U.
      S.
      Securities and Exchange Commission


Washington,
      D. C. 20549





FORM
      10-QSB





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





For
      the
      quarterly period ended June 30, 2007





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




For
      the
      transition period from _____ to _____





Commission
      File No. 3-52472





SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.


(Name
      of
      Small Business Issuer in its Charter)





Delaware
            58-2258912(State
                or Other Jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer I.D. No.)








238
      Jianxindong Street, Laizhou, Shandong Province, P.R. China


(Address
      of Principal Executive Offices)





Issuer's
      Telephone Number: 86451-8271-3712





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.





YesX                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





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


August
      20, 2007


Common
      Voting Stock: 69,999,401





Transitional
      Small Business Disclosure Format (check
      one):                 Yes      NoX














**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO.,
      LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**CONSOLIDATED
      BALANCE SHEET**




June
                30,2007(unaudited)ASSETSCurrent
                Assets:Cash
                and cash equivalents
            
            $
            13,697Accounts
                receivable, net (Note 4)
            
            
            11,527Inventory
                (Note 5)
            
            
            204,635Other
                receivable
            
            
            37,028Advance
                to suppliers
            
            
            111,602Total
                current assets
            
            
            378,489Property,
                Plant, and Equipment, net (Note 6)
            
            
            1,804,644Land
                use right, net (Note 7)
            
            
            438,727Acquired
                seed patents, net (Note 8)
            
            
            591,436Receivable
                from sale of land use right  (Note 9)
            
            
            313,1621,343,325Total
                Assets
            
            $
            3,526,458LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                Liabilities:Bank
                loans (Note 10)
            
            $
            1,390,200Short-term
                loans
            
            
            104,298Accounts
                payable and accrued expenses
            
            
            462,538Pension
                and employee benefit payable
            
            
            232,827Taxes
                payable
            
            
            119,664Interest
                payable
            
            
            216,739Deferred
                revenue
            
            
            10,384Judgement
                payable (Note 14)
            
            
            201,500Due
                to employees
            
            
            34,945Customer
                security deposit
            
            
            87,470Total
                Current Liabilities
            
            
            2,860,565Minority
                interest
            
            
            346,955Stockholders'
                Equity:Preferred
                stock, $0.001 par value, 5,000,000 shares authorized; none issued
                and
                outstanding as of June 30, 2007
            
            
            -Common
                stock, $0.001 par value, 150,000,000 shares authorized; 67,001,635
                shares
                issued and outstanding as of June 30, 2007
            
            
            67,001Common
                stock to be issued (3,000,000 shares)
            
            
            3,000Additional
                paid-in capital
            
            
            3,144,238Accumulated
                deficiency
            
            
            (2,235,165
            )Deferred
                compensation
            
            
            (725,667
            )Accumulated
                other comprehensive income
            
            
            65,531Stockholders'
                Equity
            
            
            318,938Total
                Liabilities and Stockholders' Equity
            
            $
            3,526,458








**See
      Notes to Financial Statements**








2








**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
      (LOSS)**




For
                the Three Months Ended
              June
                30,
            
            
            For
                the Six Months Ended
              June
                30,2007
            
            
            2006
            
            
            2007
            
            
            2006(unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            (unaudited)RevenuesSale
                of seeds
            
            $
            270,413
            
            
            $
            96,594
            
            
            $
            459,349
            
            
            $
            324,265Total
                revenue
            
            
            270,413
            
            
            
            96,594
            
            
            
            459,349
            
            
            
            324,265Cost
                of good soldCost
                of seeds sold
            
            
            197,250
            
            
            
            120,286
            
            
            
            355,192
            
            
            
            255,143Amortization
                of seed patents
            
            
            33,836
            
            
            
            32,510
            
            
            
            67,314
            
            
            
            64,844Total
                cost of sales
            
            
            231,086
            
            
            
            152,796
            
            
            
            422,506
            
            
            
            319,987Gross
                Profit
            
            
            39,327
            
            
            
            (56,202
            )
            
            
            36,843
            
            
            
            4,278Operating
                ExpensesSelling
                expenses
            
            
            5,101
            
            
            
            8,126
            
            
            
            12,208
            
            
            
            30,192Payroll
            
            
            32,439
            
            
            
            14,490
            
            
            
            41,338
            
            
            
            29,585Pension
                and employee benefit
            
            
            8,266
            
            
            
            8,823
            
            
            
            16,272
            
            
            
            17,783Depreciation
                expenses
            
            
            26,249
            
            
            
            27,875
            
            
            
            51,392
            
            
            
            55,517Amortization
                expenses
            
            
            2,519
            
            
            
            2,420
            
            
            
            5,012
            
            
            
            4,828Stock
                compensation
            
            
            114,333
            
            
            
            -
            
            
            
            114,333
            
            
            
            -Travel
                and entertainment
            
            
            5,805
            
            
            
            2,760
            
            
            
            13,594
            
            
            
            8,626Judgement
                expense (Note 14)
            
            
            201,500
            
            
            
            -
            
            
            
            201,500
            
            
            
