Marquie Group, Inc. - Annual Report: 2012 (Form 10-K)

f10k2012_zhongsen.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2012

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

For the transition period from ___________ to ___________

Commission file number 000-54163

ZHONG SEN INTERNATIONAL TEA COMPANY

(Name of registrant as specified in its charter)

Florida		26-2091212
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

14th Floor Guo Fang Building No.68 Wu Yi Road Kunming City, Yunnan Province P. R. China		650032
(Address of principal executive offices)		(Zip Code)

(954) 247-4832

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Name of each exchange on which registered:
None	None

Securities registered under Section 12(g) of the Act:
Common Stock, par value $.001 (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has 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 registrant 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 x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer (Do not check if a smaller reporting company)	o	Smaller reporting company	x

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

As of July 23, 2012, the registrant had 20,000,000 shares of its common stock outstanding.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS

		PAGE
	PART I
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	2
ITEM 2.	Properties	2
ITEM 3.	Legal Proceedings	2
ITEM 4.	Mine Safety Disclosures	3

	PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3
ITEM 6.	Selected Financial Data	4
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	7
ITEM 8.	Financial Statements	8
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	9
ITEM 9A.	Controls and Procedures	9

	PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	11
ITEM 11.	Executive Compensation	14
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	16
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	17
ITEM 14.	Principal Accounting Fees and Services	17

	PART IV
ITEM 15.	Exhibits, Financial Statement Schedules	19

SIGNATURES		20

PART I

ITEM 1. BUSINESS.

General

Zhong Sen International Tea Company (“we” or 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.

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 831,667 shares to approximately 4,200 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. Due to operational and cash flow issues with YZG, a related party and our sole customer, management has determined that future collections under our marketing agreement are doubtful and stopped recording sales in the fourth quarter of 2010 related to this agreement.

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 directly affected by our client’s sales 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 July 2012, the Company has three (3) part-time employees. Our president and chairman of the Board of Directors, our chief executive officer and chief operation officer, and our chief financial officer and principal accounting officer, all have agreed to allocate a portion of their time to the activities of the Company. The employees anticipate that our business plan can be implemented by their devoting no more than 50 hours per year, respectively, to the business affairs of the Company and, consequently, conflicts of interest may arise with respect to the limited time commitment by such officers.

ITEM 1A. RISK FACTORS.

Not applicable because we are a smaller reporting company.

ITEM 2. PROPERTIES.

We have no properties and at this time have no agreements to acquire any properties. We currently use the offices of management at no cost to us. Management has agreed to continue this arrangement until further notice.

ITEM 3. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

No Public Market for Common Stock

There is no trading market for our common stock at present and there has been no trading market to date. There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue.

Holders

There are 2,234 holders of our common stock.

Dividends

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Penny Stock

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person's account for transactions in penny stocks and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Recent Sales of Unregistered Securities

None.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable because we are a smaller reporting company.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this Form 10-K. 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.

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:

RESULTS OF OPERATIONS

Results of Operations for the Year Ended May 31, 2012 As Compared to the Year Ended May 31, 2011

The following table presents the statement of operations for the year ended May 31, 2012 as compared to the year ended May 31, 2011. The discussion following the table is based on these results.

	For The Years Ended May 31,
	2012		2011

REVENUE	$	-	$	105,402

Total operating expenses		11,526,947		353,329

NET LOSS	$	(11,527,868)	$	(247,927	)

Total Revenues

We had revenues of $0 for the year ended May 31, 2012 and $105,402 for the year ended May 31, 2011. Due to operational and cash flow issues with YZG, a related party and our sole customer, management has determined that future collections under our marketing agreement are doubtful and stopped recording sales in the fourth quarter of 2010 related to this agreement.

Operating Expenses

Operating expenses for the year ended May 31, 2012 increased to $11,526,947 from $353,329 for the year ended May 31, 2011 representing an increase of $11,173,618. During the first quarter of 2012, we issued 18,998,992 shares of common stock, with a value of $11,399,395 at the most recent cash sale price of $0.60 per share, as compensation expense to our President for her service to the Company. Additionally, we incurred an increase in professional fees of $3,942, which is attributable to increased audit fees and increase financial printing fees pertaining to XBRL mapping and filing. We realized a decrease in our bad debt expense and reserve for bad debt in the amount of $25,000 due to the receipt of a payment from YZG toward our outstanding Accounts Receivable.

Net Loss

Net loss was ($11,527,868) for the year ended May 31, 2012 compared to ($247,927) for the same period ended May 31, 2011, an increase of ($11,279,941). The increase in losses is attributable to the elimination of revenues as a result of the uncollectability under our related party agreement with YZG, as well as the increase of operating expenses resulting from the stock issuance to our President as compensation during the year ended May 31, 2012.

LIQUIDITY AND CAPITAL RESOURCES

As of May 31, 2012, we have assets of $40 consisting of cash of $40 and total liabilities of $224,509, consisting of accounts payable of $223,637, notes payable from related party of $50, convertible debenture payable (net of discount) of $822, compared with May 31, 2011, when we had assets of $17 consisting of cash of $17 and total liabilities of $102,013, consisting of accounts payable of $101,599 and loans payable of $414.

