Marquie Group, Inc. - Quarter Report: 2009 August (Form 10-Q)

f10q0809_zhongsen.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2009

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

Zhong Sen International Tea Company

(Exact name of registrant as specified in the Charter)

Florida		000-1434601		26-2091212
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

2416 Lincoln Street, Hollywood, FL 33020

(Address of Principal Executive Offices)

(954) 247-4832

(Issuer Telephone number)

(Former Name or Former Address if Changed Since Last Report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

Yes x No o

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 ¨ 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 filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o

Accelerated Filer o

Non-Accelerated Filer o

Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of October 14, 2009: 60,000,000 shares of common stock.

ZHONG SEN INTERNATIONAL TEA COMPANY

FORM 10-Q

August 31, 2009

TABLE OF CONTENTS

PART I— FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4T.	Controls and Procedures	12

PART II— OTHER INFORMATION

Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 5.	Other Information	13
Item 6.	Exhibits and Reports on Form 8-K	13

SIGNATURES		14

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

ZHONG SEN INTERNATIONAL TEA COMPANY
CONDENSED BALANCE SHEETS


ASSETS
	August 31, 2009			May 31, 2009
	(Unaudited)

CURRENT ASSETS
Cash	$	9,958		$	16,942
Accounts receivable		12,002			11,971

		21,960			28,913
					.
Marketing agreement		120,000			-

TOTAL ASSETS	$	141,960		$	148,913

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	1,500		$	5,000

TOTAL LIABILITIES		1,500			5,000

COMMITMENTS AND CONTINGENCIES		-			-
		.			.

STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 100,000,000 shares authorized, 60,000,000 and 5,000,000 shares issued and outstanding		60,000			5,000
Additional paid in capital		630,194			629,694
Accumulated deficit		(549,734	)		(545,781	)
Total Stockholders’ Equity		140,460			143,913

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	141,960		$	148,913

See Accompanying Notes to the Condensed Unaudited Financial Statements.

ZHONG SEN INTERNATIONAL TEA COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)



	For the three months ended			For the three months ended
	to August 31, 2009			to August 31, 2008
REVENUES:
Marketing revenue	$	36,848		$	-
		36,848			-


OPERATING EXPENSES
Officer's compensation		500			4,500
Professional fees		10,251			24,938
Consulting fees		30,000			50,000
General and administrative		50			104
Total Operating Expenses		40,801			79,542

LOSS FROM OPERATIONS		(3,953	)		(79,542	)

OTHER EXPENSES
Interest Expense		-			-

NET LOSS BEFORE PROVISION FOR INCOME TAXES		(3,953	)		(79,542	)


PROVISION FOR INCOME TAXES		-			-

NET LOSS	$	(3,953	)	$	(79,542	)

Net loss per share - basic and diluted	$	(0.00	)	$	(0.01	)

Weighted average number of shares outstanding during the period - basic and diluted		60,000,000			6,193,478

See Accompanying Notes to the Condensed Unaudited Financial Statements.

ZHONG SEN INTERNATIONAL TEA COMPANY
CONDENSED STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD FROM JANUARY 30, 2008 TO AUGUST 31, 2009
(UNAUDITED)

	Common Stock			Additional			Accumulated Deficit During
	Shares	Amount		Paid-In Capital			Development Stage			Total

BALANCE, JANUARY 30, 2008 (Inception)	-	$	-	$	-		$	-		$	-

Issuance of founders stock	70,000		70		-			-			70

Sale of common stock for cash ($.001 per share)	1,500,000		1,500		-			-			1,500

Sale of common stock for cash ($.01 per share)	2,580,000		2,580		23,220			-			25,800

Common stock issued to Presidnet for services ($.01 per share)	730,000		730		6,570			-			7,300

Common stock issued for professional fees ($.01 per share)	120,000		120		1,080			-			1,200

Net Loss, for the Period January 30, 2008 (Inception) to May 31, 2008	-		-		-			(8,570	)		(8,570	)

Balance May 31, 2008	5,000,000		5,000		30,870			(8,570	)		27,300

Common stock issued for finder's fee	5,000,000		5,000		45,000			-			50,000

Common stock issued for sales and marketing agreement	49,900,000		49,900		449,100			-			499,000

Imputed compensation	-				6,500			-			6,500

Conversion of notes payable and accrued interest to related party	100,000		100		100,399			-			100,499

Stock offering costs	-		-		(2,175	)		-			(2,175	)

Net Loss for the year ended May 31, 2009	-		-		-			(537,211	)		(537,211	)
Balance May 31, 2009	60,000,000	$	60,000	$	629,694		$	(545,781	)	$	143,913

Imputed compensation	-				500			-			500

Net Loss for the thee months ended August 31, 2009	-		-		-			(3,953	)		(3,953	)

Balance August 31, 2009	60,000,000		60,000		630,194			(549,734	)		140,460

See Accompanying Notes to the Condensed Unaudited Financial Statements.