            -Other
                general and administrative
            
            
            2,350
            
            
            
            9,293
            
            
            
            38,595
            
            
            
            22,264Total
                Operating Expenses
            
            
            398,562
            
            
            
            73,787
            
            
            
            494,244
            
            
            
            168,795Income
                (Loss) from Operations
            
            
            (359,235
            )
            
            
            (129,989
            )
            
            
            (457,401
            )
            
            
            (164,517
            )Other
                Income (Expenses)Interest
                income
            
            
            3,073
            
            
            
            2,308
            
            
            
            12,111
            
            
            
            4,637Interest
                expenses
            
            
            (46,847
            )
            
            
            (36,635
            )
            
            
            (88,793
            )
            
            
            (72,975
            )Other
                income (expenses)
            
            
            (4,681
            )
            
            
            3,982
            
            
            
            (5,896
            )
            
            
            (2,798
            )Total
                other income (expenses)
            
            
            (48,455
            )
            
            
            (30,345
            )
            
            
            (82,578
            )
            
            
            (71,136
            )(Loss)
                before provision for income tax
            
            
            (407,690
            )
            
            
            (160,334
            )
            
            
            (539,979
            )
            
            
            (235,653
            )Provision
                for Income Tax
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -(Loss)
                before Minority Interest
            
            
            (407,690
            )
            
            
            (160,334
            )
            
            
            (539,979
            )
            
            
            (235,653
            )Minority
                Interest
            
            
            39,732
            
            
            
            64,322
            
            
            
            97,520
            
            
            
            94,450Net
                (Loss)
            
            
            (367,958
            )
            
            
            (96,012
            )
            
            
            (442,459
            )
            
            
            (141,203
            )Other
                Comprehensive Income (Loss)Effects
                of Foreign Currency Conversion
            
            
            8,376
            
            
            
            2,611
            
            
            
            12,905
            
            
            
            8,593Comprehensive
                Income (Loss)
            
            $
            (359,582
            )
            
            $
            (93,401
            )
            
            $
            (429,554
            )
            
            $
            (132,610
            )Basic
                and fully diluted (loss) per share
            
            $
            (0.01
            )
            
            $
            (0.00
            )
            
            $
            (0.01
            )
            
            $
            (0.00
            )Weighted
                average shares outstanding
            
            
            66,999,401
            
            
            
            66,999,401
            
            
            
            66,999,401
            
            
            
            66,999,401








**See
      Notes to Financial Statements.**





3




**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**




For
                the Six Months Ended
              June
                30,2007
            
            
            2006(unaudited)
            
            
            (unaudited)Operating
                ActivitiesNet
                (loss)
            
            $
            (442,459
            )
            
            $
            (141,203
            )Adjustments
                to reconcile net (loss) to net cash provided by operating
                activities:Minority
                interest
            
            
            (97,520
            )
            
            
            (94,450
            )Depreciation
            
            
            51,392
            
            
            
            55,517Amortization
            
            
            72,326
            
            
            
            69,672Stock
                compensation
            
            
            114,333
            
            
            
            -Changes
                in operating assets and liabilities:(Increase)/Decrease
                in accounts receivable
            
            
            191
            
            
            
            23,805(Increase)/Decrease
                in inventory
            
            
            88,077
            
            
            
            64,383(Increase)/Decrease
                in other receivable
            
            
            (7,906
            )
            
            
            94,537(Increase)/Decrease
                in advance to suppliers
            
            
            (3,791
            )
            
            
            (54,185
            )(Increase)/Decrease
                in judgment receivable
            
            
            29,486
            
            
            
            -Increase/(Decrease)
                in accounts payable and accrued expenses
            
            
            15,913
            
            
            
            (123,076
            )Increase/(Decrease)
                in pension and employee benefit payable
            
            
            12,333
            
            
            
            22,886Increase/(Decrease)
                in taxes payable
            
            
            2,693
            
            
            
            (240
            )Increase/(Decrease)
                in interest payable
            
            
            73,680
            
            
            
            61,853Increase/(Decrease)
                in judgment payable
            
            
            201,500
            
            
            
            -Increase/(Decrease)
                in deferred revenue
            
            
            (18,562
            )
            
            
            4,884Increase/(Decrease)
                in customer security deposit
            
            
            472
            
            
            
            86,423Net
                cash provided by operating activities
            
            
            92,158
            
            
            
            70,806Investing
                ActivitiesPurchase
                of fixed assets
            
            
            (86,089
            )
            
            
            (38,309
            )Net
                cash (used) by investing activities
            
            
            (86,089
            )
            
            
            (38,309
            )Financing
                ActivitiesPayback
                of short-term loans
            
            
            (28,808
            )
            
            
            (31,241
            )Loans
                from employees
            
            
            -
            
            
            
            5,587Payback
                of loans from employees
            
            
            (1,618
            )
            
            
            -Net
                cash provided (used) by financing activities
            
            
            (30,426
            )
            
            
            (25,654
            )Increase
                (decrease) in cash
            
            
            (24,357
            )
            