On April 11, 2012, the Company issued a one year 12% Convertible Debenture (“Debenture”) in the principal amount of $6,000, to an individual for the sole purpose of funding ongoing operations. The principal and accrued interest of the Debenture is convertible on October 11, 2012 into shares of common stock, par value $0.001 per share, at a conversion price of $0.01 per share. The Company recorded a debt discount of $6,000 for the beneficial conversion feature. Amortization of the debt discount amounted to $822 at May 31, 2012.

We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that additional financing will be available. In the absence of additional financing, we may be unable to proceed with our plan of operations. This raises substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its 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.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

We intend to hire additional employees for sales, administrative and finance support staff as necessary, though we have no time frame in which we expect to hire such staff. Additional sales staff, when required, will be hired on a commission basis, and administrative and finance support staff will only be hired when revenues are such that the company can support such a staff. Completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our goal of profit, revenue and growth.

We anticipate that our general and administrative expenses for the next 12 months will total $183,200.

The breakdown is as follows:

General and Administrative
Legal and Accounting	$	45,000
Telecommunications		1,200
Office Supplies		500
Postage & Shipping		1,200
Travel		8,000
Utilities		4,800
Consulting Fees		120,000
Salaries and Wages		2,000
Taxes and Licenses		500
TOTAL	$	183,200

The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and status of our business plan. In the event we are not successful in reaching our initial revenue targets, additional funds may be required and we would then not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we could incur operating losses in the foreseeable future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our business operations to cover our operating expenses.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are summarized in Note 1 of our financial statements included in this annual report on Form 10-K for the year ended May 31, 2012. 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 of 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.

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 7A. QUANTITIATIVE AND QUALITATIVE DISCLOUSURES ABOUT MARKET RISK.

Not applicable because we are a smaller reporting company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

ZHONG SEN INTERNATIONAL TEA COMPANY

FINANCIAL STATEMENTS

F-1	REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-2	BALANCE SHEETS

F-3	STATEMENTS OF OPERATIONS

F-4	STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

F-5	STATEMENTS OF CASH FLOWS

F-6 - F-14	NOTES TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:

Zhong Sen International Tea Company

We have audited the accompanying balance sheets of Zhong Sen International Tea Company (the “Company”) as of May 31, 2012 and 2011, and the related statements of operations, changes in stockholders’ deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Zhong Sen International Tea Company as of May 31, 2012 and 2011 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has a net loss of $11,527,868, a working capital deficiency and stockholders deficiency of $224,469 and has an accumulated deficit of $12,323,558 as of May 31, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

WEBB & COMPANY, P.A.

Certified Public Accountants

Boynton Beach, Florida

July 23, 2012

F-1

ZHONG SEN INTERNATIONAL TEA COMPANY
BALANCE SHEETS

ASSETS

	May 31
	2012			2011

CURRENT ASSETS
Cash	$	40		$	17
TOTAL ASSETS	$	40		$	17

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

CURRENT LIABILITIES
Accounts payable	$	223,637		$	101,599
Convertible debenture (Net of discount of $5,178)		822			-
Notes payable - related party		50			414

TOTAL LIABILITIES		224,509			102,013

COMMITMENTS AND CONTINGENCIES (See Note 5)

STOCKHOLDERS’ DEFICIENCY
Common stock, $0.001 par value, 100,000,000 shares authorized, 20,000,000 and 1,001,008 shares issued and outstanding, respectively		20,000			1,000
Additional paid in capital		12,079,089			692,694
Accumulated deficit		(12,323,558	)		(795,690	)
Total Stockholders’ Deficiency		(224,469	)		(101,996	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	40		$	17

See Accompanying Notes to the Financial Statements

F-2

ZHONG SEN INTERNATIONAL TEA COMPANY

STATEMENTS OF OPERATIONS

	For the Years Ended
	May 31, 2012			May 31, 2011
REVENUES:
Marketing revenue	$	-		$	105,402
		-			105,402

OPERATING EXPENSES
Officer's compensation		11,399,395			2,000
Professional fees		29,982			26,040
Consulting fees		120,000			120,000
Impairment of related party marketing agreement		-			120,000
Bad debt expense		(25,000	)		57,640
General and administrative		2,570			27,649
Total Operating Expenses		11,526,947			353,329

NET LOSS FROM OPERATIONS		(11,526,947	)		(247,927	)

OTHER EXPENSE
Interest expense		921			-
Total Other Expense		921			-

NET LOSS BEFORE PROVISION FOR INCOME TAXES		(11,527,868	)		(247,927	)

PROVISION FOR INCOME TAXES		-			-

NET LOSS	$	(11,527,868	)	$	(247,927	)

Net loss per share - basic and diluted	$	(0.61	)	$	(0.25	)

Weighted average number of shares outstanding during the period - basic and diluted		18,854,855			1,001,008

See Accompanying Notes to the Financial Statements

F-3

ZHONG SEN INTERNATIONAL TEA COMPANY
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED MAY 31, 2012 AND 2011

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

Balance May 31, 2010		1,001,008	$	1,000	$	690,694	$	(547,763	)	$	143,931

Imputed compensation		-		-		2,000		-			2,000

Net loss for the year ended May 31, 2011		-		-				(247,927	)		(247,927	)

Balance May 31, 2011		1,001,008		1,000		692,694		(795,690	)		(101,996	)

