U. S. Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2012
[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

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

For the transition period from _____ to _____

Commission File No. 0-53254

JINZANGHUANG TIBET PHARMACEUTICALS, INC. (Name of Registrant in its Charter)

Delaware	26-2443288
(State of Other Jurisdiction of incorporation or organization)	(I.R.S.) Employer I.D. No.)

Leling Economic Development Zone, Kaiyuan East Blvd., Dezhou, Shandong Province, P.R. China 253600
(Address of Principal Executive Offices)

Issuer's Telephone Number: 86-534-2111-962

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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 [ ]

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 [ ]

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

Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company [X]

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date:

~~May~~November 1713, 2012

Common Voting Stock: 4050,665,063

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDED ~~MARCH~~SEPTEMBER 3130, 2012

TABLE OF CONTENTS

		Page No
Part I	Financial Information
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets – March 31, 2012 and June 30, 2011	2
	Condensed Consolidated Balance Sheets – September 30, 2012 and June 30, 2012	2
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended March 31, 2012 and 2011	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended September 30, 2012 and 2011	3
	Condensed Consolidated Statements of Cash Flows – for the Nine Months Ended March 31, 2012 and 2011	4
	Condensed Consolidated Statements of Cash Flows – for the Three Months Ended September 30, 2012 and 2011	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1113
Item 3	Quantitative and Qualitative Disclosures about Market Risk	1416
Item 4.	Controls and Procedures	1416
Part II	Other Information
Item 1.	Legal Proceedings	1417
Items 1A.	Risk Factors	1517
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1517
Item 3.	Defaults upon Senior Securities	1517
Item 4.	Mine Safety Disclosures	1517
Item 5.	Other Information	1517
Item 6.	Exhibits	1617

JINZANGHUANG TIBET PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
		March 31,			June 30,
	September 30,			June 30,
	2012	~~2012~~		2012	~~2011~~
CURRENT ASSETS:
Cash		$	611,~~863~~305,~~531~~105		$	28,~~176~~584,~~655~~928
Accounts receivable			~~903~~1,220,943			~~482~~899,~~263~~957
Due from related party			266,322			265,102
Prepaid expenses and other current assets			39,943			3,997
Contract deposit			-			135,376
Deferred tax assets			10,974			10,974
Prepaid expenses and other current assets			4,016			24,744
TOTAL CURRENT ASSETS			12,576,965			9,499,856
Deferred tax assets			10,974			91,177
Property and equipment, net of accumulated depreciation			397,631			403,477
TOTAL CURRENT ASSETS			8,048,063			3,175,317
Intangible assets, net of accumulated amortization			187,132			188,612
Property and equipment, net of accumulated depreciation			406,784			409,554
TOTAL ASSETS		$	13,161,728		$	10,091,945
Intangible assets, net of accumulated amortization			190,537			188,739
TOTAL ASSETS		$	8,645,384		$	3,773,610
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Due to related party		$	36,~~630~~843		$	3536,~~910~~630
Accrued expenses and other current liabilities			~~625~~761,~~321~~647			~~526~~595,~~510~~669
TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES			~~661~~798,~~951~~490			~~562~~632,~~420~~299
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value, 300,000,000 shares authorized, 40,665,063 and 40,665,063 shares issued and outstanding at March 31, 2012 and June 30, 2011, respectively			40,665			40,665
Common stock, $0.001 par value, 300,000,000 shares authorized, 50,665,063 and 40,665,063 shares issued and outstanding at September 30, 2012 and June 30, 2012, respectively			50,665			40,665
Additional paid-in capital			12,~~264~~254,427			1,264,427
Retained earnings			69,~~050~~326,~~478~~972			17,~~644~~493,~~015~~615
Accumulated other comprehensive income			~~230~~164,~~261~~949			~~100~~189,~~657~~704
TOTAL STOCKHOLDERS' EQUITY OF THE COMPANY			711,~~585~~797,~~831~~013			38,~~049~~988,~~764~~411
Non-controlling interests			~~397~~566,~~602~~225			~~161~~471,~~426~~235
TOTAL STOCKHOLDERS' EQUITY			712,~~983~~363,~~433~~238			39,~~211~~459,~~190~~646
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	813,~~645~~161,~~384~~728		$	310,~~773~~091,~~610~~945
The accompanying notes are an integral part of these condensed consolidated financial statements.

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

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

JINZANGHUANG TIBET PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

	Three months Ended September 30,
	2012			2011

REVENUE		3,334,334			2,564,583

COST OF REVENUE
Cost		513,708			233,832
Business and sales related tax		186,960			129,312
		700,668			363,144

GROSS PROFIT		2,633,666			2,201,439

COSTS AND EXPENSES
General and administrative expenses		70,659			114,639

OPERATING INCOME		2,563,007			2,086,800

OTHER INCOME		8,597			1,054

INCOME BEFORE INCOME TAX		2,571,604			2,087,854

INCOME TAX		641,954			475,566

NET INCOME		1,929,650			1,612,288

LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		96,293			82,676

NET INCOME ATTRIBUTABLE TO THE COMPANY		1,833,357			1,529,612

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain, net of tax		(26,058	)		71,619

COMPREHENSIVE INCOME		1,807,299			1,601,231

LESS: OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		(1,303	)		4,693

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$	1,808,602		$	1,596,538

Basic and diluted earnings per common share	$	0.04		$	0.04

Weighted average number of shares outstanding		47,295,498			40,665,063

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

		Three Months Ended March 31,				Nine Months Ended March 31,
		2012		2011		2012		2011
REVENUE
Pharmaceutical products	$	-	$	-	$	-	$	26,997
Services		2,712,438		1,329,240		7,936,203		1,881,954
		2,712,438		1,329,240		7,936,203		1,908,951
COST OF SALES
Pharmaceutical products		-		-		-		24,594
Services		442,447		63,436		1,117,628		132,013
Business and sales related tax		152,552		-		430,694		-
		594,999		63,436		1,548,322		156,607
GROSS PROFIT		2,117,439		1,265,804		6,387,881		1,752,344
COSTS AND EXPENSES
General and administrative expenses		128,483		113,489		315,636		212,226
OPERATING INCOME		1,988,956		1,152,315		6,072,245		1,540,118
OTHER INCOME		6,583		-		13,986		-
INCOME BEFORE INCOME TAX		1,995,539		1,152,315		6,086,231		1,540,118
INCOME TAX		578,288		289,451		1,451,583		389,511
NET INCOME		1,417,251		862,864		4,634,648		1,150,607
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		70,813		43,697		228,184		58,134
NET INCOME ATTRIBUTABLE TO THE COMPANY		1,346,438		819,167		4,406,464		1,092,473
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain, net of tax		1,528		21,289		129,604		61,227
COMPREHENSIVE INCOME		1,347,966		840,456		4,536,068		1,153,700
LESS: OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		1,588		3,438		7,992		30,019
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$	1,346,378	$	837,018	$	4,528,076	$	1,123,681
Basic and diluted earnings per common share	$	0.03	$	0.02	$	0.11	$	0.03
Weighted average number of shares outstanding		40,665,063		40,665,063		40,665,063		40,665,063