            
            6,843Effects
                of exchange rates on cash
            
            
            35,454
            
            
            
            15,232Cash
                at beginning of period
            
            
            2,600
            
            
            
            11,582Cash
                at end of period
            
            $
            13,697
            
            
            $
            33,657Supplemental
                Disclosures of Cash Flow Information:Cash
                paid (received) during year for:Interest
            
            $
            (18,111
            )
            
            $
            (11,122
            )Income
                taxes
            
            $
            -
            
            
            $
            -








**See
      Notes to Financial Statements.**








4





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**








**NOTE
      1 – BASIS OF PRENSENTATION**





The
      consolidated financial statements of Shandong Zhouyuan Seed and Nursery Co.,
      Ltd. ( the "Company"), included herein were prepared, without audit, pursuant
      to
      rules and regulations of the Securities and Exchange
      Commission.  Because certain information and notes normally included
      in financial statements prepared in accordance with accounting principles
      generally accepted in the United States of America were condensed or omitted
      pursuant to such rules and regulations, these financial statements should be
      read in conjunction with the financial statements and notes thereto included
      in
      the audited financial statements of the Company as included in the Company's
      Form 10-KSB for the year ended December 31, 2006.





**NOTE
      2 – ORGANIZATION AND OPERATIONS**




Shandong
      Zhouyuan Seed and Nursery Co., Ltd. f/k/a Pingchuan Pharmaceuticals, Inc.
      (“Pingchuan”) was organized under the laws of the State of North Carolina on
      July 20, 199. The Company currently engages in the business of development,
      production and distribution of hybrid crop seeds in the People's Republic of
      China ("PRC'), through its whole owned subsidiary, Infolink Pacific Limited
      ("Infolink").




On
      January 30, 2007, Pingchuan issued to Mr. Wang, Zhigang and Ms. You, Li
      55,000,000 shares of its capital stock in exchange for all of the capital stock
      of Infolink.




Infolink
      was incorporated on September 28, 2006 in British Virgin Islands (“BVI”) under
      the BVI Business Companies Act, 2004, for the purpose of seeking and
      consummating a merger or acquisition with a business entity organized as a
      private corporation, partnership, or sole proprietorship as defined by Statement
      of Financial Accounting Standards (SFAS) No. 7.




On
      October 18, 2006, Mr. Li Han Xun and Ms. You Li (collectively the "Trustees"),
      both of whom are citizens of the People's Republic of China ("PRC") and owned
      a
      60% equity ownership interest in Shandong Zhouyuan Seed and Nursery Co., Ltd.
      ("Zhouyuan"), executed Trust and Indemnity Agreements with Infolink, pursuant
      which the Trustees assigned to Infolink all of the beneficial interest in the
      Trustee's equity ownership interest in Zhouyuan.  These arrangements
      have been undertaken solely to satisfy PRC regulations, which prohibits foreign
      companies from owning or operating the business of sale and development of
      crop
      seeds in PRC.




Through
      the agreements described in the preceeding paragraph Infolink is deemed a 60%
      beneficiary resulting in Zhouyuan being deemed a subsidiary of Infolink under
      the requirements of Financial Interpretation 46 (Revised) "Consolidation of
      Variable Interest Entities" issued by the Financial Accounting Standards Board
      ("FASB"). The Agreements provided for effective control of Zhouyuan to be
      transferred to Infolink at October 18, 2006. Infolink did not have any operating
      activity prior to the share exchange with Zhouyuan. The majority shareholders
      of
      Infolink and Zhouyuan were substantially the same.  These transactions
      have been accounted for on a basis similar to a reorganization between entities
      under common control. Accordingly, Infolink's consolidated financial statements
      are prepared by including the consolidated financial statements of Zhouyuan
      through October 18, 2006, and subsequently Infolink's consolidated financial
      statements include the financial statements of Zhouyuan.




Zhouyuan
      was incorporated in Laizhou City, Shandong Province, PRC on October 26,
      2001.  Zhouyuan engages in the business of development, production and
      distribution of hybrid crop seeds in PRC.




Under
      the
      Company Law of PRC, two formerly state owned companies, Laizhou Yongzhou Seed
      Ltd and Laizhou Agriculture Science Research and Development Ltd., were reformed
      and merged into one company named Laizhou Huiyuan Seed Ltd ("Huiyuan") on
      October 26, 2001.  On December 24, 2002, Huiyuan changed its name to
      Shandong Zhouyuan Seed and Nursery Co., Ltd.




Zhouyuan
      owns 80% of Laizhou Tianzhe Seed Research and Development Ltd. ("Tianzhe"),
      which was incorporated in Laozhou City, Shandong Province, PRC on October 24,
      2004 under the Company Law of PRC. Tianzhe engages in the research and
      development of crop seeds.







5





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**







**NOTE
      2 – ORGANIZATION AND OPERATIONS (continued)**




The
      merger of Zhouyuan with Infolink resulted in a capital transaction accounted
      for
      as a reverse merger.  The transaction was treated for accounting
      purposes as a recapitalization of the accounting acquirer (Infolink) and a
      reorganization of the accounting acquiree (Pingchuan). Accordingly, the
      historical financial statements presented prior to the merger are the historical
      financial statements of Infolink, which includes Infolink's wholly-owned
      subsidiary, Zhouyuan.