ZHONG SEN INTERNATIONAL TEA COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)


	For the three months ended			For the three months ended
	August 31, 2009			August 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,953	)	$	(79,542	)
Adjustments to reconcile net loss to net cash used in operating activities:
Imputed compensation		500			4,500
Common stock issued for services		-			50,000
Changes in operating assets and liabilities:
Increase in accounts receivable		(31	)		-
Decrease / (increase) in prepaid expenses		-			19,083
Increase / (decrease) in accounts payable		(3,500	)		730
Net Cash Used In Operating Activities		(6,984	)		(5,229	)


CASH FLOWS FROM INVESTING ACTIVITIES:		-			-

CASH FLOWS FROM FINANCING ACTIVITIES:		-			-


NET DECREASE IN CASH		(6,984	)		(5,229	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		16,942			6,300

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9,958		$	1,071



Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

See Accompanying Notes to the Condensed Unaudited Financial Statements.

ZHONG SEN INTERNATIONAL TEA COMPANY

NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS

As of August 31, 2009 and 2008

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

Basis of Presentation

The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended August 31, 2009 are not necessarily indicative of results that may be expected for the year ending May 31, 2010. The financial statements are presented on the accrual basis.

Organization

Zhong Sen International Tea Company (“The Company”) was incorporated on January 30, 2008, in the State of Florida. The Company has the principal business objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies who wish to export and distribute high quality Chinese tea products worldwide. The company commenced business activities in August, 2008, when it entered into a related party Sales and Marketing Agreement with Yunnan Zhongsen Group, Ltd (YZG) , a company located in Kunming, China, to provide sales and marketing consulting services for YZG’s tea and tea related business lines. During the year ended May 31, 2009, the Company exited the development stage.

Use of Estimates:

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those results.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements’ and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

Cash and Cash Equivalents, and Credit Risk:

For purposes of reporting cash flows, the Company considers all cash accounts with maturities of 90 days or less and which are not subject to withdrawal restrictions or penalties, as cash and cash equivalents in the accompanying balance sheet.

The Company maintains a portion of its deposits in a financial institution that insures its deposits with the FDIC insurance up to $250,000 per depositor and deposits in excess of such insured amounts represent a credit risk to the Company. At August 31, 2009 and May 31, 2009 the Company had $0 in cash that was uninsured.

Accounts Receivable

The Company is required to estimate the collectability of its accounts receivable. The Company's reserve for doubtful accounts is estimated by management based on a review of historic losses and the age of existing receivables from specific customers. As of August 31, 2009, the Company deems all account receivable collectible.

Concentration of Credit Risk

During the quarter ended August 31, 2009, one customer accounted for 100% of the Company's sales and 100% of accounts receivable as of August 31, 2009.

Stock Compensation

The Company adopted SFAS No. 123R,Share-Based Payment(“SFAS 123R”), which requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company accounts for stock-based compensation arrangements with nonemployees in accordance with the Emerging Issues Task Force Abstract No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services. The Company records the expense of such services to employees and non employees based on the estimated fair value of the equity instrument using the Black-Scholes pricing model.

Segments

The Company operates in one segment and therefore segment information is not presented.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments including accounts receivable and accounts payable approximate fair value due to the relatively short period to maturity for this instrument.

Earnings Per Share:

Basic earnings per share ("EPS") is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by the Financial Accounting Standards Board (FASB) under Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Shares". Diluted EPS reflects the potential dilution of securities that could share in the earnings. As of August 31, 2009 and 2008 there were no common share equivalents outstanding.

Recent Accounting Pronouncements:

In May 2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The Company is evaluating the impact the adoption of SFAS 165 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. SFAS 166 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 166 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 improves financial reporting by enterprises involved with variable interest entities and to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”, as a result of the elimination of the qualifying special-purpose entity concept in SFAS 166 and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 167 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162”. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is nonauthoritative. The Company is evaluating the impact the adoption of SFAS 168 will have on it’s financial statements.