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

JINZANGHUANG TIBET PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
	NINE MONTHS ENDED MARCH 31,
	THREE MONTHS ENDED SEPTEMBER 30,
	2012		2011
OPERATING ACTIVITIES:
Net income	$	4,634,648	$	1,150,607
Net income attributable to the Company	$	1,833,357	$	1,529,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16,887		14,320
Net income attributable to non-controlling interests		96,293		82,676
Amortization of long-term contract		-		11,415
Depreciation and amortization		5,828		5,740
Deferred tax		81,545		6,080
Changes in operating assets and liabilities:
Accounts receivable		(~~407~~323,~~993~~271)		(~~513~~339,~~867~~584)
Inventory		-		25,005
Prepaid expense		(35,956)		-
Advance to supplier		-		(7,610)
Accrued expenses and other current liabilities		167,696		94,167
Contract deposit		149,262		-
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,743,947		1,372,611
Prepaid expenses and other current assets		-		(43,009)
FINANCING ACTIVITIES:
Accrued expenses and other current liabilities		99,700		334,673
Shares Issued		1,000,000		-
NET CASH PROVIDED BY OPERATING ACTIVITIES		4,574,049		977,614
Proceeds from related party, loan		-		29,460
INVESTING ACTIVITIES:
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,000,000		29,460
Due from related party		7,440		-
EFFECT OF EXCHANGE RATE ON CASH		(23,770)		53,558
Acquisition of property and equipment		-		(3,364)
INCREASE IN CASH		2,720,177		1,455,629
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		7,440		(3,364)
CASH - BEGINNING OF PERIOD		8,584,928		2,176,655
EFFECT OF EXCHANGE RATE ON CASH		105,387		20,498
CASH - END OF PERIOD	$	11,305,105	$	3,632,284
INCREASE IN CASH		4,686,876		994,748
CASH - BEGINNING OF PERIOD		2,176,655		42,184
CASH - END OF PERIOD	$	6,863,531	$	1,036,932
Supplemental disclosures of cash flow information:
Cash paid for income tax	$	1492,~~284,289~~662	$	~~100~~440,~~447~~282

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

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2012 AND 2011

(Unaudited)

1 BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES

Business description

Jinzanghuang Tibet Pharmaceuticals, Inc. (“the Company”) is engaged in providing consulting services to facilitate the distribution of Tibetan pharmaceutical and nutraceutical products in the People’s Republic of China (“PRC”). The Company’s operations are carried out through Beijing Taibodekang Consulting Co., Ltd. (“BTC”) and Leling Jinzanghuang Biotech Co., Ltd. (Leling JZH).

On January 12, 2009 ~~Jinzanghuang~~the ~~Tibet Pharmaceuticals, Inc.~~Company acquired all of the outstanding capital stock of Tibet Medicine, Inc. (“TMI”), a Delaware corporation, in exchange for ~~the issuing of~~ 36,401,462 shares of its common stock issued to the shareholders of TMI, representing 89.6% of the issued and outstanding shares of the Company. TMI was organized under the laws of Delaware on September 4, 2008 and is the 100% owner of the registered capital of BTC. BTC is a Wholly Foreign Owned Entity that was organized under the laws of the People’s Republic of China on December 5, 2008. For accounting purposes, the above transaction was accounted for as a reverse merger. TMI became the surviving entity for accounting purposes, whereas the Company is recognized as the surviving entity for legal purposes.

~~For~~On ~~accounting~~January ~~purposes~~4, 2009, BTC entered into four ten-year agreements (the ~~above~~“Entrusted ~~transaction~~Management Agreements”) with Leling JZH, which was ~~accounted~~incorporated ~~for~~under the laws of PRC as a ~~reverse~~limited ~~merger.~~liability ~~TMI~~company ~~became~~on November 20, 2008, and with the ~~surviving~~registered ~~entity~~equity ~~for~~holders ~~accounting~~of ~~purposes~~Leling JZH. Three of the agreements were amended as of July 24, ~~whereas~~2009. The purpose of these agreements is to transfer to BTC full responsibility for the ~~Company~~management ~~will~~of beLeling ~~recognized~~JZH, as well as 95% of the ~~surviving~~financial benefits that arise from the business of Leling JZH. As a result, BTC now has control over the business of Leling JZH and is considered a variable interest entity. For ~~for~~that ~~legal~~reason, ~~purposes~~the results of operations of Leling JZH have been included with the Company’s condensed consolidated financial statements.

TMI was organized under the laws of Delaware on September 4, 2008 and is the 100% owner of the registered capital of BTC.

BTC is a Wholly Foreign Owned Entity that was organized under the laws of the People’s Republic of China on December 5, 2008. On January 4, 2009, BTC entered into four ten-year agreements (the “Entrusted Management Agreements”) with Leling JZH and its registered equity holders. Three of the agreements were amended as of July 24, 2009. The purpose of these agreements is to transfer to BTC full responsibility for the management of Leling JZH, as well as 95% of the financial benefits that arise from the business of Leling JZH. As a result, BTC now has control over the business of Leling JZH and is considered a variable interest entity. Thus its operations have been included with the Company’s condensed consolidated financial statements.

Leling JZH was incorporated under the laws of PRC as a limited liability company on November 20, 2008.

Basis of presentation

The unaudited ~~condensed~~ consolidated financial statements presented herein include the accounts of Jinzanghuang Tibet Pharmaceuticals, Inc., its wholly owned subsidiary (BTC) and variable interest entity (Leling JZH). All inter-company transactions and balances among the Company and its subsidiaries are eliminated upon consolidation. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2011. In the opinion of management, all adjustments and normal recurring accruals considered necessary for a fair statement of the results for the period have been included. ~~The results of operations for the nine months ended March 31, 2012 may not be indicative of the results that may be expected for the year ending June 30, 2012.~~

The accompanying ~~condensed~~ consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are presented in U.S. Dollars.