Infolink,
      Zhouyuan, and Tianzhe are hereafter referred to as the "Company".




**Going
      Concern**




As
      reflected in the accompanying consolidated financial statements, the Company
      has
      an accumulated deficit of $2,235,165 at June 30, 2007 that includes operating
      losses of $322,586 and $442,459 for the year ended December 31, 2006 and the
      six
      months ended June 30, 2007, respectively.  Additionally, the Company
      was in default on bank loans and interest payments, totaling $1,501,979, as
      of
      June 30, 2007.  These factors raise substantial doubt about its
      ability to continue as a going concern.  In view of the matters
      described above, recoverability of a major portion of the recorded asset amounts
      shown in the accompanying consolidated balance sheet is dependent upon continued
      operations of the Company, which in turn is dependent upon the Company's ability
      to raise additional capital, obtain financing and succeed in its future
      operations.  The financial statements do not include any adjustments
      relating to the recoverability and classification of recorded asset amounts
      or
      amounts and classification of liabilities that might be necessary should the
      Company be unable to continue as a going concern




Management
      has taken the following steps to
      revise its operating and financial requirements, which it believes are
      sufficient to provide the Company with the ability to continue as a going
      concern.  The Company is actively pursuing additional funding and a
      potential merger or acquisition candidate and strategic partners, which would
      enhance stockholders' investment.  Management believes that the above
      actions will allow the Company to continue operations through the next fiscal
      year.





**NOTE
      3 – SIGNIFICANT ACCOUNTING POLICIES**





**Basis
      of Presentation**




The
      accompanying consolidated financial statements are prepared in accordance with
      generally accepted accounting principles in the United States of America ("US
      GAAP").  This basis of accounting differs from that used in the
      statutory accounts of the Company, which are prepared in accordance with the
      "Accounting Principles of China" ("PRC GAAP").  Certain accounting
      principles, which are stipulated by US GAAP, are not applicable in the PRC
      GAAP.  The difference between PRC GAAP accounts of the Company and its
      US GAAP financial statements is immaterial.




The
      Company maintains its books and accounting records in PRC currency "Renminbi"
      ("RMB"), which is determined as the functional currency.  Assets and
      liabilities of the Company are translated at the prevailing exchange rate at
      the
      end of the accounting period. Contributed capital accounts are translated using
      the historical rate of exchange when capital is injected. Income statement
      accounts are translated at the average rate of exchange during the accounting
      period Translation adjustments arising from the use of different exchange rates
      from period to period are included in the cumulative translation adjustment
      account in shareholders' equity. Gain and losses resulting from foreign currency
      transactions are included in operations.




Translation
      adjustments resulting from this process are included in accumulated other
      comprehensive income (loss) in the consolidated statement of shareholders’
equity and amounted to $65,531 and $52,626 as of June 30,, 2007 and December
      31,
      2006, respectively. The balance sheet amounts with the exception of equity
      at
      June 30, 2007 were translated at 7.62 RMB to $1.00 USD as compared to 7.80
      RMB
      at December 31, 2006. The equity






6





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      3 – SIGNIFICANT ACCOUNTING POLICIES (continued)**





accounts
      were stated at their historical rate.  The average translation rates
      applied to income statement accounts for the three months ended June 30, 2007
      was 7.72 RMB as compared to 7.96 RMB for the year ended December 31,
      2006.





**Use
      of Estimates**





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 the reporting
      period.  Actual results when ultimately realized could differ from
      those estimates.





**Cash
      and Cash Equivalents**





Cash
      and
      cash equivalents include cash on hand, deposits in banks with maturities of
      three months or less, and all highly liquid investments which are unrestricted
      as to withdrawal or use, and which have original maturities of three months
      or
      less.





**Accounts
      Receivable**





Accounts
      receivable are recorded at the invoiced amount and do not bear
      interest.  The Company extends unsecured credit to its customers in
      the ordinary course of business but mitigates the associated risks by performing
      credit checks and actively pursuing past due accounts. An allowance for doubtful
      accounts is established and determined based on managements' assessment of
      known
      requirements, aging of receivables, payment history, the customer's current
      credit worthiness, and the economic environment.





**Concentrations
      of Credit Risk**





Financial
      instruments that subject the Company to concentrations of credit risk consist
      primarily of cash and cash equivalents. The Company maintains its cash and
      cash
      equivalents with high-quality institutions. Deposits held with banks may exceed
      the amount of insurance provided on such deposits. Generally these deposits
      may
      be redeemed upon demand and therefore bear minimal risk.





**Fair
      Value of Instruments**





The
      carrying value of financial instruments including cash and cash equivalents,
      receivables, accounts payable and accrued expenses, approximates their fair
      value at June 30, 2007 due to the relatively short-term nature of these
      instruments.