NOTE 2 - SALES AND MARKETING AGREEMENT WITH RELATED PARTY

On August 29, 2008 the Company entered into a related party sales and marketing agreement with the Yunnan Zhongsen Group, Ltd., or YZG, a Chinese company located in Kunming, Yunnan Province, People’s Republic of China, which caused them to become YZG’s exclusive sales and marketing agent worldwide. The Company receives a commission of 20% of global sales, payable each month based on the Company and YZG’s sales figures. On August 29, 2008, the effective date of the transaction, the Company issued 49,900,000 shares of common stock valued at $499,000 or $.01 per share the most recent cash offering price in exchange for the sales and marketing agreement. The Company has capitalized the value of the Sales and Marketing agreement. As of May 31, 2009 the Company has recorded an impairment on the agreement in the amount of $379,000. The Company issued 5,000,000 shares of common stock valued at $50,000 or $.01 per share the most recent cash offering price as the finder’s fee. The Company expensed the value of the common stock issued at August 31, 2008.

NOTE 3 – NOTES PAYABLE RELATED PARTY

On October 1, 2008, the Company borrowed $100,000 from an officer and director. Interest accrues at 2% per year, and expires on December 31, 2008. On December 31, 2008 the officer and director converted the note and accrued interest of $499 into 100,000 shares of common stock at a price of $1.00499 per share. (See notes 4 and 6)

NOTE 4 - RELATED PARTY TRANSACTIONS

On January 30, 2008 the Company sold its former President and former sole Director 70,000 shares of common stock for $70. ($.001 per share)

During the period January 30, 2008 (Inception) to May 31, 2008, the Company issued its former President and former sole Director 730,000 shares of common stock for services valued at $7,300. ($.01 per share).

On April 6, 2008 the Company sold 100,000 shares of common stock to its Former President and Former Sole Director’s wife for $1,000 ($.01)

On August 29, 2008 the Company entered into a related party sales and marketing agreement with the Yunnan Zhongsen Group, Ltd., or YZG, a Chinese company located in Kunming, Yunnan Province, People’s Republic of China, which caused them to become YZG’s exclusive sales and marketing agent worldwide. The Company receives a commission of 20% of global sales, payable each month based on the Company and YZG’s sales figures. On August 29, 2008, the effective date of the transaction, the Company issued 49,900,000 shares of common stock valued at $499,000 or $.01 per share the most recent cash offering price in exchange for the sales and marketing agreement. The Company has capitalized the value of the Sales and Marketing agreement. As of August 31, 2009 and May 31, 2009 the Company has recorded an impairment on the agreement in the amount of $379,000. The Company issued 5,000,000 shares of common stock valued at $50,000 or $.01 per share the most recent cash offering price as the finders fee. The Company expensed the value of the common stock issued at August 31, 2008.

During the year ended May 31, 2009 the Company recorded imputed compensation of $6,500 for the services contributed by issued its President and its CFO (See Note 6).

During the three months ended August 31, 2009 the Company recorded imputed compensation of $500 for the services contributed by issued its President and its CFO (See Note 6).

NOTE 5 – CONSULTING AGREEMENTS

On September 1, 2008 the Company entered into an agreement with EverAsia Consultant Co., Ltd whereby the Company will pay to EverAsia Consultant Co., Ltd $5,000 per month beginning September 1, 2008 and ending December 31, 2009 for consulting services. During the three months ended August 31, 2009, the Company recorded an expense of $15,000.

On September 1, 2008 the Company entered into an agreement with EverAsia Financial Group, Inc. whereby the Company will pay to EverAsia Financial Group, Inc. $5,000 per month beginning September 1, 2008 and ending December 31, 2009 for management services. During the three months ended August 31, 2009, the Company recorded an expense of $15,000.

NOTE 6 - SHAREHOLDERS' EQUITY

On January 30, 2008 the Company sold its President and sole Director 70,000 shares of common stock for $70. ($.001 per share)(See Note 5).

During the period January 30, 2008 (Inception) to May 31, 2008, the Company issued its President and sole Director 730,000 shares of common stock for services valued at $7,300. ($.01 per share).

In February 2008 the Company sold a total of 1,500,000 shares for net proceeds of $1,500 ($.001 per share). The Company believes this offering is exempt from registration with the US Securities and Exchange Commission.

During the period January 30, 2008 (Inception) to May 31, 2008, the Company undertook a private placement issuance, Regulation D Rule 506 offering of 2,580,000 shares of common stock for net proceeds of $25,800 ($.01 per share). The Company believes this offering is exempt from registration with the US Securities and Exchange Commission.

During the period January 30, 2008 (Inception) to May 31, 2008, the Company issued 120,000 shares of common stock for legal and consulting services. The shares were valued at $1,200 or $.01 per share based on a recent cash offering price.

During the year ended May 31, 2009 the Company recorded imputed compensation of $6,500 for the services contributed by issued its President and its CFO (See Note 4).