Uses of estimates in the preparation of financial statements

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

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2012 AND 2011

(Unaudited)

1 BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES (~~Continued~~CONTINUED)

Variable Interest Entity

Effective January 1, 2009, the Consolidation Topic, ASC 810-10-45-16, revised the accounting treatment for non-controlling minority interests of partially-owned subsidiaries. Non-controlling minority interests represent the allocation of earnings to the VIE owners who are not at risk for the majority of losses of the VIE, which have been accounted for by using the consolidation method of accounting.

The accounts of Leling JZH have been consolidated with the accounts of the Company because Leling JZH is a variable interest entity with respect to Beijing Taibodekang, which is a wholly-owned subsidiary of the Company. Beijing Taibodekang has a contractual obligation to provide management services to Leling JZH, and the management of the operations of Leling JZH is carried out by Company personnel in fulfillment of that obligation. Beijing Taibodekang also has a contractual obligation to reimburse Leling JZH for any losses incurred as a result of the operations of Leling JZG, and the Company’s principal shareholders ~~have~~ caused funds to be contributed to Leling JZG during the years ended June 30, 2010 and 2009 in satisfaction of that obligation. The carrying amount and classification of Leling JZH’s assets and liabilities included in the Condensed Consolidated Balance Sheets are as follows:

	March 31, 2012		June 30, 2011
	September 30, 2012		June 30, 2012
Total current assets	$	713,~~970~~077,~~026~~095	$	39,~~127~~418,~~466~~343
Total assets		812,~~567~~492,~~346~~331		310,~~805~~010,~~962~~432
Total current liabilities		~~619~~1,~~552~~756,402		~~557~~589,~~999~~677
Total liabilities		~~619~~1,~~552~~756,402		~~557~~589,~~999~~677

The amounts shown in the above table as of ~~June~~September 30, ~~2011~~2012 include ~~intercompany~~$1,000,000 ~~payables~~of ~~and~~intercompany ~~receivables~~ payables that have been eliminated in consolidating Leling JZH with the Company. As of March 31, 2012, Leling JZH has settled all its payables and receivables with TMI and Beijing Taibodekang. As of March 31, 2012 and June 30, 2011, $0 and $66,883 were receivable from TMI for expenses paid by Leling JZH. As of March 31, 2012 and June 30, 2011, $0 and $51,675 were payable to Beijing Taibodekang for management fees.

The Consulting Agreement between Leling Jinzanghuang and Beijing Taibodekang requires that, in payment for the consulting services provided by Beijing Taibodekang, Leling Jinzanghuang will pay fees to Beijing Taibodekang equal to:

	·	10,000 RMB per month, plus
	·	95% of the annual gross profit of Leling Jinzanghuang.

The Consulting Agreement also provides, however, that Beijing Taibodekang will reimburse Leling Jinzanghuang for the amount of any net loss incurred by Leling Jinzanghuang during the period when it is managed by Beijing Taibodekang. ~~As of March 31, 2012, the total gross profit of Leling JZH has been consolidated with the Company are $6,198,181 (RMB 39,445,453), which were 95% of the total gross profit of Leling JZH.~~

Revenue recognition

The Company recognizes revenue from provision of services to sauna stores based on units of the sauna store’s product usage, which is the contractual method of determining the right to revenue. The revenue is recognized at 35% or 40% of sauna stores’ revenue from sale of Shandong JZH products. The percentage is depending on the location of the sauna store. Payments are made to the Company directly from the sauna stores a month after the end of the month in which the sales occurred.

Cash

The Company maintains cash with financial institutions in the People’s Republic of China (“PRC”) which are not insured or otherwise protected. Should any of these institutions holding the Company’s cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution.

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2012 AND 2011

(Unaudited)

1 BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES (~~Continued~~CONTINUED)

Accounts Receivable

Accounts receivable represent receivables from customers. Reserves for bad debts are based on a combination of current sales, historical charge-offs and specific accounts identified as high risk. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. Such allowances, if any, would be recorded in the period the impairment is identified. There is no bad debt expense recorded during the three months ended September 30, 2012 or the year ended June 30, 2012. The balance of allowance for bad debts was $0 and $0 ended September 30, 2012 and June 30, 2012, respectively. The accounts receivable balance as of September 30, 2012 is in compliance with the Company’s credit terms.

Property and equipment

Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight line method.

Long-Lived Assets and Other Acquired Intangible Assets

The Company reviews property and equipment and certain identifiable intangibles for impairment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If property and equipment and certain identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value. The Company did not record any impairments during the three months ended September 30, 2012

Income tax

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the Company to use the assets and liability method of accounting for income taxes. Under the assets and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forward. Under this accounting standard, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized.

ASC 740-10, Accounting for Uncertainty in Income Taxes, defines uncertainty in income taxes, and the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

Enterprise income tax

Under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC, income tax is payable by enterprises at a rate of 25% of their taxable income.

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(Unaudited)

1 BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Business Taxes and Sales-related Taxes

Pursuant to the tax law and regulations of PRC, Leling JZH is obligated to pay 5% of revenue for business taxes, and 7% and 4% (5% effective in May, 2011) of the annual business taxes paid as tax on maintaining and building cities and education additional fee, both of which belong to sales-related taxes. Sales-related taxes are recorded when revenue is recognized. For the three months ended September 30, 2012 and 2011, business taxes and sales-related taxes were $186,960 and $129,312, respectively.

Stock-based compensation

The Company records stock-based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expense related to the fair value of its share-based compensation. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method.

Currency translation

Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s financial statements have been translated into the reporting currency, the United States Dollar (“USD”). Assets and liabilities of the Company are translated at the prevailing exchange rate at each reporting period end date. Contributed capital accounts are translated using the historical rate of exchange when capital is injected. Income and expense accounts are translated at the average rate of exchange during the reporting period. Translation adjustments resulting from translation of these condensed consolidated financial statements are reflected as accumulated other comprehensive income in stockholders’ equity.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

Statement of Cash Flows

In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the Company’s condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the condensed consolidated balance sheet.

Fair value of financial instruments

The Company adopted the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(Unaudited)

1 BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments (Continued)

The carrying amounts reported in the consolidated balance sheets for cash, due to related party, and accrued expenses, approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any other assets or liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 820.

Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There are no such additional common shares available for dilution purposes as of ~~March~~September 3130, 2012 and ~~2011~~June 30, 2012.