**Advance
      to Suppliers**





The
      Company purchases seeds from the suppliers throughout the operating cycle.
      The
      majority of the seeds is purchased from the growers from the end of November
      through the following February.  Pursuant to some purchase contracts,
      the Company may advance certain amount of purchase price to
      growers.

















7





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      3 – SIGNIFICANT ACCOUNTING POLICIES (continued)**





**Inventories**





Inventories
      are stated at the lower of cost or market value. Actual cost is used to value
      raw materials and supplies. Finished goods and work in process are valued at
      First-In-First-Out (FIFO) method.





**Valuation
      of Long-Lived Assets**





The
      Company periodically analyzes its long-lived assets for potential impairment,
      assessing the appropriateness of lives and recoverability of unamortized
      balances through measurement of undiscounted operating cash flows on a basis
      consistent with accounting principles generally accepted in the United States
      of
      America.





**Property,
      Plant and Equipment**





Property,
      plant and equipment are carried at cost.  The cost of repairs and
      maintenance is expensed as incurred; major replacements and improvements are
      capitalized.





When
      assets are retired or disposed of, the cost and accumulated depreciation are
      removed from the accounts, and any resulting gains or losses are included in
      income in the year of disposition.





Depreciation
      is calculated on a straight-line basis over the estimated useful life of the
      assets.  The percentages or depreciable life applied are:





Property
                and plant
            
            30
                yearsMachines
                and equipment
            
            7
                yearsOffice
                equipment
            
            5
                yearsMotor
                vehicles
            
            5
                years





**Land
      Use Right**





All
      land
      belongs to the State in PRC.  Enterprises and individuals can pay the
      State a fee to obtain a right to use a piece of land for commercial purpose
      or
      residential purpose for a period of 50 years or 70 years,
      respectively.  The right of land usage can be sold, purchased, and
      exchange in the market.





The
      Company obtained the right to use a piece of land at which its headquarter
      building is located for a period of 50 years, from December 30, 1998 to December
      30, 2045, and a piece of land at which its packing facilities and warehouse
      are
      located for a period of 50 years from September 10, 2003 to September 10,
      2053.   We amortize the cost of these and usage rights over a
      period of 50 years, using straight-line method with no residual
      value.





**Acquired
      Seed Patents, net**





Acquired
      intangible assets consist primarily of purchased technology rights and are
      stated at cost less accumulated amortization. Amortization is calculated on
      a
      straight-line basis over the estimated useful lives of these assets of an
      average of 10 years and recorded in cost of revenues.

















8





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      3 – SIGNIFICANT ACCOUNTING POLICIES (continued)**





**Short-Term
      Loans**





Short-term
      loans are temporally loans from third parties to finance the Company’s operation
      due to lack of cash resources.  These loans are unsecured,
      non-interest bearing and have no fixed terms of repayment, therefore, deemed
      payable on demand. Cash flows from these activities are classified as cash
      flows
      from financing activates.





**Due
      to Employees**





Due
      to
      employees are temporally short-term loans from our employees to finance the
      Company’s operation due to lack of cash resources.  These loans are
      unsecured, non-interest bearing and have no fixed terms of repayment, therefore,
      deemed payable on demand.  Cash flows from these activities are
      classified as cash flows from financing activates.





**Revenue
      Recognition**





The
      Company derives its revenue primarily from the sale of various branded
      conventional seeds and branded seeds with biotechnology
      traits.  Revenue is recognized when pervasive evidence of an
      arrangement exists, products have been delivered, the price is fixed or
      determinable, collectibility is reasonably assured and the right of return
      has
      expired.  The estimated amounts of revenues billed in excess of
      revenues recognized are recorded as deferred revenues.





**Research
      and Development Costs**





Research
      and development costs relating to the development of new products and processes,
      including significant improvements and refinements to existing products, are
      expensed as incurred.  The Research and development cost was
      immaterial for the Company for the six months ended June 30, 2007 and 2006,
      and
      was included into general and administration expenses.





**Advertising
      Costs**





Advertising
      costs are expensed as incurred and included as part of selling and marketing
      expenses. Advertising expenses were $1,610 and $1,153 for the six months ended
      June 30, 2007 and 2006, respectively.





**Pension
      and Employee Benefits**





Full
      time
      employees of the PRC entities participate in a government mandated
      multi-employer defined contribution plan pursuant to which certain pension
      benefits, medical care, unemployment insurance, employee housing fund and other
      welfare benefits are provided to employees. Chinese labor regulations require
      the Company to accrue for these benefits based on certain percentages of the
      employees' salaries. The total provisions for such employee benefits were
      $16,272 and $17,783 for the six months ended June 30, 2007 and 2006,
      respectively.





**Reverse
      Stock Split**





Effective
      on January 2, 2007, the Company filed with the Secretary of State of the State
      of North Carolina Articles of Amendment to its Articles of
      Incorporation.  The amendment effected a reverse stock split of the
      Company's common stock in the ratio of 1:6.  All share and per share
      information included in these consolidated financial statements have been
      adjusted to reflect this reverse stock split.