Issuance of common stock for services		18,998,992		19,000		11,380,395		-			11,399,395

Beneficial conversion feature		-		-		6,000		-			6,000

Net loss for the year ended May 31, 2012		-		-		-		(11,527,868	)		(11,527,868	)

Balance May 31, 2012		20,000,000	$	20,000	$	12,079,089	$	(12,323,558	)	$	(224,469	)

See Accompanying Notes to the Financial Statements

F-4

ZHONG SEN INTERNATIONAL TEA COMPANY
STATEMENTS OF CASH FLOWS

	For the Years Ended May 31
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,527,868	)	$	(247,927	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services		11,399,395			-
Bad debt expense		(25,000	)		57,640
Amortization expense		822			-
Impairment of marketing agreement		-			120,000
In kind contribution of services		-			2,000
Changes in oerating assets and liabilities:
(Decrease)/Increase in accounts receivable		25,000			(29,340	)
Increase in accounts payable		122,038			96,213
Net Cash Used In Operating Activities		(5,613	)		(1,414	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Convertible debenture		6,000
Repayment of notes payable -related party		(4,189	)
Notes payable - related party		3,825			-
Net Cash Provided by Financing Activities		5,636			-

NET INCREASE/(DECREASE) IN CASH		23			(1,414	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		17			1,431

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	40		$	17

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Debt discount on beneficial conversion feature	$	5,178		$	-

See Accompanying Notes to the Financial Statements

F-5

ZHONG SEN INTERNATIONAL TEA COMPANY

NOTES TO THE FINANCIAL STATEMENTS

AS OF MAY 31, 2012

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

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/k/a Yunnan Zhongsen Commercial Forest Plantation Group Inc., a/k/a Yunnan Zhongsen Forest Co., Ltd.), a company located in Kunming, China, to provide sales and marketing consulting services for YZG’s tea and tea related business lines.

Functional Currency

We reviewed the requirements as set forth in FASB ASC 830-10-55-4, "in those instances in which the indicators are mixed and the functional currency is not obvious, management's judgment will be required to determine the functional currency that most faithfully portrays the economic results of the entity's operations and thereby best achieves the objectives of foreign currency translation set forth in paragraph 830-10-10-2." Paragraph 830-10-10-2 provides that the foreign currency translation must accurately reflect the reporting company's cash flows and equity when applying a rate change. Both our functional and reporting currency is US Dollars. The Company uses the US Dollar as this is the economic environment of its operations. The Company maintains its bank account in US Dollars, pays invoices in US Dollars, and most agreements require the amounts to be settled in US Dollars. We therefore feel that the US Dollar is our functional currency.

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. Significant estimates include the valuation of deferred taxes and the reserve for doubtful accounts. Actual results could differ from those results.

Revenue Recognition

The Company recognizes revenue from marketing arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized at the time the commissions or fees have been earned, which is upon the completion of the sale and when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

F-6

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.

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. In January 2012 the Company received a $25,000 payment on past due accounts receivable. The payment was recorded as a reduction of the reserve for doubtful accounts. As of May 31, 2012 and 2011, the Company recorded a reserve for doubtful accounts of $32,640 and $57,640, respectively.

Concentration of Credit Risk

During the year ended May 31, 2011 one related party customer located in China accounted for 100% of the Company's sales. The same related party customer accounted for 100% of accounts receivable as of May 31, 2012 and 2011.

Stock Compensation

The Company follows FASB Accounting Standards Codification No. 718 – Compensation – Stock Compensation for share based payments to employees. The Company follows FASB Accounting Standards Codification No. 505 for share based payments to Non-Employees

Segments

The Company operates in one segment and therefore segment information is not presented. 100% of our sales revenue is derived from a company located in China and 100% of our accounts receivable balances are from the same customer located in China. Please refer to the above “Concentration of Credit Risk”.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments including convertible debenture, notes payable to related party and accounts payable approximate fair value due to the relatively short period to maturity for these instruments.

Evaluation of Intangible Asset for Impairment

On a quarterly basis, management reviews its current and expected future cash flow derived from its intangible assets and determines if any impairment exists and if there is a need to record an impairment. We will update our future filings to include our accounting policy for evaluating intangible assets for impairment.

F-7

The Company has capitalized the value of the Sales and Marketing agreement. The Management determined upon review of current and expected future cash flow derived from the Sales and Marketing Agreement that the value of the Agreement had been impaired. As of May 31, 2011 the Company has recorded an impairment on the agreement in the amount of $499,000. The Company issued 83,333 shares of common stock valued at $50,000 or $.60 per share as the finder’s fee. The Company expensed the value of the common stock issued at August 31, 2008.The Company evaluates the recoverability of the sales and marketing agreement annually and whenever events or circumstance make it more likely than not that impairment may have occurred. Several factors are used to evaluate the intangible asset, including management’s plans for future operations and recent operating results. In the event facts and circumstances indicate the carrying value of the license agreement is impaired, the license agreements carrying value will be reduced to its implied fair value through a charge to operating expenses. At May 31, 2011, the Company evaluated the recoverability of the sales and marketing agreement, and the collectability of related accounts receivable. The Company determined that as a result of an increase in the possibility of the uncollectability of its accounts receivable, the sales and marketing agreement should be further impaired. During the year ended May 31, 2011, the Company recorded an impairment on the Agreement of $120,000.

