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EX-32.1 - CERTIFICATION - MUSIC OF YOUR LIFE INCf10q1109ex32i_zhongsen.htm
EX-31.1 - CERTIFICATION - MUSIC OF YOUR LIFE INCf10q1109ex31i_zhongsen.htm
EX-32.2 - CERTIFICATION - MUSIC OF YOUR LIFE INCf10q1109ex32ii_zhongsen.htm
EX-31.2 - CERTIFICATION - MUSIC OF YOUR LIFE INCf10q1109ex31ii_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 November 30, 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 o        No o
 
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 January 7, 2010:  60,000,000 shares of common stock.


 
 

ZHONG SEN INTERNATIONAL TEA COMPANY

FORM 10-Q

November 30, 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
13 
Item 4T.
Controls and Procedures
13
     
PART II— OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
14
Item 1A.
Risk Factors
14
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
14
Item 3.
Defaults Upon Senior Securities
14
Item 4.
Submission of Matters to a Vote of Security Holders
14
Item 5.
Other Information
14
Item 6.
Exhibits and Reports on Form 8-K
14
     
SIGNATURES
15
 
 



Item 1.      Financial Statements 
 
ZHONG SEN INTERNATIONAL TEA COMPANY
 
CONDENSED BALANCE SHEETS
 
(UNAUDITED)
 
         
             
             
   
 
       
ASSETS
 
             
   
November 30, 2009
   
May 31, 2009
 
           
             
             
             
CURRENT ASSETS
           
Cash
  $ 7,010     $ 16,942  
Accounts receivable, related party
    23,671       11,971  
      30,681       28,913  
                 
Marketing agreement
    120,000       120,000  
                 
TOTAL ASSETS
  $ 150,681     $ 148,913  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
CURRENT LIABILITIES
               
Accounts payable
  $ 11,435     $ 5,000  
                 
TOTAL LIABILITIES
    11,435       5,000  
                 
COMMITMENTS AND CONTINGENCIES
               
      .       .  
                 
STOCKHOLDERS’ EQUITY
               
Common stock, $0.001 par value, 100,000,000 shares authorized,  60,000,000 and 60,000,000 shares issued and outstanding
    60,000       60,000  
Additional paid in capital
    630,694       629,694  
Accumulated deficit
    (551,448 )     (545,781 )
Total Stockholders’ Equity
    139,246       143,913  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 150,681     $ 148,913  
 
See Accompanying Notes to the Condensed Unaudited Financial Statements.
 
 
-1-



ZHONG SEN INTERNATIONAL TEA COMPANY
 
CONDENSED STATEMENTS OF OPERATIONS
 
(UNAUDITED)
 
               
               
                         
                         
                         
                         
                         
   
For the three months ended November 30,
   
For the six months ended November 30,
 
   
2009
   
2008
   
2009
   
2008
 
REVENUES:
                       
Marketing revenue, related party
  $ 35,639     $ 2,011     $ 72,486     $ 2,011  
      35,639       2,011       72,486       2,011  
                                 
OPERATING EXPENSES
                               
Officer's compensation
    500       -       1,000       4,500  
Professional fees
    4,304       13,920       14,555       39,859  
Consulting fees
    30,000       30,000       60,000       80,000  
Impairment of marketing agreement
    -       363,000       -       363,000  
General and administrative
    2,548       120       2,598       224  
  Total Operating Expenses
    37,352       407,040       78,153       487,583  
                                 
LOSS FROM OPERATIONS
    (1,713 )     (405,029 )     (5,667 )     (485,572 )
                                 
OTHER EXPENSES
                               
Interest Expense
    -       334       -       334  
                                 
NET LOSS BEFORE PROVISION FOR INCOME TAXES
    (1,713 )     (405,363 )     (5,667 )     (485,906 )
                                 
                                 
PROVISION FOR INCOME TAXES
    -       -       -       -  
                                 
NET LOSS
  $ (1,713 )   $ (405,363 )   $ (5,667 )   $ (485,906 )
                                 
Net loss per share - basic and diluted
  $ (0.00 )   $ (0.01 )   $ (0.00 )   $ (0.01 )
                                 
Weighted average number of shares outstanding during the period - basic and diluted
    60,000,000       59,900,000       60,000,000       32,900,000  
                                 
 
See Accompanying Notes to the Condensed Unaudited Financial Statements.
 