New Accounting Pronouncements

In ~~May~~December 2011, ~~Accounting~~the ~~Standards~~FASB ~~Update~~issued ASU No.2011-12, deferral of the effective date for Amendments to the presentation of reclassifications of items out of accumulated other comprehensive income in ASU 2011-05. ASU2 2011-12 defers the requirement that companies present reclassification adjustments for each component of accumulated other comprehensive income (“~~ASU~~AOCI”) in both net income and other comprehensive income (“OCI”) on the face of financial statements. All other requirements in ASU No. 2011-0405 ~~was~~are ~~issued.~~not ~~This~~affected ~~update~~by ~~amends~~ASU ~~Topic~~2011-12, ~~820~~including the requirement to ~~achieve~~report ~~common~~comprehensive ~~fair~~income ~~value~~either ~~measurement~~in ~~and~~a ~~disclosure~~single ~~requirement~~continuous financial statement or in UStwo ~~GAAP~~separate ~~and~~but ~~IFRSs~~consecutive financial statements. ~~The~~Public ~~Company’s~~entities ~~management~~should ~~believes~~apply ~~that~~these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this ~~pronouncement~~standard ~~will~~has not ~~have~~had a material ~~effect~~impact on ~~its~~the Company’s consolidated financial position, and results of operations ~~or cash flows~~.

7In July 2012, the FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” This ASU simplifies how entities test indefinite-lived intangible assets for impairment, which improves consistency in impairment testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of indefinite-lived intangible assets is less than their carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in the previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

2 RELATED PARTY TRANSACTIONS

As of September 30, 2012, the Company has an aggregate of $36,843 in “due to related party” for expenses paid by a related party on behalf of the Company. This is unsecured, bears no interest and is due on demand.

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2012 AND 2011

(Unaudited)

~~1 BUSINESS~~3 PROPERTY ~~DESCRIPTION~~ AND ~~SIGNIFICANT~~EQUIPMENT, ~~ACCOUNTING POLICIES (Continued)~~NET

~~New~~Property ~~Accounting~~and ~~Pronouncements~~equipment, ~~(continued)~~net, consists of the following:

In June 2011, FASB issued the ASU 2011-05 “Presentation of Comprehensive Income” to amend ASC Topic 220. This update allows an entity to have the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The Company’s management believes that this pronouncement will not have a material effect on its financial position, results of operations or cash flows.

	September 30, 2012		June 30, 2012
Buildings	$	430,689	$	431,785
Office equipment		17,836		17,881
		448,525		449,666

Less: accumulated depreciation		50,894		46,189

Property, plant and equipment, net	$	397,631	$	403,477

~~2 CONTRACT~~Depreciation ~~DEPOSIT~~expense charged to operations was $4,827 and $4,549 for the three months ended September 30, 2012 and 2011, respectively.

In4 INTANGIBLE ~~August 2009~~ASSETS, Leling JZH entered into a 10 year contract with the Leling BaiCaoYuan Honeysuckle Planting Cooperative. Pursuant to the contract, Leling JZH advanced RMB 1,000,000 ($149,031) to be used by the farmers in the Cooperative to plant honeysuckle on 300 acres of land. As Leling JZH changed its business from distributing Chinese traditional medicines to providing professional service to its customers in October 2010, Leling JZH entered into an oral agreement with Leling BaiCaoYuan to terminate the contract and Leling BaiCaoYuan agreed to refund RMB 1,000,000 ($149,031) back to Leling JZH. As of March 31, 2012, the Company has received the refund of the contract deposit.NET

~~3 RELATED~~Intangible ~~PARTY~~assets, ~~TRANSACTIONS~~net, consists of the following:

Until October 2010 the Company’s business consisted exclusively of the distribution of products manufactured by one supplier, Shandong Jinzanghuang (Tibet) Pharmaceutical Co., Ltd. (“Shandong Jinzanghuang”). Xue Bangyi, who is the Company’s CEO, owns 91% of the registered capital of Shandong Jinzanghuang and also serves as CEO of that entity. The Company entered into a three-year distribution contract with Shandong Jinzanghuang on November 21, 2008, which provides Leling JZH marketing rights. This agreement expired without renewal on November 21, 2011.

	September 30, 2012		June 30, 2012

Land use right	$	200,126	$	200,636
Software		2,996		3,004
		203,122		203,640

Less: accumulated amortization		15,990		15,028

Intangible assets, net	$	187,132	$	188,612

~~Since~~Amortization ~~the~~expense ~~Company~~charged ~~has changed its business from distribution of products manufactured by Shandong Jinzanghuang~~ to ~~providing~~operations ~~training~~was $1,002 and ~~services to sauna stores in October 2010~~$1,359 ~~the~~for ~~Company did not make any payment to Shandong Jinzanghuang after October 2010. The Company has reclassified~~ the ~~total~~three ~~balance~~months ~~outstanding~~ended ofSeptember ~~$266~~30,~~043~~ ~~as of March 31,~~ 2012 ~~from~~and ~~“advance to supplier – related party” to “due from related party”. The outstanding balance is unsecured~~2011, ~~bears no interest and due on demand~~respectively.

AsThe offuture ~~March~~minimum ~~31,~~amortization ~~2012,~~expense ~~the~~charged ~~Company has an aggregate of $36,630 in “due~~ to ~~related~~operations ~~party”~~ for ~~expenses paid by a related party on behalf of~~ the ~~Company. This~~coming isyears ~~unsecured, bears no interest and~~ is ~~due~~as ~~on demand.~~ follows:

Years ending June 30:
2013		3,002
2014		4,003
2015		4,003
2016		4,003
2017		4,003
Remaining operating lease payments		168,126
Total future minimum operating lease payments	$	187,140

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2012 AND 2011

(Unaudited)

4 PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consists of the following:

	March 31, 2012		June 30, 2011
Buildings	$	433,885	$	422,527
Office equipment		14,632		14,248
		448,517		436,775
Less: accumulated depreciation		41,733		27,221
Property, plant and equipment, net	$	406,784	$	409,554

Depreciation expense charged to operations was $13,647 and $8,207 for the nine months ended March 31, 2012 and 2011, respectively.

5 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

	March 31, 2012		June 30, 2011
	September 30, 2012		June 30, 2012
Accrued payroll	$	1617,~~134~~860	$	2616,~~271~~445
Taxes payable		~~561~~714,~~598~~787		~~451~~550,~~076~~028
Accrued expenses		4326,~~279~~964		4324,~~579~~905
Other payables		42,~~310~~306		54,~~584~~292
Accrued expenses and other current liabilities	$	~~625~~761,~~321~~647	$	~~526~~595,~~510~~669

6 ~~COMMITMENTS~~ INCOME ~~AND CONTINGENCIES~~TAX

~~Vulnerability~~Taxes ~~due~~payable toconsisted ~~Operations~~of inthe ~~PRC~~following:

The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than twenty years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRCs political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective.