Earnings Per Share:

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.” As of May 31, 2012 and, 2011, there were no common share equivalents outstanding.

Income Taxes:

The Company accounts for income taxes under the FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates (37.63%) expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Recent Accounting Pronouncements

In December 2011, FASB issued Accounting Standards Update 2011-11, Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such, we do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.

F-8

NOTE 2 - SALES AND MARKETING AGREEMENT WITH RELATED PARTY

On August 29, 2008 the Company entered into a related party Sales and Marketing Agreement (the “Agreement”) with the Yunnan Zhongsen Group, Ltd. (formerly known as Yunnan Zhongsen Forest Co., Ltd. (a/k/a Yunnan Zhongsen Commercial Forest Plantation Group Inc) on or before September 1, 2008), 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. The Agreement is for a fifty year term, commencing on the Closing Date and ending on August 29, 2058 (the “Initial Term”). The Initial Term shall be automatically extended for additional terms of successive fifty year periods (the “Additional Term”) unless the Parties give written notice to the other of the termination of the Agreement hereunder at least 180 days prior to the expiration of the Initial Term or Additional Term. Under the Agreement, the Company shall provide sales, marketing and finance services to YZG as the exclusive worldwide sales agent, and shall identify customers throughout the entire world for YZG products and services. The Company shall further, within such limitations relating to price, delivery and other key terms as YZG may, from time to time specify in writing, and subject to acceptance by YZG (by telex or otherwise), negotiate sales contracts as YZG’s exclusive worldwide sales agent, inside and outside of China.

On August 29, 2008, the effective date of the transaction, the Company issued 831,667 shares of common stock valued at $499,000 or $.60 per share the most recent cash offering price in exchange for the sales and marketing agreement to 4,200 YZG shareholders, who were, at the time, made up of shareholders, officers and directors, friends and family, and suppliers and customers of YZG. Prior to the transaction, there were no common shareholders, officers, directors or other related parties or transactions between the Company and YZG. The Company determined the fair value of the equity exchanged was the more reliable measurement of the assets acquired. ASC 805-50-25-1 requires the equity issued to be recognized on the date of the acquisition. At the time the company entered into the marketing agreement, we had recently completed a private placement of stock for cash. Based on the current cash offering price, it was determined that this was the fair value of the stock and this value was used to value the transaction.

In August 2010, the 5 current shareholders of YZG, acquired all of the outstanding shares of YZG from the previous 4,200 shareholders, among which selling shareholders was Ms. Wang. In connection with their acquisition of the YZG shares, the former officers and directors of YZG, including Zhou Zhongping, Zou Jun and Pin Nie, resigned from their positions in YZG effective August 2010. On August 29, 2008, Ms. Wang owned 13.61% of YZG, which was subsequently sold to the 5 current shareholders in August 2010 in an undisclosed ratio. Currently, none of our officers and directors is related to the owners of YZG.

The Company determined the fair value of the equity exchanged was the more reliable measurement of the assets acquired. ASC 805-50-25-1 requires the equity issued to be recognized on the date of the acquisition. At the time the company entered into the marketing agreement, we had recently completed a private placement of stock for cash. Based on the current cash offering price, it was determined that this was the fair value of the stock and this value was used to value the transaction.

In May, 2011, we impaired the entire value of the Marketing Agreement due our inability to collect our receivables from YZG. While YZG continues to assure us that they are obligated to make, and will make, payment on our open receivable from them, we have thus far been unable to collect our receivable. The inability to collect this receivable has caused us to examine the value of the Marketing Agreement, based on the future value of the revenues and the ability of us to collect those revenues, and we determined that it is in our best interest to impair the remaining value of the Marketing Agreement.

F-9

We are not under common ownership or management as YZG with the exception of our President and Chairman, Wang Li, who currently serves as a director on the Board of Directors of YZG. The following tables set forth our current Officers and Directors and the Officers, Directors and ownership interests of YZG.

Name	Director of ZSIT	ZSIT Officer/Title	Director of YZG	YZG Officer/Title	Ownership Interest in YZG
Li Wang	X	President/Secretary	X
Zhou Zhongping	X
Zou Jun	X
Pin Nie	X	CEO, COO
Binquan Zhang	X	CFO
Kaibiao Yin			X	President
DelinFeng			X	Executive VP
Ruigang Su			X	Administrative VP
FeiZou			X	VP of Sales
Baosheng Wang			X
Jinquan Ma			X
Fei Wang					40%
Xiaochuan Wang					30%
Jinfei Zhang					20%
Guisheng Wang					5%
Tenggao Liu					5%

NOTE 3 – OTHER RELATED PARTY TRANSACTIONS

During the years ended May 31, 2012 and 2011 the Company recorded imputed compensation of $0 and $2,000, respectively for the services contributed by its President and its CFO (See Note 7)

During the year ended May 31, 2011, a stockholder advanced $414 to the Company. The loan is interest free and is payable on demand. The loan was repaid during the year ended May 31, 2012.

