working capital. These advances were also made on an interest-free basis, are unsecured and payable on demand.

The amount due to the minority shareholder of its Baokai subsidiary represents unpaid purchase consideration from the Company’s December 8, 2010 acquisition. This amount bears no interest, is unsecured and payable on demand.

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10. RELATED PARTY RECEIVABLES - TRADE

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY RECEIVABLES - TRADE

10.  RELATED PARTY RECEIVABLES - TRADE

Related party receivables were comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
Wendeng Huahai Chemical Co., Ltd.	$	224,118	$	413,061
Total	$	224,118	$	413,061

The amount represents trade receivables due from a related party; an entity in which a shareholder of the Company maintains an equity interest. The receivable is interest-free, unsecured and payable in accordance with the Company’s standard trade terms.

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17. STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

STOCKHOLDERS' EQUITY

17. STOCKHOLDERS’ EQUITY

Reverse Stock Split

On October 9, 2012, the Company effectuated a one-for-two reverse split of its preferred and common stock. All references in these financial statements to the number of preferred shares, common shares or warrants, price per share and weighted average number of common shares outstanding prior to the 1:2 reverse stock split have been adjusted to reflect this stock split on a retroactive basis, unless otherwise noted.

Preferred Stock

ForceField is authorized to issue 12,500,000 shares of preferred stock at a par value of $0.001. No shares of preferred stock were issued and outstanding as of either June 30, 2013 or December 31, 2012.

Common Stock

ForceField is authorized to issue 37,500,000 shares of common stock at a par value of $0.001 and had 16,221,112 and 16,080,815 shares of common stock issued and outstanding as of June 30, 2013 and December 31, 2012, respectively.

Common Stock Issued in Private Placements

On September 5, 2011, the Company commenced a new offering of 1.5 million shares at $6.00 per share. In October 2011, the Company accepted a subscription agreement from an investor for 20,000 shares of its common stock and received $120,000 in gross proceeds pursuant to this new offering. In February 2012, the Company issued an additional 10,000 shares of its common stock to the investor as a result of the offering amendment described below.

In February 2012, the Company amended this offering by reducing the share price from $6.00 to $4.00 per share. Since the February 2012 amendment, the Company accepted subscription agreements from investors and issued 12,500 shares of its common stock for gross proceeds totaling $50,000. Additionally, the Company accepted subscription agreements from two of its officers and issued 37,500 shares of its common stock for gross proceeds totaling $150,000. The purchase of these shares is consistent with the terms of the Company’s private placement described above. There was no cost associated with the officer issuances.

On July 1, 2012, the Company modified its offering to include one stock purchase warrant per share of common stock sold. The stock purchase warrants are exercisable at $4.00 per share and expire one year from their date of issuance. Since the July 1, 2012 modification, the Company accepted subscription agreements from investors and issued 562,750 shares of its common stock and equal amount of stock purchase warrants for gross proceeds totaling $2,251,000. Using the Black-Scholes model, the Company allocated a value of $1,530,577 to these stock purchase warrants through the period ended December 31, 2012.

During the six month period ended June 30, 2013 the Company accepted subscription agreements from investors and issued 122,750 shares of its common stock and 135,250 common stock purchase warrants for gross proceeds totaling $491,000. Warrants have been accounted for as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Using the Black-Scholes model, the Company allocated a value of $375,339 to these stock purchase warrants through the period ended June 30, 2013.

Common Stock Issued in Exchange for Services

During the six month period ended June 30, 2013, the Company issued 5,400 shares of its common stock valued at $28,148 in exchange for consulting services. Additionally, the Company issued 7,848 shares of its common stock valued at $42,000 to its three independent directors in accordance with their board compensation agreements and 4,299 shares of its common stock valued at $22,674 in promotional activities to attendees of various financing events hosted by the Company. Each of these share issuances were valued based upon the closing trading share price of the Company’s common stock on their respective dates of award.

Common Stock Issued in the Acquisition of a Business

Effective August 20, 2012, the Company exchanged 255,356 shares of its common stock valued at $965,226, or $3.78 per share, in connection with its equity investment in TPE (see “Note 8 – Business Combinations”).

Common Stock Issued in the Acquisition of Distribution Rights

On August 27, 2012, the Company entered into a five year distribution agreement with Lightsky located in Shanghai, China whereby it became the exclusive distributor of Lightsky LED lighting products in the United States, Canada and Mexico. The Company issued 150,000 shares of its restricted common stock valued at $780,000, or $5.20 per share. The shares are restricted for an eighteen month period from their date of issuance (see “Note 9 – Goodwill and Intangible Assets, Net”).