During the three months ended August 31, 2009 the Company recorded imputed compensation of $500 for the services contributed by issued its President and its CFO (See Note 4).

On August 29, 2008 the Company entered into a related party sales and marketing agreement with the Yunnan Zhongsen Group, Ltd., or YZG, a Chinese company located in Kunming, Yunnan Province, People’s Republic of China, which caused them to become YZG’s exclusive sales and marketing agent worldwide. The Company receives a commission of 20% of global sales, payable each month based on the Company’s and YZG’s sales figures. On August 29, 2008, the effective date of the transaction, the Company issued 49,900,000 shares of common stock valued at $499,000 or $.01 per share the most recent cash offering price in exchange for the sales and marketing agreement. The Company has capitalized the value of the Sales and Marketing agreement. As of May 31, 2009 the Company has recorded an impairment on the agreement in the amount of $379,000. The Company issued 5,000,000 shares of common stock valued at $50,000 or $.01 per share the most recent cash offering price as the finder’s fee. The Company expensed the value of the common stock issued at August 31, 2008 (see note 3).

On October 1, 2008, the Company borrowed $100,000 from an officer and director. Interest accrued at 2% per year, and expired on December 31, 2008. On December 31, 2008 the officer and director converted the note and accrued interest of $499 into 100,000 shares of common stock at a price of $1.00499 per share (See Notes 3 and 4).

During 2009, the Company paid $2,175 for Blue Sky fees for shares previously issued.

NOTE 7 - GOING CONCERN

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the three months ended August 31, 2009, the Company has an accumulated deficit of $549,734 and used cash in operations of $6,984. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management continues to actively seek additional sources of capital to fund current and future operations. There is no assurance that the Company will be successful in continuing to raise additional capital and establish its business model. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 8 – SUBSEQUENT EVENTS

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through October 13, 2009, the date the financial statements were issued.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

BUSINESS OVERVIEW

Zhong Sen International Tea Company (“The Company”) was incorporated on January 30, 2008, in the State of Florida. The Company has the principal business objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies who wish to export and distribute high quality Chinese tea products worldwide. The company commenced business activities in August, 2008, when it entered into a related party Sales and Marketing Agreement with Yunnan Zhongsen Group, Ltd (YZG) , a related party company located in Kunming, China, to provide sales and marketing consulting services for YZG’s tea and tea related business lines. During the year ended May 31, 2009, the Company exited the development stage.

RESULTS OF OPERATION

Comparison of Results of Operations for the Three Months Ended August 31, 2009 Compared to the Three Months ended August 31, 2008

Total Revenues

We had revenues of $36,848 for the three months ended August 31, 2009 and $0 for the three months ended August 31, 2008. The Company receives 20% of YZG’s sales through the related party Sales and Marketing Agreement we signed with YZG in August, 2008. The increase is primarily due to increasing sales of tea and tea products by our main customer, YZG, as a result of the sales and marketing consulting services we provide to YZG under that Agreement, which was not in effect during the comparable period ending August 31, 2008.

Operating Expenses

Operating expenses for three months ended August 31, 2009 were $40,801 as compared to $79,542 for the three months ended August 31, 2008. The decrease was primarily due to a decrease in professional fees and consulting fees. During the comparable period ending August 31, 2008, the Company incurred higher costs due to startup expenses, as well as the professional fees and consulting fees that resulted from our public offering.

Loss from operations

Loss from operations for the three months ended August 31, 2009 totaled $3,953 compared to a loss of $79,542 for the three months ended August 31, 2008. The decrease in losses is directly attributable to the increase in revenues earned from the related party Sales and Marketing Agreement signed with YZG, as well as the nonrecurring charges taken during the same period in 2008 due to the costs of our public offering.

Net Loss

Net loss was $3,953 for the three months ended August 31, 2009, compared to $79,542 for the three months ended August 31, 2008. The decrease in net loss is mainly due to increases in revenues and a decrease in operating expenses.

PLAN OF OPERATIONS

Our plan of operations for the next twelve months is focused on the following primary objectives.

	1.	Find additional customers to purchase tea products from our contracted supplier, Yunnan Zhongsen Group, Ltd. and;

	2.	Raising capital through private debt or equity offerings.

Subject to the requisite financing, we believe that we can complete the following objectives within the time period specified:

New Supply Agreements

In August 2008, we entered into a related party agreement with Yunnan Zhongsen Group, Ltd., or YZG, a Chinese company located in Kunming, Yunnan Province, People’s Republic of China, which caused us to become YZG’s exclusive sales and marketing agent worldwide. We receive a commission of 20% of global sales, payable each month based on our and YZG’s sales figures. On August 29, 2008, the effective date of the transaction, we issued 49,900,000 shares to approximately 4200 shareholders in exchange for the sales and marketing agreement. Additionally, our former sole director and officer named a new board of directors, and hired new executive officers, and resigned his positions at the company.