During the year ended May 31, 2012, a stockholder loaned the Company $3,825 and $3,775 was repaid. The loans are interest free and are payable on demand. As of May 31, 2012, $50 is still owed to the stockholder

F-10

NOTE 4 – CONSULTING AGREEMENTS

On September 1, 2008 the Company entered into an agreement with EverAsia Financial Consultant Co., Ltd whereby the Company will pay to EverAsia Financial Consultant Co., Ltd $5,000 per month beginning September 1, 2008 and ending December 31, 2009 for consulting services. On December 31, 2009, the contract was extended until December 31, 2011. During the years ended May 31, 2012 and 2011 the Company recorded an expense of $60,000 and $60,000, respectively. EverAsia Financial Consultant Co., Ltd provides consulting services as they pertain to complying with business practices in the US as they differ from Chinese business practices, advisory services with regard to business expansion, regulatory compliance, general bookkeeping services, registered agent services, mail, phone and office hosting.

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. On December 31, 2009, the contract was extended until December 31, 2011. During the years ended May 31, 2012 and 2011, the Company recorded an expense of $60,000 and $60,000, respectively. EverAsia Financial Group, Inc. provides consulting services as they pertain to complying with business practices in the US as they differ from Chinese business practices, advisory services with regard to business expansion, regulatory compliance, general bookkeeping services, registered agent services, mail, phone and office hosting.

EverAsia Consultant Co., Ltd provides consulting services as they pertain to complying with business practices in the US as they differ from Chinese business practices, advisory services with regard to business expansion, regulatory compliance, general bookkeeping services, registered agent services, mail, phone and office hosting.

NOTE 5 – COMMITMENTS AND CONTINGENCIES

CONVERTIBLE DEBENTURE

	May 31,
	2012

Loan amount	$	6,000
Discount		(5,178	)
Balance	$	822

LOANS FROM STOCKHOLDER

During the year ended May 31, 2011, a stockholder advanced $414 to the Company. The loan is interest free and is payable on demand. The loan was repaid during the year ended May 31, 2012.

F-11

During the year ended May 31, 2012, a stockholder loaned the Company $3,825 and $3,775 was repaid. The loan is interest free and is payable on demand. As of May 31, 2012, $50 is still owed to the stockholder. (See Note 3).

NOTE 6 - STOCKHOLDERS' EQUITY

During the year end May 31, 2011 the Company recorded imputed compensation of $2,000 for the services contributed by its President and its CFO, respectively (See Note 3).

During the year ended May 31, 2012, the Board of Directors authorized the issuance of 18,998,992 common shares to our President and CEO as compensation, with a fair value of $11,399,395 at $0.60 per share, the last cash offering price of our common stock. The shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended. (See Note 3)

On May 20, 2011, the Company's stockholders approved a 1 for 60 reverse stock split for its common stock. As a result, stockholders of record at the close of business on May 5, 2011, received one share of common stock for every sixty shares held. Common stock, additional paid-in capital, share and per share data for prior periods have been restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

NOTE 7 – INCOME TAXES

The net deferred tax liability in the accompanying balance sheet includes the following amounts of deferred tax assets and liabilities:

	Years Ended May 31,
	2012		2011

Deferred tax liability	$	-	$	-
Deferred tax asset		-		-
Impairment of marketing agreement		106,963		171,135
Net Operating Loss Carry forward		163,163		124,326
Valuation allowance		(270,126)		(295,461)
Net deferred tax asset		-		-
Net deferred tax liability	$	-	$	-

F-12

The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to utilize all of the net operating loss carryforwards before they will expire through the year 2032.

The net change in the valuation allowance for the year ended May 31, 2012 was an increase of $25,335.

The components of income tax expense related to continuing operations are as follows:

	2012		2011
Federal
Current	$	-	$	-
Deferred		-		-
	$	-	$	-
State and Local
Current	$	-	$	-
Deferred		-		-
	$	-	$	-

The Company's income tax expense differed from the statutory rates (federal 34% and state 5.50%) as follows:

	Year Ended May 31,			Year Ended May 31,
	2012			2011

Statutory rate applied to loss before income taxes:	$	(4,337,936	)	$	(93,295	)
Increase (decrease) in income taxes resulting from:
Change in deferred tax asset valuation allowance		25,335			92,542
Other		4,312,601			753
Income Tax Expense	$	-		$	-

The Company’s federal income tax returns for the years ended May 31, 2010 through May 31, 2012 remain subject to examination by the Internal Revenue Service as of May 31, 2012.

F-13

NOTE 8 - 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 year ended May 31, 2012 the Company has a net loss of $11,527,868, a working capital deficiency and stockholders’ deficiency of $224,469 and has an accumulated deficit of $12,323,558 as of May 31, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management continues to provide consulting services to the Company’s main customer and related party, YZG, in anticipation that economic conditions will continue to improve and that YZG will be able to continue to make payments under the Marketing Agreement. 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 9 – SUBSEQUENT EVENTS

None

F-14

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, our management, including our chief executive officer and our chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2012.

Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based on that evaluation we believe that our disclosure controls and procedures were not effective as of May 31, 2012.

Management’s Annual Report on Internal Control over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

We maintain our books and records in accordance with US GAAP. All invoices, payments, and accounting records are entered on a weekly basis using QuickBooks software. All entries are reviewed both by Management and by our CFO on a weekly basis, and by our CFO Consulting Services firm on a quarterly basis.