Stock Purchase Warrants

The following table reflects all outstanding and exercisable warrants for the periods ended December 31, 2012 and June 30, 2013. All stock warrants are exercisable for a period of one year from the date of issuance.

	Number of Warrants Outstanding		Weighted Average Exercise Price		Remaining Contractual Life (Years)
Balance, December 31, 2012		562,750	$	4.00	$	0.20
Warrants issued		135,250	$	4.00		0.68
Warrants exercised		—		—		—
Balance June 30, 2013		698,000	$	4.00		0.29

———————

(1) The remaining contractual life of the warrants outstanding as of June 30, 2013 ranges from 0.01 to 0.93 years.

The value of the common stock options and warrants has been determined using the following Black Scholes methodology:

	June 30, 2013			December 31, 2012
Expected dividend yield (1)		0.00	%		0.00	%
Risk-free interest rate (2)		0.13 – 0.16	%		0.16 – 0.21	%
Expected volatility (3)		111.21 – 146.37	%		111.94 – 152.31	%
Expected life (in years)		1.00			1.00

______________

(1)	The Company has no history or expectation of paying cash dividends on its common stock.
(2)	The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant.
(3)	The volatility of the Company’s common stock is based on trading activity for the previous one year period ended at each stock purchase warrant contract date.

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15. INCOME TAXES

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

15. INCOME TAXES                     

As of June 30, 2013, the Company had federal, state and foreign net operating loss carryforwards aggregating approximately $6.6 million that are available to offset future liabilities for income taxes. The Company has generally established a valuation allowance against these carryforwards based on an assessment that it is more likely than not that these benefits will not be realized in future years. The federal and state net operating loss carryforwards expire at various dates through 2032.

The Company remains subject to examination in federal, state and foreign jurisdictions in which the Company conducts its operations and files tax returns. These tax years range from 2008 through 2012. The Company believes that the results of current or any prospective audits will not have a material effect on its financial position or results of operations as adequate reserves have been provided to cover any potential exposures related to these ongoing audits.

The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provision of FASB ASC 740. 

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 14, 2013
Document And Entity Information
Entity Registrant Name	ForceField Energy Inc.
Entity Central Index Key	0001407268
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		16,265,501
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

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16. DEBT

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

DEBT

16. DEBT

Debt was comprised of the following at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
9% Unsecured, convertible debentures	$	200,000	$	150,000
Less: Current portion		—		—
Long term debt	$	200,000	$	150,000

The following table summarizes the issuance of all unsecured, convertible debentures during the six month period ended June 30, 2013 and year ended December 31, 2012:

Issue Date	Interest Rate	Face Value		Maturity Date	Conversion Rate of Face Value to Common Shares
10/15/2011	9%	$	100,000	10/15/2014	0.125
11/16/2012	9%		50,000	11/16/2015	0.200
02/13/2013	9%		50,000	02/13/2016	0.200
Total		$	200,000

On October 15, 2011, the Company completed the private placement of an unsecured, convertible debenture in the amount of $100,000. The debenture carries an interest rate of 9% per annum, payable semiannually each April 15 and October 15, for a three-year term convertible at a fixed conversion price of $8.00 per share, which equates to 12,500 shares of the Company’s common stock.

On November 16, 2012 and February 13, 2013, the Company completed the private placement of two unsecured, convertible debentures each in the amount of $50,000. The debentures carry an interest rate of 9% per annum, payable semiannually, for a three-year term with a fixed conversion price of $5.00 per share, or 10,000 shares of the Company’s common stock if converted within the first year of issuance or a fixed conversion price of $6.00 per share, or 8,333 shares of the Company’s common stock if converted during the second or third year following issuance.

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20. DEFINED CONTRIBUTION PLAN (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Compensation and Retirement Disclosure [Abstract]
Contribution rate	28.00%	28.00%	28.00%	28.00%
Contribution ammount	$ 10,178	$ 3,634	$ 17,055	$ 11,710

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19. SEGMENT INFORMATION (Details 2) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Goodwill	$ 1,342,834	$ 1,342,834
Intangible assets	4,477,335	4,862,408
Property, plant and equipment	7,913,460	7,547,128
Baokai [Member]
Goodwill	0	0
Intangible assets	0	0
Property, plant and equipment	0	0
Wendeng [Member]
Goodwill	0	0
Intangible assets	2,336,677	2,590,983
Property, plant and equipment	7,913,460	7,547,128
ORC [Member]
Goodwill	1,342,834	1,342,834
Intangible assets	1,490,658	1,543,425
Property, plant and equipment	0	0
LED [Member]
Goodwill	0	0
Intangible assets	650,000	728,000
Property, plant and equipment	0	0
CorporateMember
Goodwill	0	0
Intangible assets	0	0
Property, plant and equipment	$ 0	$ 0