UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form 10-Q/A


Amendment
No.1





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





For
the Quarterly Period Ended March 31, 2010





OR





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





For
the transition period
from            to





Commission
File No. 000-52934





ZST
DIGITAL NETWORKS, INC.


(Exact
name of Registrant as specified in its charter)





Delaware
            
            20-8057756(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)




Building
28, Huzhu Road


Zhongyuan
District, Zhengzhou, People’s Republic of China


(ADDRESS
OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)





(86)
371-6771-6850


(COMPANY’S
TELEPHONE NUMBER, INCLUDING AREA CODE)





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x
      No  ̈





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. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filero
            
            Accelerated
      filer oNon-accelerated
      filerx
            
            Smaller
      reporting company o(Do
      not check if a smaller reporting company)





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





The
number of shares outstanding of the registrant’s common stock, par value $0.0001
per share, was 11,650,442 as of May 14, 2010.






1








EXPLANATORY
NOTE




This
Amendment No. 1 (this “Amendment”) on Form 10-Q/A, which amends and restates
items identified below with respect to the Form 10-Q filed by ZST Digital
Networks, Inc. (“we” or the “Company”) with the Securities and Exchange
Commission (the “SEC”) on May 14, 2010 (the “Original Filing”), is being filed
to reflect revisions to Item 4
(Controls and Procedures).  This Amendment contains only the sections
to the Original Filing which are being amended, and those unaffected parts or
exhibits are not included herein.




As a
result of this Amendment, the certifications pursuant to Section 302 and
Section 906 of the Sarbanes-Oxley Act of 2002, filed as exhibits to our
Original Filing have been revised, re-executed and re-filed as of the date of
this Amendment. Except for the foregoing amended and restated information, this
Amendment continues to describe conditions as of the date of the Original
Filing, and the disclosures contained herein have not been updated to reflect
events, results or developments that have occurred after the Original Filing, or
to modify or update those disclosures affected by subsequent events unless
otherwise indicated in this report. Among other things, forward-looking
statements made in the Original Filing have not been revised to reflect events,
results or developments that have occurred or facts that have become known to us
after the date of the Original Filing, and such forward-looking statements
should be read in their historical context. This Amendment should be read in
conjunction with the Company’s filings made with the SEC subsequent to the
Original Filing, including any amendments to those filings.









































































2




ITEM
4.  CONTROLS AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures




We
maintain disclosure controls and procedures, which are designed to ensure that
information required to be disclosed in the reports we file or submit under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer, or CEO,
and Chief Financial Officer, or CFO, as appropriate to allow timely decisions
regarding required disclosure.




Based on
an evaluation carried out as of the end of the period covered by this quarterly
report, under the supervision and with the participation of our management,
including our CEO and CFO, our CEO and CFO have concluded that, as of the end of
such period, our disclosure controls and procedures (as defined in
Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934) were not effective as of March 31, 2010.




A
significant deficiency is a deficiency, or a combination of deficiencies, in
internal control over financial reporting that is less severe than a material
weakness, yet important enough to merit attention by those responsible for
oversight of the company's financial reporting.  Our management has
identified the following significant deficiencies in our internal control over
financial reporting:




·
            We
      have an inadequate number of accounting personnel and, with the exception
      of our CFO, our staff within our finance department and accounting group
      in the PRC do not have adequate expertise in generally accepted accounting
      principals and the securities laws of the United States to ensure proper
      application thereof.  Although our accounting staff is
      professional and experienced in accounting requirements and procedures
      generally accepted in the PRC, management has determined that they require
      additional training and assistance in US GAAP matters;
  and





·
            Our
      internal audit function is deficient due to insufficient qualified
      resources to perform internal audit
functions.





We
believe the following actions we plan to take will be sufficient to remediate
the significant deficiencies described above:




·
            We
      have engaged a third-party internal controls consultant to assist the
      Company to address issues of timeliness and completeness in financial
      reporting when we are preparing SEC
filings;





·
            We
      will implement an initiative to ensure the importance of internal controls
      and compliance with established policies and procedures are fully
      understood throughout our company;





·
            We
      will provide training to our employees to ensure these procedures are
      properly performed; and





·
            We
      will evaluate hiring additional personnel involved in the preparation of
      the financial statements and disclosures with the requisite expertise in
      generally accepted accounting principals to ensure the proper application
      thereof.





Management
believes the actions described above will remediate the significant deficiencies
we have identified and strengthen our internal control over financial reporting.
While these remedial actions have previously been identified, the necessary
operational and personnel weaknesses were not alleviated in fiscal
2009.  Our management intends to substantially complete these
identified remedial actions during fiscal 2010.




If the
result of our remediation of the identified significant deficiencies is not
successful, or if additional significant deficiencies are identified in our
internal control over financial reporting, our management will be unable to
report favorably as to the effectiveness of our internal control over financial
reporting and/or our disclosure controls and procedures, and we could be
required to restate our financial statements, implement expensive and
time-consuming remedial measures and potentially lose investor confidence in the
accuracy and completeness of our financial reports which could have an adverse
effect on our stock price and potentially subject us to litigation. As we
implement remediation measures, we may supplement or modify them as described
above.





Changes
in Internal Control Over Financial Reporting




Based on
the evaluation of our management as required by paragraph (d) of
Rule 13a-15 or 15d-15 of the Exchange Act, there were no changes in our
internal control over financial reporting during the fiscal quarter to which
this report relates that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.












3




ZST
DIGITAL NETWORKS, INC.





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.




ZST
      DIGITAL NETWORKS, INC.Date:
      August 19, 2010
            By:
            /s/
      Zhong BoZhong
      BoChief
      Executive Officer and Chairman of the BoardDate:
      August 19, 2010
            By:
            /s/
      John ChenJohn
      Chen
              Chief
      Financial Officer








































































































4