Our management, including our chief executive officer and our chief financial officer, is responsible for establishing and maintaining for us adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Our internal control system was designed to, in general, provide reasonable assurance to our management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Our management, including our chief executive officer and our chief financial officer, assessed the effectiveness of our internal control over financial reporting as of May 31, 2012. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. During our assessment of the effectiveness of internal control over financial reporting as of May 31, 2012 management identified significant deficiencies related to (i) the U.S. GAAP expertise of our internal accounting staff, (ii) our internal audit functions, (iii) the ability of our internal accounting staff to record our transactions to which we are a party which necessitates our bringing in external consultants to supplement this function, and (vi) a lack of segregation of duties within accounting functions. Therefore, our internal controls over financial reporting were not effective as of May 31, 2012 based on the material weakness described below.

●	insufficient monitoring controls to determine the adequacy of our internal control over financial reporting and related policies and procedures;

●	lack of competent financial management personnel with appropriate accounting knowledge and training;

●	our financial staff does not hold a license such as Certified Public Accountant in the U.S., nor have they attended U.S. institutions or extended educational programs that would provide enough of the relevant education relating to U.S. GAAP, nor have any U.S. GAAP audit experience;

●	rely on outside consultant to prepare our financial statements; and

●	insufficient controls over our period-end financial close and reporting processes

As a result of this material weakness, our management concluded that our internal control over financial reporting was not effective as of May 31, 2012. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness; yet important enough to merit attention by those responsible for oversight of the company’s financial reporting.

Because of its inherent limitations, however, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

In order to mitigate the foregoing material weakness, we engaged an outside accounting consulting to assist us in the preparation of our financial statements to ensure that these financial statements are prepared in conformity to U.S. GAAP. This outside accounting consultant is a certified public accountant in the U.S. and has significant experience in the preparation of financial statements in conformity with U.S. GAAP. We believe that the engagement of this consultant will lessen the possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis, and we will continue to monitor the effectiveness of this action and make any changes that our management deems appropriate. We expect to continue to rely on this outside consulting arrangement to supplement our internal accounting staff for the foreseeable future. Until such time as we hire the proper internal accounting staff with the requisite U.S. GAAP experience, however, it is unlikely we will be able to remediate the material weakness in our internal control over financial reporting.

We believe that the foregoing steps will remediate the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended May 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our executive officers and directors and their ages as of July 23, 2012 are as follows:

Name	Age	Position	Date Appointed
Li Wang	52	President, Secretary, Chairman of the Board of Directors	August 29, 2008
Zhongping Zhou	38	Independent Director	August 29, 2008
Jun Zou	43	Independent Director	August 29, 2008
Pin Nie	53	Chief Operating Officer, Chief Executive Officer, Director	August 29, 2008
Binquan Zhang	49	Chief Financial Officer, Chief Accounting Officer, Director	October 15, 2008

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

Li Wang, President, Secretary and Chairman of the Board

Ms. Wang is our President, Secretary and Chairman of the Board, as well as a Director of Yunnan Zhongsen Commercial Forest Plantation Group Inc., an agricultural corporation that specializes in the cultivation of Pu’er tea and other forest products in Yunnan Province, P.R. China. She is proficient in corporate management and computer technology. Ms. Wang’s other business ventures includes health care, catering and mineral exploration. Prior to joining our company, she worked for the Yunnan Commodity Administration Bureau from December, 1985 through October, 2007, when she chose to devote her full time and efforts to establishing the Yunnan Zhongsen Commercial Forest Plantation Group, Inc, which she subsequently sold in 2011 to pursue other business interests.

Zhongping Zhou, Independent Director

Mr. Zhou has broad interests in art and culture, which allows him to incorporate aspects of the arts with the culture of Pu’er tea. He currently serves as assistant secretary of Yunnan Zhongsen Commercial Forest Plantation Group Inc., and manager of Pu’er tea flagship shop in Kunming. In addition, Mr. Zhou works to improve shelter and water supply conditions for tea farmers as well as college students. He has a Bachelor of Arts degree from Tsingha University.

Jun Zou, Independent Director

Mr. Zou received his post-graduate education in California University and majored in International Law. Mr. Zou is an officer of Yunnan Zhongsen Commercial Forest Plantation Group Inc. He is also a professional Legal advisor who provides services including legal consultant, legal support and corporation structure design. He serves as Vice-president of Zhong Fa Attorney Affairs Office, and officer of Legal Daily. He is one of the pioneers who dealt with cases of sexual harassment in China, and was the first attorney who took Chinese traffic police to trial. Having been Securities Counsel to listed companies in China and legal consultant to the Journalism Committee for over 5 years, he brings his strong business ethics and knowledge of the private sector to the Company.

Pin Nie, Chief Executive Officer, Chief Operating Officer and Director

Mr. Nie is our Chief Executive Officer, Chief Operating Officer and a member of our Board of Directors. Mr. Nie is a an efficiency expert who successfully designed and presided over more than 100 cases involving sales and marketing programs to commonweal activities. Among his successes was the Vietnam 411 Cow Development Strategy, which improved the Vietnam milk import industry. He is also a writer and journalist who has had five of his works adapted to film. He is the Chief Designer of Yunnan Zhongsen Commercial Forest Plantation Group Inc. He is also an expert in business models and corporate structure reformation. He is currently engaged as president of Longfeng Advertisement Inc., and President of Yunnan Harmonious Cultural Spread Inc., and serves as the Director of China Pu’er International Inc. He brings his knowledge and talents of the private sector having been a multi-unit media manager and developer and as management design for over 15 years.