	September 30, 2012		June 30, 2012
Income tax payable	$	640,766	$	493,394
Property and land taxes payable		7,518		7,538
Business taxes payable		62,230		45,946
City and supplement taxes		4,273		3,150
		714,787		550,028

~~Substantially~~The ~~all~~provision offor ~~the~~income ~~Company’s~~taxes ~~businesses are transacted in RMB, which~~ is ~~not~~summarized ~~freely~~as convertible. The Peoples Bank of China or other banks are authorized to buy and sell foreign currencies at the exchange rates quoted by the Peoples Bank of China. Approval of foreign currency payments by the Peoples Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.follows:

	Three months ended September 30, 2012		The year ended June 30, 2012
Current provision	$	641,954	$	1,866,502
Deferred provision		-		80,203
Total	$	641,954	$	1,946,705

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate:

	Three months ended			The year ended
	September 30, 2012			June 30, 2012
U.S. statutory rates		35	%		35	%
Foreign income not recognized in the U.S.		-35	%		-35	%
PRC statutory rates		25	%		25	%

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2012 AND 2011

(Unaudited)

6 7 COMMITMENTS AND CONTINGENCIES ~~(Continued)~~

(a) Operating lease commitment

The Company leases buildings under non-cancelable operating lease agreements. Based on the current rental lease agreements, the future minimum rental payments required for the coming years are as follows:

Years ending June 30:
2013		378

Remaining operating lease payments		-
Total future minimum operating lease payments	$	378

(b) Vulnerability due to Operations in PRC

Substantially all of the Company’s business is transacted in RMB, which is not freely convertible. The Peoples Bank of China or other banks are authorized to buy and sell foreign currencies at the exchange rates quoted by the Peoples Bank of China. Approval of foreign currency payments by the Peoples Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

Since the Company has its operations in the PRC, all of its revenues will be settled in RMB, not U.S. Dollars. Due to certain restrictions on currency exchanges that exist in the PRC, the Company’s ability to use revenue generated in RMB to pay any dividend payments to its shareholders outside of China may be limited.

In September 2006, PRC changed the laws regarding transfer of equity in PRC companies in exchange for equity in non-PRC companies. Approvals and registrations for such transfers are required and penalties may be imposed if the requirements are not met.12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements: No Assurances Intended

In addition to historical information, this Quarterly Report contains forward-looking statements, which are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. These forward-looking statements represent Management’s belief as to the future of Jinzanghuang Tibet Pharmaceuticals, Inc. Whether those beliefs become reality will depend on many factors that are not under Management’s control. Many risks and uncertainties exist that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section 1A, entitled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2011~~2012. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Accounting for Variable Interest

Jinzanghuang Tibet Pharmaceuticals, Inc. is a holding company whose only asset is an indirect 100% ownership interest in Beijing Taibodekang Management Consulting Co., Ltd. (“Beijing Taibodekang”), a Wholly Foreign Owned Entity organized under the laws of the People’s Republic of China on December 5, 2008. On January 4, 2009, Beijing Taibodekang entered into four agreements with Leling Jinzanghuang Biotech Co. Ltd. (“Leling Jinzanghuang”) and with the equity owners in Leling Jinzanghuang. Three of the agreements were amended as of July 24, 2009. Collectively, the agreements provide Beijing Taibodekang exclusive control over the business of Leling Jinzanghuang. The relationship is one that is generally identified as “entrusted management.”

The accounting effect of the Entrusted Management Agreements between Beijing Taibodekang and Leling Jinzanghuang is to cause the balance sheets and financial results of Leling Jinzanghuang to be consolidated with those of Beijing Taibodekang, with respect to which Leling Jinzanghuang is now a variable interest entity. Since the parties to the Entrusted Management Agreements were both controlled by Xue Bangyi, who is CEO of both Beijing Taibodekang and Leling Jinzanghuang, the financial statements included in this report reflect the consolidation of the results of operations and cash flows of Leling Jinzanghuang since its inception.

Outline of Our Business

~~Jinzanghuang~~Since ~~Tibet~~its ~~Pharmaceuticals~~formation, ~~Inc.~~Leling isJinzanghuang ahas ~~holding~~been ~~company~~involved ~~whose only asset is an indirect 100% ownership interest~~ in ~~Beijing Taibodekang Consulting Co., Ltd. (“Beijing Taibodekang”), a Wholly Foreign Owned Entity organized under~~ the ~~laws~~distribution of ~~the~~Tibetan ~~People’s~~pharmaceutical ~~Republic~~and ofnutraceutical ~~China~~products onmanufactured ~~December~~by 5,Shandong ~~2008. On January 4~~Jinzanghuang, ~~2009,~~the ~~Beijing~~primary ~~Taibodekang~~equity ~~entered~~owner ~~into~~of ~~four~~which ~~agreements~~is ~~with~~Xue ~~Leling Jinzanghuang Biotech Co~~Bangyi. ~~Ltd. (“~~ Leling Jinzanghuang”) ~~and~~served ~~with~~as ~~the~~a ~~equity~~distributor ~~owners in Leling Jinzanghuang. Three~~ of ~~the~~those ~~agreements~~products ~~were~~until ~~amended~~October ~~and~~2010, ~~restated~~when onit ~~July~~suspended ~~24,~~its ~~2009~~distribution operations. Since ~~Collectively,~~October ~~the~~2010 ~~agreements~~Leling ~~provide~~Jinzanghuang ~~Beijing~~has ~~Taibodekang~~been ~~exclusive~~exclusively ~~control~~engaged ~~over~~in ~~the~~providing ~~business~~advisory ofservices ~~Leling~~to ~~Jinzanghuang. The~~sauna ~~relationship~~stores ~~is one~~ that ispurchase ~~generally~~sauna ~~identified~~care asproducts ~~“entrusted~~from ~~management~~Shandong Jinzanghuang.”