Sales Marketing

All sales are generated by external sales and marketing representatives, including those at our related party main supplier, YZG. The product is positioned as a high-end luxury product. The 3,000 year history of this limited production, highly prized product will be essential in positioning the product and in differentiating this product from the current American and European viewpoint of commercially produced tea, as well as setting it apart from much of the tea products offered throughout Asia. The history, culture and ritual surrounding the production of the tea leaf and the ritual of the service and presentation of this luxury item will be exploited and are critical to the positioning of the product.

Our company suggests both direct sales and indirect sales through channel marketing to our client as the methods of getting the product to the worldwide consumer. Direct sales can occur in person, via the phone, the Internet or by mail. Indirect, or channel sales typically refers to sales through a reseller. A reseller can order from us directly, or from a wholesale distributor. In any case, our compensation is on our client’s volume.

We suggest to our client, YZG that they can minimize channel conflicts by employing one or more of the following strategies:

· Segmentation of the product line;

· Establishment of limited or exclusive territories;

· Design price differentiation from direct sales and channels sales providing a cost incentive for the consumer to purchase from the reseller;

· Establishment of rotating promotions for resellers; and/or

· Design a tiered system that would establish reseller levels rewarding higher volume resellers with improved margins.

Based on our recommendations, they will establish and manage their channel marketing program worldwide by establishing a competitive reseller program, recruiting resellers, preparing proper reseller collateral, creating reseller kits, managing the reseller database using Partner Relationship Management (PRM) software, ensuring proper merchandising, ensuring adequate stocking levels, providing reseller education and managing seeding programs. The channel program allows this company to produce a large volume of sales utilizing its existing human resources as, we will have the ability to manage resellers and thereby multiply our resources. Direct sales can be managed mostly by technology through applications available through the Internet, such as, on-line stores with credit card processing portals to accumulate sales orders from direct sales. The proper implementation of these programs effectively eliminates the need for the hiring of additional staff for a significant period of time by the use of technology and the multiplication of resources by contracting with distributors or other resellers.

Revenue Model

Our revenue model contemplates a single form of revenue, but from multiple sources. We anticipate earning our revenue based on the success of our sales and marketing efforts provided to the tea producer. We will earn a percentage of sales directly related to our efforts. Since we will be processing the sales for our client, we will have a direct and firsthand knowledge of the effectiveness of our efforts.

Employees

As of August 31, 2009, the Company has 2 part-time employees.

GOING CONCERN CONSIDERATION

As reflected in the accompanying financial statements, we have an accumulated deficit of $549,734 and used cash in operations of $6,984 during the nine months ended August 31, 2009. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

We believe that actions presently being taken to obtain additional funding and implement our strategic plans provide the opportunity for us to continue as a going concern.

LIQUIDITY AND CAPITAL RESOURCES

As of August 31, 2009, we have assets of $141,960 consisting of cash of $9,958, accounts receivable of $12,002 and intangible assets of $120,000 and total liabilities of $1,500 consisting of accounts payable of $1,500 compared to May 31, 2009 we had assets of $28,913 consisting of cash of $16,942, accounts receivable of $11,971 and total liabilities of $5,000 consisting of accounts payable of $5,000

Cash and cash equivalents from inception to date have been sufficient to cover expenses involved in starting our business. Current cash on hand is insufficient to support our operations for the next twelve months. Therefore, we will require additional funds to continue to implement and expand our business plan during the next twelve months.

CRITICAL ACCOUNTING PRONOUNCEMENTS

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

Revenue Recognition

RECENT ACCOUNTING PRONOUNCEMENTS

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Not applicable because we are a smaller reporting company.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in the Company's internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Currently we are not aware of any litigation pending or threatened by or against the Company.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

On August 20, 2009, Li Jianshang resigned as Secretary. The resignation was for unspecified reasons but was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

On August 20, 2009, the Company changed the position of Wang Li from President and Chairman of the Board of Directors to President, Secretary and Chairman of the Board of Directors of the Company.

Item 6. Exhibits and Reports of Form 8-K.

(a) Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 1350 of Sarbanes Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 1350 of Sarbanes Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ZHONG SEN INTERNATIONAL TEA COMPANY

Date: October 14, 2009	By:	/s/ Nie Pin
		Nie Pin
		Chief Executive Officer

	By:	/s/ Binquan Zhang
		Binquan Zhang
		Chief Financial Officer