9





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      3 – SIGNIFICANT ACCOUNTING POLICIES (continued)**





**Statutory
      Reserves**





Pursuant
      to the laws applicable to the PRC, PRC entities are required to make
      appropriations to three non-distributable reserve funds, the statutory surplus
      reserve, statutory public welfare fund, and discretionary surplus reserve,
      based
      on after-tax net earnings as determined in accordance with the PRC GAAP.
      Appropriation to the statutory surplus reserve should be at least 10% of the
      after-tax net earnings until the reserve is equal to 50% of the Company's
      registered capital.  Appropriation to the statutory public welfare
      fund is 10% of the after-tax net earnings.  The statutory public
      welfare fund is established for the purpose of providing employee facilities
      and
      other collective benefits to the employees and is non-distributable other than
      in liquidation.  No appropriations to the discretionary surplus
      reserve are made at the discretion of the Board of Directors. The statutory
      surplus reserve fund and statutory public welfare fund are included into
      retained earnings in the balance sheet presented.  Since the Company
      has been accumulating deficiency, no such reserve funds have been
      made.





**Income
      Taxes**





The
      Company accounts for income taxes in interim periods as required by Accounting
      Principles Board Opinion No. 28 "Interim Financial Reporting" and as interpreted
      by FASB Interpretation No. 18, "Accounting for Income Taxes in Interim
      Periods".  The Company has determined an estimated annual effect tax
      rate.  The rate will be revised, if necessary, as of the end of each
      successive interim period during the Company's fiscal year to its best current
      estimate.





The
      estimated annual effective tax rate is applied to the year-to-date ordinary
      income (or loss) at the end of the interim period.





**Earnings
      (Loss) Per Share**





The
      Company reports earnings per share in accordance with the provisions of SFAS
      No.
      128, “Earnings Per Share.” SFAS No. 128 requires presentation of basic and
      diluted earnings per share in conjunction with the disclosure of the methodology
      used in computing such earnings per share.  Basic earnings (loss) per
      share is computed by dividing income (loss) 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 potentially dilutive securities for the six
      months ended June 30, 2007 and 2006, respectively.





**NOTE
      4 – ACCOUNTS RECEIVABLE**





Accounts
                receivable consists of the following:
            
            June
                30, 2007(unaudited)Accounts
                receivable
            
            $
            13,103Less:
                Allowance for bad debt
            
            
            (1,576
            )Accounts
                receivable, net
            
            $
            11,527





We
      use
      indirect method to write off accounts receivable. The bad debt expense was
      $0
      and $0 for the six months ended June 30, 2007 and 2006,
      respectively.





10





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      5 – INVENTORIES**





Inventories
                consist of the following:
            
            June
                30, 2007(unaudited)Finished
                goods
            
            $
            99,108Supply
                and packing materials
            
            
            105,527$
            204,635





**NOTE
      6 – PROPERTY AND EQUIPMENT**





The
                following is a summary of property, plant and equipment-at cost,
                less
                depreciation:
            
            June
                30, 2007(unaudited)Property
                and plant
            
            $
            1,829,240Machines
                and equipment
            
            
            184,533Office
                equipment
            
            
            20,215Motor
                vehicles
            
            
            94,2202,128,208Less:
                Accumulated depreciation
            
            
            (362,180
            )1,766,028Add:
                Construction in progress
            
            
            38,616Total
            
            $
            1,804,644





Depreciation
      expense charged to operations was $51,392 and $55,517 for the six months ended
      June 30, 2007 and 2006, respectively.





**NOTE
      7 – LAND USE RIGHT**





The
                following is a summary of land use right, less
                amortization:
            
            June
                30, 2007(unaudited)Land
                use right
            
            $
            474,115Less:
                Amortization
            
            
            (35,388
            )$
            438,727





**NOTE
      8 – ACQUIRED SEED PATENTS**





The
                following is a summary of acquired seed patents, less
                amortization:
            
            June
                30, 2007(unaudited)Acquired
                seed patents
            
            $
            1,364,849Less:
                Amortization
            
            
            (773,413
            )$
            591,436





Amortization
      expense charged to operations was $67,314 and $64,844 for the six months ended
      June 30, 2007 and 2006, respectively.





11





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      9 – RECEIVABLE FROM SALE OF LAND USE RIGHT**





In
      2004,
      the Company sold land use rights to a real estate development company for
      $1,228,858.  The real estate development company owes the Company
      $313,162 as of June 30, 2007. The parties agreed that the real estate
      development company would pay interest annually at 7.488% on $131,151 (RMB
      1,000,000) of the $308,465 and the rest of the balance bears no
      interest.