~~Since~~On ~~its~~October ~~formation~~8, 2010, Leling Jinzanghuang ~~has~~entered ~~been~~into ~~involved~~an inagency ~~the~~agreement ~~distribution~~with ofShenyang ~~Tibetan~~Jintao ~~pharmaceutical~~Technology ~~and~~Co., ~~nutraceutical~~Ltd. ~~products~~(“Jintao”), ~~manufactured~~pursuant byto ~~Shandong~~which Jintao has introduced 158 sauna stores to Leling Jinzanghuang,. ~~the~~Shandong ~~primary~~Jinzanghuang ~~equity~~sells ~~owner~~its ofTibetan ~~which~~medicine isproducts ~~Xue~~to ~~Bangyi. Until~~the ~~October~~sauna ~~2010~~stores and Leling Jinzanghuang ~~served~~provides astraining aservice ~~distributor~~to ofeach ~~those~~store ~~products. After~~to ~~achieving~~coach ~~modest~~the ~~sales~~store’s ~~($26,673)~~employees in ~~the~~methods ~~first quarter~~ of ~~fiscal~~integrating ~~2011,~~the ~~Leling~~Shandong Jinzanghuang ~~suspended~~products ~~its~~into ~~distribution~~the ~~operations~~sauna ~~in October 2010~~service. ~~Since~~ ~~October 2010~~ Leling Jinzanghuang has ~~been~~paid ~~exclusively~~Jintao ~~engaged~~a infee, ~~providing~~ranging ~~advisory~~from ~~services~~RMB to8,000 ~~sauna~~($1,269) ~~stores~~to ~~that~~RMB ~~purchase~~8,800 ~~sauna~~($1,396) ~~care~~for ~~products~~each ~~from~~store ~~Shandong~~Jintao ~~Jinzanghuang~~has introduced.

On October 8, 2010, Leling Jinzanghuang entered into an agency agreement with Shenyang Jintao Technology Co., Ltd. (“Jintao”), pursuant to which Jintao had introduced 158 sauna stores to Leling Jinzanghuang by the end of calendar year 2011. Shandong Jinzanghuang sells its Tibetan medicine products to the sauna stores and Leling Jinzanghuang provides training service to each store to coach the store’s employees in methods of integrating the Shandong Jinzanghuang products into the sauna service. Leling Jinzanghuang has paid Jintao a fee, ranging from RMB 8,000 ($1,255) to RMB 8,800 ($1,381) for each store Jintao has introduced.

The contract among Leling Jinzanghuang, Shandong Jinzanghuang and the sauna store provides that the store will purchase products, as needed, directly from Shandong Jinzanghuang. In compensation for Leling Jinzanghuang’s advisory services, the sauna store pays Leling Jinzanghuang a fee equal to a percentage of the resale price charged by the sauna store to its customers for the Shandong Jinzanghuang products. The fee is either 35% or 40% of the resale price, depending on the location of the sauna store. At each month end, each store sends a usage record to Leling Jinzanghuang. Leling Jinzanghuang also makes a physical inventory count quarterly to compare remaining inventory with the quantity delivered by Shandong Jinzanghuang.

This new business model provides Leling Jinzanghuang with a revenue stream for which it incurs very little direct cost, as the product manufacture and distribution is entirely the responsibility of Shandong Jinzanghuang. In addition, entry into this new market has not forced us to incur significant start-up costs, as we have used the same employees and same facilities for the sauna market as carried on our prior product distribution activities.

Results of Operations

The following tables present certain consolidated statements of operations information. Financial information is presented for the ~~nine~~three months ended ~~March~~September 3130, 2012 and 2011, respectively.

	For the 9 months ended March 31,
		For the three months ended September 30						Change
							Change
		2012			2011			Amount				%
	2012			2011			Amount				%
Revenue		$	3,334,334		$	2,564,583			769,751				30	%
Revenue			7,936,203			1,908,951			6,027,252				316	%
Cost of goods sold			700,668			363,144			337,524				93	%
Cost of goods sold			1,548,322			156,607			1,391,715				889	%
Gross profit			2,633,666			2,201,439			432,227				20	%
Gross profit			6,387,881			1,752,344			4,635,537				265	%
Operating expenses			70,659			114,639			(43,980	)			(38	%)
Operating expenses			315,636			212,226			103,410				49	%
Operating income/(loss)			2,563,007			2,086,800			476,207				23	%
Operating income			6,072,245			1,540,118			4,532,127				294	%
Net profit/(loss)			1,929,650			1,612,288			317,362				20	%
Income tax			1,451,583			389,511			1,062,072				273	%
Net profit			4,634,648			1,150,607			3,484,041				303	%

Revenues

~~Through~~Our ~~September~~sauna ~~2010,~~store ~~our~~program ~~revenue~~began ~~arose~~in ~~from~~October ~~the~~2010 ~~resale~~with ofa ~~Tibetan~~trial ~~pharmaceutical~~group ~~and~~of ~~health~~50 ~~products~~sauna ~~manufactured~~stores. By byJune ~~Shandong~~30, ~~Jinzanghuang.~~2011, ~~During~~ the ~~first~~end ~~quarter~~ of our 2011 fiscal year, ~~2011~~the weprogram ~~sold~~had ~~health~~grown ~~products~~to ~~for~~150 ~~$26~~stores. Revenue growth increased from quarter to quarter,~~673,~~ ~~and~~roughly ~~obtained~~in aproportion ~~gross~~to ~~profit~~the growth in number of $2stores,~~374~~ onexcept that the ~~sales~~third quarter in 2011 was particularly profitable. This Atoccurred because the ~~end~~Chinese ofSpring Festival, which occurs during that quarter, ~~however,~~affords wemost ~~suspended~~Chinese ~~our~~workers ~~resale~~from ~~operations~~one ~~and~~to ~~initiated~~two weeks of vacation, during which time the sauna ~~store~~stores ~~program~~experienced ~~that~~a ~~now~~sharp ~~provides~~increase ~~our~~in ~~revenue~~business.