 
-2-

 
 
ZHONG SEN INTERNATIONAL TEA COMPANY
 
CONDENSED STATEMENT OF STOCKHOLDERS EQUITY
 
FOR THE PERIOD ENDING NOVEMBER 30, 2009
 
(UNAUDITED)
 
                   
   
Common Stock
   
Additional Paid-In
   
Accumulated Deficit During
Development
       
   
Shares
   
Amount
   
Capital
   
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
    -               1,000       -       1,000  
                                         
Net Loss for the six months ended November 30, 2009
    -       -       -       (5,667 )     (5,667 )
                                         
Balance November 30, 2009
    60,000,000       60,000       630,694       (551,448 )     139,246  
 
See Accompanying Notes to the Condensed Unaudited Financial Statements.
 
-3-

 

 

ZHONG SEN INTERNATIONAL TEA COMPANY
 
CONDENSED STATEMENTS OF CASH FLOWS
 
(UNAUDITED)
 
             
             
   
For the six months ended November 30,
 
   
2009
   
2008
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (5,667 )   $ (484,906 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
 Imputed compensation
    1,000       4,500  
Common stock issued for services
    -       50,000  
Impairment of marketing agreement
    -       363,000  
Changes in operating assets and liabilities:
               
   Increase in accounts receivable, related party
    (11,700 )     (2,010 )
   Decrease / (increase) in prepaid expenses
    -       20,840  
   Increase in accrued interest
    -       334  
   Increase in accounts payable
    6,435       10,035  
Net Cash Used In Operating Activities
    (9,932 )     (38,207 )
                 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
    -       -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from notes payable - related party
    -       100,000  
                 
                 
NET INCREASE (DECREASE) IN CASH
    (9,932 )     61,793  
                 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    16,942       6,300  
                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 7,010     $ 68,093  
                 
                 
                 
Cash paid for interest
  $ -     $ -  
Cash paid for taxes
  $ -     $ -  
 
See Accompanying Notes to the Condensed Unaudited Financial Statements.
 
-4-



 
ZHONG SEN INTERNATIONAL TEA COMPANY
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
AS OF NOVEMBER 30, 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 and six months ended November 30, 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 FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only 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.
 
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 November 30, 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 November 30, 2009, the Company deems all account receivable collectible.

Concentration of Credit Risk
 
During the three and six months ended November 30, 2009, one customer accounted for 100% of the Company's sales and 100% of accounts receivable as of November 30, 2009.
 
 
-5-



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.

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 these instruments.

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 November 30, 2009 and 2008, there were no common share equivalents outstanding.
 
Recent Accounting Pronouncements:
 
In June 2009, the FASB issued Financial Accounting Standards Codification No. 860 – Transfers and Servicing. FASB ASC No. 860 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. FASB ASC No. 860 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 FASB ASC No. 860 will have on its financial statements.

In June 2009, the FASB issued Financial Accounting Standards Codification No. 810 – Consolidation. FASB ASC No. 810 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 FASB ASC No. 810 will have on its financial statements.
 
In June 2009, the FASB issued Financial Accounting Standards Codification No. 105-GAAP.   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. FASB ASC No. 105 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in FASB ASC No. 105. All other accounting literature not included in the Codification is non authoritative. The Adoption of FASB ASC No. 105 did not have an impact on our financial statements.
 
 
-6-

 
 


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 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 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 its President and its CFO (See Note 6).

During the three and six months ended November 30, 2009 the Company recorded imputed compensation of $500 and $1,000, respectively for the services contributed by its President and its CFO (See Note 6).
 
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 4 and 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 and six months ended  November 30, 2009, the Company recorded an expense of $15,000 and $30,000, respectively.

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 and six months ended  November 30, 2009, the Company recorded an expense of $15,000 and $30,000, respectively.
 
 
-7-


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 4).

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) (See Note 4).

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 and six months ended August 31, 2009 the Company recorded imputed compensation of $500 and $1,000, respectively 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 2). 