The
                receivable from sale of land use right consists of the
                following:
            
            June
                30, 2007(unaudited)Balance
                bearing interest at 7.488%
            
            $
            131,151Balance
                bearing no interest
            
            
            182,011$
            313,162





**NOTE
      10 – BANK LOANS**





Bank
      loans consist of the following as of March 31, 2007:





Financial
                Institutions
            
            LoanAmount
            
            Duration
            
            AnnualInterest
                Rate
            
            CollateralAgricultural
                Bank of China
            
            $
            537,719
            
            04/21/04
                - 04/21/05
            
            6.903%
            
            Headquarter
                Building and land usage rightAgricultural
                Bank of China
            
            
            524,604
            
            11/26/04
                - 11/26/05
            
            7.488%
            
            Guaranteed
                by a real estate development companyAgricultural
                Bank of China
            
            
            262,302
            
            01/09/06
                - 01/07/07
            
            7.488%
            
            Usage
                right of the land located in Chenggang StreetAgricultural
                Bank of China
            
            
            65,575
            
            11/26/04
                - 11/26/05
            
            7.488%
            
            Guaranteed
                by a real estate development company$
            1,390,200





The
      Company was in default on these bank loans, totally $1,390,200, as of June
      30,
      2007.  The Company was also in default on bank loan interest payments
      of $216,739 as of June 30, 2007.





In
      2004,
      the Company sold the usage right of a piece of land, which the Company used
      to
      secure its bank loans, to a real estate development company.  The real
      estate company agreed to guarantee these bank loans.





Interest
      expense for these bank loans was $88,793 and $72,975 for the six months ended
      June 30, 2007 and 2006, respectively.





**NOTE
      11 – RELATED PARTY TRANSACTIONS**





Chi
      Ming
      Chan, a member of the Board of Directors of the Parent Corporation, is Chief
      Executive Officer of China World Trade Corporation.  A subsidiary of
      China World Trade Corporation known as World Trade Full Capital (Beijing)
      Investment Consultancy Limited acted as an advisor to Zhouyuan in connection
      with its recent acquisition by Infolink Pacific Limited and in connection with
      the reverse merger of Infolink Pacific Limited into the Parent
      Corporation.  The services were performed pursuant to a contract that
      provides that if World Trade Full Capital assists Zhouyuan in obtaining capital
      in the United States, then Zhouyuan will pay a service fee to World Trade Full
      Capital, consisting of $80,000 plus 500,000 shares of the Parent Corporation’s
      common stock.











12





**SHANDONG
      ZHOUYUAN SEED AND NURSERY CO., LTD.**


**F/K/A
      PINGCHUAN PHARMACEUTICALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      12 – COMMON STOCK**





On
      April
      5,2005, the Company engaged a consultant for a eighteen-month period ended
      October 4, 2008.  The terms of the agreement are for the consultant to
      receive 800,000 shares of common stock valued at $0.28 per share, totaling
      $224,000, which will be amortized over the beneficial period.  The
      consultant assists the Company in establish two distribution centers in the
      Center Region, PRC.





On
      April
      5,2005, the Company engaged another consultant for a twenty-four-month period
      ended April 4, 2009.  The terms of the agreement are for the
      consultant to receive 1,200,000 shares of common stock valued at $0.28 per
      share, totaling $336,000, which will be amortized over the beneficial
      period.  The consultant assists the Company in website design,
      building, maintenance, and hosting.





On
      April
      5,2005, the Company engaged another consultant for a twenty-four-month period
      ended April 4, 2009.  The terms of the agreement are for the
      consultant to receive 1,000,000 shares of common stock valued at $0.28 per
      share, totaling $280,000, which will be amortized over the beneficial
      period.  The consultant assists the Company in establish two
      distribution centers in the Southwest Region, PRC.





Of
      the
      above fees, during the three months ended June 30, 2007, $114,333 was charged
      to
      operating expense and $725,667 to deferred
      compensation.  Additionally, the 3,000,000 shares of common stock were
      issued July 2, 2007.





**NOTE
      13 – COMMITMENTS AND CONTINGENCIES**





The
      Company faces a number of risks and challenges not typically associated with
      companies in North America and Western Europe, since its assets exist solely
      in
      the PRC, and its revenues are derived from its operations
      therein.  The PRC is a developing country with an early stage market
      economic system, overshadowed by the state.  Its political and
      economic systems are very different from the more developed countries and are
      in
      a state of change.  The PRC also faces many social, economic and
      political challenges that may produce major shocks and instabilities and even
      crises, in both its domestic arena and in its relationships with other
      countries, including the United States.  Such shocks, instabilities
      and crises may in turn significantly and negatively affect the Company's
      performance.





**NOTE
      14 – SUBSEQUENT EVENT: LITIGATION**





On
      August
      1, 2006 Greentree Financial Group, Inc. ("Greentree"), a former consultant
      to a
      subsidiary of the Company, filed a breach of contract complaint in the Superior
      Court in Mecklenberg County, North Carolina for non payment of contractual
      obligations for 2004 and 2005.  The claim is for $49,000 in cash and
      $40,000 worth of stock as compensatory damages or $80,000 in liquidated
      damages.  The Company failed to appear to the Court, and the Court
      rendered a judgment, which orders the Company to pay the plaintiff a sum of
      $201,500, with interest thereon at the rate of 8.000% per annum from the date
      of
      Entry of the Judgment until paid; and for the costs of this
      action.  The Company will appeal the decision.