~~Our~~Since July 1, 2011 we have added only 46 more sauna ~~store~~stores ~~program~~- ~~began~~eight in ~~October~~the ~~2010~~first ~~with~~quarter aof ~~trial~~fiscal ~~group~~2012 ofand 5038 ~~sauna~~in ~~stores. At~~August 2012 and have retained the ~~end~~original of150. ~~December~~Nevertheless ~~2010~~our werevenue ~~added~~has ~~another~~grown 50consistently ~~stores~~from quarter to ~~our~~quarter. ~~program,~~The ~~and~~increase ~~then~~was ~~added~~primarily ~~another~~caused 50by ata ~~the~~marked ~~end~~increase in per store revenue, which we attribute to growing awareness of ~~March~~our ~~2011~~product line. As a result, during ~~fiscal~~the ~~2011~~three months ended September 30, 2012, our revenue from ~~advisory~~the ~~services~~sauna ~~increased~~stores ~~from~~program ~~quarter~~was to$3,334,334, ~~quarter. The~~an ~~revenue~~increase ~~growth~~of ~~was~~$769,751 ~~roughly~~or ~~proportionate~~30% tofrom $2,564,583 recorded during the ~~growth~~three inmonths ~~number~~ended ofSeptember ~~stores~~30, ~~except~~2011. ~~that~~The ~~the~~increase ~~third~~was ~~quarter~~due in ~~2011~~part ~~was~~to ~~particularly~~the ~~profitable. This~~addition ~~occurred~~of ~~because~~38 stores, although the ~~Chinese~~stores ~~Spring~~joined ~~Festival,~~the ~~which~~program ~~occurs~~only ~~during~~in ~~that~~August ~~quarter,~~2012. ~~affords~~The ~~most~~primary ~~Chinese~~reason ~~workers~~for ~~from~~the ~~one~~increase toin ~~two~~revenue ~~weeks~~was ofthe ~~vacation,~~increase ~~during~~in ~~which~~per ~~time~~store revenue from the ~~sauna~~first ~~stores~~quarter ~~experienced~~of afiscal ~~sharp~~2012 ~~increase~~to inthe ~~business~~first quarter of fiscal 2013.

~~Since~~The ~~March~~following ~~2011~~table weshows ~~have~~the ~~added~~elements ~~only~~that ~~eight more sauna stores, and~~ have ~~retained~~contributed ~~the~~to ~~original 150. Nevertheless our revenue grew sharply in~~ the ~~nine~~growth ~~months ended March 31, 2012 and on a quarter to quarter basis. The increase was primarily caused by a marked increase~~ in ~~per~~our ~~store~~ revenue, ~~which~~since we ~~attribute~~initiated ~~to growing awareness of our product line. As a result, during~~ the ~~nine months ended December 31, 2011, our revenue from the~~ sauna ~~stores~~store program ~~was~~in ~~$7,936,203,~~October ~~an increase of 316% from the nine months ended March 31, 2011~~2010. ~~During the quarter ended March 31, 2012 our revenue was $2,712,438, an increase of 104% from the quarter ended March 31, 2011.~~

The following table shows the elements that have contributed to the growth in our revenue over the past six fiscal quarters.

	Fiscal 2011				Fiscal 2012					Fiscal 2013
		Q2	Q3	Q4		Q1	Q2	Q3	Q4	Q1
Service fees from sauna stores		554,543	1,419,313	1,715,454		2,564,583	2,659,182	2,712,438	2,716,812	3,334,334
Quantity of sauna stores		50	100	150		158	158	158	158	196
Average revenue per store		11,091	14,193	11,436		16,232	16,830	17,167	17,195	17,012

	Fiscal 2011				Fiscal 2012
		Q2	Q3	Q4		Q1	Q2	Q3
Service fees from sauna stores		554,543	1,419,313	1,715,454		2,564,583	2,659,182	2,712,438
Quantity of sauna stores		50	100	150		158	158	158
Average revenue per store		11,091	14,193	11,436		16,232	16,830	17,167

We held our market steady at 158 stores throughout the last fiscal year and only recently expanded modestly because we recognize that the greatest danger to the success of our business plan would be careless growth. We selected sauna stores carefully after March 2011 and added 38 stores this past quarter. With a client base of 196 stores, we are able to analyze the effectiveness of our marketing program, our product offerings, our management controls, and our financial systems, and to rectify shortcomings in any of those areas. We have been careful to assure that demand for our products has never exceeded supply; that our clients can rely on the timely delivery of their orders. Our goal is to optimize the relationship we have with these 196 stores, then use these sauna stores as the foundation on which our business will grow.

Gross profit

The ~~change~~dedication inof our business ~~model~~ to the sauna store program has resulted in ahigh ~~marked improvement in our~~ gross margin. Because we have no cost of goods sold, our cost of sales is primarily direct labor and business taxes. As a result, during the ~~nine~~three months ended ~~March~~September 3130, 2011, we realized a gross margin of 9286% ~~(which included the minor product resale transactions in the first quarter of that fiscal year)~~. Our revenue during the ~~nine~~three months ended ~~March~~September 3130, 2012 yielded a gross margin of 8079%. The primary reason for the quarter-to-quarter reduction in ~~our~~ gross margin ratio iswas ~~that we have committed additional sales personnel to~~ the ~~program~~expense inrelated ~~order~~ to ~~continue~~bringing ~~the~~38 ~~increase~~new instores ~~our~~into ~~per-store sales. In addition, in fiscal year 2012 we are accruing business and sales tax as a quarterly expense, which was $430,694 for~~ the ~~nine months ended March 31, 2012~~program. ~~During fiscal 2011, we did not record business and sales tax until year end, when we recorded an expense of $220,490 for the year ended June 30, 2011.~~

Operating expenses

The Company’s ~~operating~~general and administrative expenses ~~increased~~decreased from $~~212~~114,~~226~~639 for the ~~nine~~three months ended ~~March~~September 3130, 2011 to $~~315~~70,~~636~~659 for the ~~nine~~three months ended ~~March~~September 3130, 2012, ana ~~increase~~decrease of 4938%. ~~For~~Most ~~the quarter ended March 31, 2012, the increase was only 13%, from $113,489 in the third quarter~~ of ~~fiscal~~our ~~2011~~general toand ~~$128,483~~administrative ~~in the third quarter of fiscal 2012. Most of those expenses~~ are office expenses, including wages of our administrative personnel. The fact that we ~~have~~are ~~been~~ able to increase revenue ~~several-fold~~while ~~with~~reducing ~~only a modest increase in~~ our general and administrative expenses reflects the ~~lower~~low costs involved in the sauna service business, where Shandong JZH and our agent provide most of the marketing services.

After deducting the aforesaid operating expenses from our gross profit, the Company recorded $62,~~072~~563,~~245~~007 in operating income for the ~~nine~~three months ended ~~March~~September 3130, 2012. This represented an increase of $4476,~~534~~207,~~191,~~ or ~~294~~23%, compared with the ~~nine~~three months ended ~~March~~September 3130, 2011. ~~For the quarterly periods, operating income increased by 73%, from $1,152,315 in the third quarter of fiscal 2011 to $1,988,956 in the third quarter of fiscal 2012.~~

Net income

Our Chinese operating entity, Leling Jinzanghuang, is subject to tax in China at the statutory rate of 25% of income calculated in accordance with Chinese accounting principles. Accordingly, for the ~~nine~~three months ended ~~March~~September 30, 2012 we accrued an income tax expense of $1641,~~451,583~~954. After deducting that accrual, the Company reported net income of $41,~~634~~929,~~648~~650 for the ~~nine~~three months ended ~~March~~September 3130, 2012. For the ~~nine~~three months ended ~~March~~September 3130, 2011, we accrued an income tax expense of $~~389~~475,~~511~~566 and generated a net income of $1,~~150~~612,~~607~~288. This ~~For~~represented ~~the~~an ~~quarterly~~increase ~~periods,~~in net income ~~increased by 64%, from $862,864 in the third quarter~~ of ~~fiscal 2011 to~~ $1317,~~417,251~~262 inor ~~the third quarter of fiscal 2012~~20%.