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 six months ended November 30, 2009, the Company has an accumulated deficit of $551,448 and used cash in operations of $9,932. 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 January 6, 2010, the date the financial statements were issued.
 
 
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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 November 30, 2009 Compared to the Three Months ended November 30, 2008
 
Total Revenues

We had revenues of $35,639 for the three months ended November 30, 2009 and $2,011 for the three months ended November 30, 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.

Operating Expenses

Operating expenses for three months ended November 30, 2009 were $37,352 as compared to $407,040 for the three months ended November 30, 2008.  During the comparable period ending November 30, 2008, the Company incurred higher costs due to a onetime impairment of a marketing agreement.  In addition, the Company reduced its operating expenses due to a reduction in professional fees compared to the comparable period ending November 30, 2008.

Gain from operations

Losses from operations for the three months ended November 30, 2009 totaled $1,713 compared to a loss of $405,363 for the three months ended November 30, 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 reduction of operating expenses and elimination of nonrecurring charges taken during the same period in 2008 due to the impairment of the marketing agreement.

Net Loss

Net loss was $1,713 for the three months ended November 30, 2009, compared to a net loss of $405,363 for the three months ended November 30, 2008. The reduction 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 reduction of operating expenses and elimination of nonrecurring charges taken during the same period in 2008 due to the impairment of the marketing agreement.
 
Comparison of Results of Operations for the Six Months Ended November 30, 2009 Compared to the Six Months ended November 30, 2008

Total Revenues

We had revenues of $72,486 for the six months ended November 30, 2009 and $2,011 for the six months ended November 30, 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.
 
 
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Operating Expenses

Operating expenses for six months ended November 30, 2009 were $78,153 as compared to $487,583 for the six months ended November 30, 2008.  During the comparable period ending November 30, 2008, the Company incurred higher costs due to a onetime impairment of a marketing agreement.  In addition, the Company reduced its operating expenses due to a reduction in professional fees compared to the comparable period ending November 30, 2008.

Loss from operations

Losses from operations for the six months ended November 30, 2009 totaled $5,667 compared to a loss of $485,572 for the six months ended November 30, 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 reduction of operating expenses and elimination of nonrecurring charges taken during the same period in 2008 due to the impairment of the marketing agreement.

Net Loss

Net loss was $5,667 for the six months ended November 30, 2009, compared to a net loss of $485,906 for the six months ended November 30, 2008. The reduction 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 reduction of operating expenses and elimination of nonrecurring charges taken during the same period in 2008 due to the impairment of the marketing agreement.
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.
 
 
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Subject to the requisite financing, we believe that we can complete the following objectives within the time period specified:
 
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 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 November 30, 2009, the Company has 2 part-time employees.
 
GOING CONCERN CONSIDERATION
 
As reflected in the accompanying financial statements, we have an accumulated deficit of $551,448 and used cash in operations of $9,932 during the six months ended November 30, 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.
 
 
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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 November 30, 2009, we have assets of $150,681 consisting of cash of $7,010, accounts receivable of $23,671 and intangible assets of $120,000 and total liabilities of $11,435 consisting of accounts payable of $11,435 .  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
 
The Company recognizes revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only 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.
 
RECENT ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued Financial Accounting Standards Codification No. 860 – Transfers and Servicing. FASB ASC No. 860 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. FASB ASC No. 860 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 FASB ASC No. 860 will have on its financial statements.

In June 2009, the FASB issued Financial Accounting Standards Codification No. 810 – Consolidation. FASB ASC No. 810 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 FASB ASC No. 810 will have on its financial statements.
 
In June 2009, the FASB issued Financial Accounting Standards Codification No. 105-GAAP.   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. FASB ASC No. 105 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in FASB ASC No. 105. All other accounting literature not included in the Codification is non authoritative. The Adoption of FASB ASC No. 105 did not have an impact on our financial statements.
 
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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.


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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.
 
None
 
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
 

 
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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: January 8, 2010 
By:  
/s/  Li Wang
   
Li Wang
   
Chief Executive Officer
     
 
By:
/s/  Binquan Zhang
   
Binquan Zhang
   
Chief Financial Officer

 
 
 
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