Binquan Zhang, Chief Financial Officer, Chief Accounting Officer and Director

Binquan Zhang received his post-graduate education in the Chinese Academy of Social Sciences and majored in Economics. Mr. Zhang serves as Chief Financial Officer of Zhong Sen International Tea Company. He is a certified public accountant with various work experience which includes his services as Chief Financial Officer in ZSIT effective as of October 15, 2008. As early as 1987, he started his work on accounting in Yunnan Tin Group. From 1987 to 1990, he worked as an Officer in the management department in Yunnan Tin Group and was mainly responsible for resources arrangement and financial affairs. From December of 1990 to the December of 1997, he was engaged as Financial Director, Financial Controller, as well as Chief Financial Officer in Yunnan at AiPhia Solder Corporation Ltd, a Sino-US joint venture company that specializes in the production of silver-based solder, solder copper, tin-lead solder, lead-free solder and flux in professional production. From 2001 to now, he was engaged as Chief Financial Officer of Kunming Pantong Co., Ltd., a company with registered capital of 200,000,000 RMB and specialized in real estate. In addition, he is also skilled in information technology and passed national computer rank examinations for the senior technician’s teams.

None of the officers or directors have any material plan, contract or arrangement to which an officer or director is a party or in which he or she participates that is entered into in connection with the triggering event or any grant or award to any such covered person under any such plan, contract or arrangement in connection with any such event.

Committees and Meetings

We do not have a standing audit committee of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Item 407(d) of Regulation S-K is beyond its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its financial statements at this stage of its development.

Family Relationships

There are no family relationships between our director and executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, our sole director and officer has not been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” our sole director and officer has not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Compliance With Section 16(A) Of The Exchange Act

Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and are required to furnish copies to the Company. To the best of the Company’s knowledge, all reports required to be filed were timely filed in fiscal year ended May 31, 2012.

Code of Ethics

We have adopted a Code of Ethics applicable to our Chief Executive Officer and Chief Financial Officer which has been filed previously.

ITEM 11. EXECUTIVE COMPENSATION.

Compensation of Executive Officers

The following table sets forth information concerning the compensation for the fiscal years ended May 31, 2012 and May 31, 2011 of our directors and officers.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)			Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Totals ($)
Li Wang	2012		-		-		11,399,395	(1)		-		-		-		-		11,399,395
President and Chairman	2011		--		-		-			-		-		-		-		-
Pin Nie	2012		-		-		-			-		-		-		-		-
Chief Operating Officer, Chief Executive Officer and Director	2011		-		-		-			-		-		-		-		-
Binquan Zhang	2012		-		-		-			-		-		-		-		-
Chief Financial Officer, Chief Accounting Officer and Director	2011		-		-		-			-		-		-		-		-

(1)	During the year ended May 31, 2012, the Board of Directors authorized the issuance of 18,998,992 common shares to our President and CEO as compensation, with a fair value of $11,399,395 at $0.60 per share, the last cash offering price of our common stock.

Option Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officers named in the Summary Compensation Table through May 31, 2012.

Aggregated Option Exercises and Fiscal Year-End Option Value Table. There were no stock options exercised during period ending May 31, 2012 by the executive officer named in the Summary Compensation Table.

Long-Term Incentive Plan (‘LTIP’) Awards Table. There were no awards made to a named executive officer in the last completed fiscal year under any LTIP.

Compensation of Directors

Our Directors who also serve as employees of the Company do not receive payment for services as directors. The independent directors of the Board of Directors are responsible for reviewing and making decisions regarding all matters pertaining to fees and retainers paid to Directors of the Board. The independent directors may engage consultants or advisors in connection with their compensation review and analysis. The independent directors did not engage any consultants in the fiscal year ended May 31, 2012.

In making non-employee Director’s compensation decisions, the independent directors take various factors into consideration, including, but not limited to, the responsibilities of Directors generally, as well as committee chairs, and the forms of compensation paid to directors by comparable corporations.

We do not currently compensate our other directors. We may establish certain compensation plans (e.g. options, cash for attending meetings, etc.) with respect to directors in the future.

The following table sets forth information concerning cash and non-cash compensation paid by the Company to its directors during the last fiscal year ended May 31, 2012.

Fees

Earned

or Paid

in Cash

Stock

Awards

Option

Awards

Non-Equity Incentive Plan Compensation

Non-Qualified Compensation Earnings

All Other Compensation

Total

Name

($)

Li Wang

Pin Nie

Bingquan Zhang

Jun Zou

Zhongping Zhou

The directors will also be reimbursed for all of their out-of-pocket expenses in traveling to and attending meetings of the Board of Directors and committees on which they serve.