The entrusted management agreements assign to Beijing Taibodekang only 95% of the income generated from Leling Jinzanghuang. For that reason, we deducted a “non-controlling interest” of $~~228~~96,~~184~~293 before recognizing net income attributable to the Company on our Consolidated Statements of Operations and Comprehensive Income. After that deduction and taking into account the income and expenses incurred by the parent corporation, our net income attributable to the Company for the ~~nine~~three months ended ~~March~~September 3130, 2012 was $41,~~406~~833,~~464~~357, representing $0.1104 per share. For the ~~nine~~three months ended ~~March~~September 3130, 2011, we deducted a “non-controlling interest” of $5882,~~134~~676 and the net income attributable to the Company was $1,~~092~~529,~~473~~612, representing $0.0304 per share. Our quarterly net income attributable to the Company was $1,346,438 ($0.03 per share) for the three months ended March 31, 2012, and $819,167 ($0.02 per share) for the three months ended March 31, 2011.

Liquidity and Capital Resources

To date, our operations have been funded by contributions to capital by our founders and by the net cash provided by our operations. As a result, at ~~March~~September 3130, 2012 we had no bank debt and only a $36,~~630~~843 obligation to a related party. At the same time, we had $611,~~863~~305,~~531~~105 in cash at ~~March~~September 3130, 2012 as well as net working capital totaling $711,~~386~~778,~~112~~475, an increase of $42,~~773~~910,~~215~~918 since our last fiscal year ended on June 30, ~~2011~~2012. We supplemented our cash reserves on July 31, 2012 by selling ten million shares of our common stock for a total of $1,000,000. So our capital resources are more than sufficient to fund our operations for the coming year as they are currently structured.

During the nine months ended March 31, 2012, our operating activities provided $4,574,049 in net cash, compared to $977,614 in net cash during the nine months ended March 31, 2011, an increase of $3,596,435 or 368%. The net cash provided in the recent period was slightly lower than our net income for these nine months due to the increase in accounts receivable.15

During the three months ended September 30, 2012, our operating activities provided $1,743,947 in net cash, compared to $1,372,611 in net cash during the three months ended September 30, 2011, an increase of $371,336 or 27%. The net cash provided in the recent period was slightly lower than our net income for the three months ended September 30, 2012 due to the $320,986 increase in accounts receivable during the recent quarter. Net cash provided by operating activities in three months ended September 30, 2011 was slightly lower than our net income for the three months ended September 30, 2011 due to an increase in accounts receivable as well.

Over the long term, our expectation is that we will utilize our capital resources as well as any additional investments that we secure in order to expand our presence in the market for Tibetan medicine. At the present time, however, we are able to operate profitably without significant additional investment. Moreover, our observation of the equity markets indicates that we would be unlikely to obtain financing on favorable terms at this time. Accordingly, our near term plan is to continue the program that we initiated during the past year, utilizing the resources available to us.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”). That evaluation disclosed that the Company has material defects in its disclosure controls and procedures. Specifically they determined that there is a lack of expertise in U.S. GAAP among the Company’s management personnel. They also determined that the size of the Company’s accounting staff and low number of supervisory personnel prevented an appropriate segregation of accounting functions. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, such controls and procedures were not effective.

Management will continue to monitor the performance of its disclosure controls and procedures. At present, the nature of our operations minimizes the complexity of our accounting. For that reason, management has no present plan to implement a significant upgrade to its accounting staff. However, as our business grows and the complexity of our accounting operations increases, we will take appropriate action to assure that our disclosure controls and procedures are adequate.

Changes in Internal Controls. The term “internal control over financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated any changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter covered by this report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A Risk Factors

There have been no material changes from the risk factors included in our Annual Report on Form 10-K for the year ended June 30, ~~2011~~2012.

Item 2. Unregistered Sale of Securities and Use of Proceeds

(a) Unregistered sales of equity securities

~~None~~On July 31, 2012 the Company sold 10,000,000 shares of common stock to seven unrelated individuals in a private offering. The purchase price for the shares was $.10 per share, or a total of $1 million. The shares were sold to individuals who are accredited investors and were purchasing for their own accounts. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) and Section 4(5) of the Securities Act.

The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Exchange Act during the ~~3rd~~1st quarter of fiscal ~~2012~~2013.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

Item 6.	Exhibits
31.1	Rule 13a-14(a) Certification – CEO
31.2	Rule 13a-14(a) Certification – CFO
32	Rule 13a-14(b) Certification
101 INS	XBRL Instance Document*
101 SCH	XBRL Schema Document*
101 CAL	XBRL Calculation Linkbase Document*
101 DEF	XBRL Definition Linkbase Document*
101 LAB	XBRL Labels Linkbase Document*
101 PRE	XBRL Presentation Linkbase Document*

31.1	Rule 13a-14(a) Certification – CEO
31.2	Rule 13a-14(a) Certification – CFO
32	Rule 13a-14(b) Certification
101 INS	XBRL Instance Document*
101 SCH	XBRL Schema Document*
101 CAL	XBRL Calculation Linkbase Document*
101 DEF	XBRL Definition Linkbase Document*
101 LAB	XBRL Labels Linkbase Document*
101 PRE	XBRL Presentation Linkbase Document*

* The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

1517

SIGNATURES

Pursuant to the requirements 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.

JINZANGHUANG TIBET PHARMACEUTICALS, INC.

	JINZANGHUANG TIBET PHARMACEUTICALS, INC.

Date: November 13, 2012	By: /s/ Xue Bangyi
	Xue Bangyi, Chief Executive Officer

	By: /s/ Eva Deng
	Eva Deng, Chief Financial Officer, Chief Accounting Officer

Date: May 17, 2012	By: /s/ Xue Bangyi
	Xue Bangyi, Chief Executive Officer
	By: /s/ Eva Deng
	Eva Deng, Chief Financial Officer, Chief Accounting Officer

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