Employment Agreements

We do not have any employment agreements with our officers or directors currently.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information regarding the ownership of our capital stock, as of July 23, 2012, for: (i) each director; (ii) each person who is known to us to be the beneficial owner of more than 5% of our outstanding common stock; (iii) each of our executive officers named in the Summary Compensation Table; and (iv) all of our current executive officers and directors of as a group. Except as otherwise indicated in the footnotes, all information with respect to share ownership and voting and investment power has been furnished to us by the persons listed. Except as otherwise indicated in the footnotes, each person listed has sole voting power with respect to the shares shown as beneficially owned.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner		Percent of Class (1)

Common Stock	Li Wang No.145 Wenlin Street Wuhua District Kunming, Yunnan 650000 China		19,112,422		95.56	%

Common Stock	Zhongping Zhou Nanhuan Road Jingzhou District Jingzhou,Hubei 434100 China		500		0.00	%

Common Stock	Pin Nie No.4,Unit# 4 No.96 Taoyuan Street West District Panzhihua, Sichuan 617000 China		2,167		*

Common Stock	Jun Zou 172 Jinbi Road Kunming, Yunnan 65000 China		0		0.00	%

Common Stock	Binquan Zhang 14th Floor Guo Fang Building No.68 Wu Yi Road Kunming City, Yunnan Province P. R. China		0		0.00	%


Common Stock	All officers and directors as a group (5) persons)		19,115,089		95.57	%

* Less than 1%

(1) Based on 20,000,000 shares of our common stock issued and outstanding as of July 23, 2012.

Securities authorized for issuance under equity compensation plans.

We have no equity compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

We currently use the offices of management at no cost to us.

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 831,667 shares of common stock valued at $499,000 or $.60 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, 2012 the Company has recorded an impairment on the agreement in the amount of $499,000. The Company issued 83,333 shares of common stock valued at $50,000 or $.60 per share, which was the most recent cash offering price at the time, as the finder’s fee. The Company expensed the value of the common stock issued at August 31, 2008.

On December 31, 2008, our President converted a note payable in the amount of $100,000 and accrued interest of $499 into 1,667 common shares at a purchase price of $60.29 per common share. The shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended.

During the years ended May 31, 2012 and 2011 the Company recorded compensation of $11,399,395 and $0 and imputed compensation of $0 and $2,000 for services provided by its President and its CFO, respectively.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

For our fiscal year ended May 31, 2011, we were billed approximately $10,785 for professional services rendered for the audit and reviews of our financial statements. For our fiscal year ended May 31, 2012, we were billed approximately $15,493 for professional services rendered for the audit and reviews of our financial statements.

Audit Related Fees

For our fiscal years ended May 31, 2012 and 2011 we did not incur any audit related fees.

Tax Fees

For our fiscal years ended May 31, 2012 and 2011, we were billed $0 and $0, respectively for professional services rendered for tax compliance, tax advice, and tax planning.

All Other Fees

The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended May 31, 2012 and 2011.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

-	approved by our audit committee; or

entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors. Our board of directors evaluated the fees for the fiscal year ended 2012 based on those paid in the fiscal year ended 2011 and therefore all of the above services and fees were reviewed and pre-approved by the entire board of directors before the respective services were rendered.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as part of this report:

(1) Financial Statements and Report of Independent Registered Public Accounting Firm, which are set forth in the index to Consolidated Financial Statements on pages F-1 through F-13 of this report.

Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets		F-2
Consolidated Statements of Income and Comprehensive Income		F-3
Consolidated Statements of Shareholders' Equity		F-4
Consolidated Statements of Cash Flows		F-5
Notes to Consolidated Financial Statements		F-6 to F-13

(2) Financial Statement Schedule: None.

(3) Exhibits

Exhibit No.		Description

3.1		Articles of Incorporation and Amendments (1)
3.2		Bylaws (1)
10.1		Stock Purchase Agreement (2)
10.2		Agreement to Acquire Marketing and Commission Agreement (3)
14.1		Code of Ethics (4)
31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer *
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer *
32.1		Section 1350 Certification of Chief Executive Officer **
32.2		Section 1350 Certification of Chief Financial Officer **
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

(1) Previously filed as Exhibit 3.1 and 3.2 to Form S-1 filed on June 26, 2008.

(2) Previously filed as Exhibit 10.1 to Form S-1/A filed on August 26, 2008.

(3) Previously filed as Exhibit 10.1 to Form 8K filed on September 10, 2008.

(4) Previously filed as Exhibit 14.1 to Form 10K on July24, 2009

* Filed herein.

** Furnished herewith (in accordance with SEC Release 33-8238, this exhibit is being furnished and not filed).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Zhong Sen International Tea Company

Date: July 23, 2012	By:	/s/ Pin Nie
		PinNie
		Chief Executive Officer
		(Duly Authorized Officer and Principal Executive Officer)

	By:	/s/ Binquan Zhang
		Binquan Zhang
		Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date

/s/ Li Wang	Chairman of the Board of Directors, President and Secretary	July 23, 2012
Wang Li

/s/ Pin Nie	Chief Executive Officer, Chief Operating Officer and Director	July 23, 2012
Pin Nie	(Duly Authorized Officer and Principal Executive Officer)

/s/Binquan Zhang	Chief Financial Officer and Director	July 23, 2012
Binquan Zhang	(Duly Authorized Officer and Principal Financial Officer)

/s/Zhongping Zhou	Independent Director	July 23, 2012
Zhongping Zhou

/s/Jun Zou	Independent Director	July 23, 2012
Jun Zou