13





**ITEM
      2.  MANAGEMENT DISCUSSION AND ANALYSIS**





***A
      Warning Concerning
      Forward- Looking Statements*****





The
      information in this discussion
      contains forward-looking statements within the meaning of Section 27A of the
      Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
      Act of 1934, as amended.  These forward-looking statements include
      statements regarding our capital needs, business strategy and
      expectations.  Any statements contained herein that are not statements
      of historical facts may be deemed to be forward-looking
      statements.  Readers are cautioned that there are risks and
      uncertainties which may cause actual future results to differ from the results
      anticipated in these forward-looking statements.  Some of the more
      significant risks are set forth below in the section titled “Risk Factors That
      May Affect Future Results.”





These
      factors and other risks, known
      and unanticipated, may cause Zhouyuan’s results to differ significantly from
      those anticipated in this report.  Readers are cautioned not to place
      undue reliance on the forward-looking statements in this report, which reflect
      management's opinions only as of the date hereof. We disclaim any obligation
      to
      publicly update these statements, or disclose any difference between its actual
      results and those reflected in these statements.





**Results
      of Operations**





Our
      lack
      of financial resources has made it difficult for us to establish the broad
      marketing network necessary to achieve widespread distribution of our
      seeds.  But because seeds are a relatively low margin product,
      profitable operations depend on high volume sales.  The result of our
      limited distribution has been that we have realized negative gross profit in
      each of the past two fiscal years.  The revenue from our sales during
      that period exceeded the cost of the seeds by less than 20%, leaving
      insufficient net revenue to offset the amortization of our intellectual
      property.





In
      the
      first six months of 2007 our sales revenue increased by 41.5% from the level
      achieved in the first six months of 2006.  The recent six month
      revenue of $459,349 exceeded our revenue for the entirety of
      2006.  Nevertheless, our revenue from seed sales for the six months
      ended June 30, 2007 exceeded the cost of the seeds by only
      $104,157.  After amortizing the value of our seed patents, we were
      left with a gross margin of only $36,843 for the first half of
      2007.  Clearly, in order to generate sufficient gross margin to
      sustain our operations, we will have to increase our sales
      significantly.





To
      sustain operations, we pared down the only discretionary spending that we had
–
our selling expenses – from $30,192 in the six months ended June 30, 2006 to
      $12,208 in the six months ended June 30, 2007.  This decision was
      necessitated by our lack of revenue, but had the inevitable result of reducing
      our already modest revenue.  The benefits of that contraction were
      more than offset, however, by two events:








14





·
            In
                April 2007 we contracted to issue 3,000,000 shares of common stock
                to
                three consultants, who will assist us in developing our business
                plan.  The market value of those shares will be amortized as
                expense over the duration of the consulting agreements.  As a
                result, we incurred a $114,333 consulting fees expense in the six
                months
                ended June 30, 2007.  The remainder of the value of the shares,
                $725,667, was recorded as “deferred compensation” on our balance sheet,
                and will be amortized in future
                periods.





·
            In
                August a judgment for $201,500 was entered against our parent corporation
                in a North Carolina court.  The judgment was in favor of the
                company that assisted us in becoming a public company in
                2004.  We intend to appeal from the
                judgment.  Nevertheless, we have recorded the entire amount of
                the judgment as an expense in the period ended June 30,
                2007.





The
      net
      result of our inadequate revenue and recent expenses was that we realized a
      net
      loss before minority interest of $539,979 in the six months ended June 30,
      2007,
      compared to a net loss before minority interest of $235,653 in the six months
      ended June 30, 2006.





Our
      statement of operations records an adjustment for “minority
      interest.”  For the first six months of 2007 the minority interest
      adjustment reduced our net loss by $97,520.  This represents the
      reversal of the portion of the loss incurred by our operating subsidiary,
      Zhouyuan, that is attributable to the 40% of Zhouyuan in which the Delaware
      parent corporation has no equity interest.  If Zhouyuan realizes
      income in the future, a proportionate reduction in our consolidated income
      will
      be recorded for the same reason.





Our
      business operates entirely in
      Chinese Renminbi, but we report our results in our SEC filings in U.S.
      Dollars.  The conversion of our accounts from RMB to Dollars results
      in translation adjustments, which are reported as a middle step between net
      income and comprehensive income.  The net income or net loss is added
      to the retained earnings on our balance sheet; while the translation adjustment
      is added to a line item on our balance sheet labeled “accumulated other
      comprehensive income,” since it is more reflective of changes in the relative
      values of U.S. and Chinese currencies than of the success of our
      business.  For the first six months of 2007 we recorded $12,905 in
      unrealized gains on foreign currency translation.





Liquidity
      and Capital
      Resources





At
      June 30, 2007 we had a working
      capital deficit of $2,482,076, representing an increase of $385,843 in our
      deficit since December 31, 2006.  We had only $13,697 in liquid
      assets, and only $11,527 in accounts receivable (net of
      allowance).  At the same time we owed the Agricultural Bank of China
      $1,390,200 plus $216,739 in accrued interest, and had other past-due obligations
      that far exceeded our ability to pay.





We
      remain in default with respect to
      our obligations to the Bank.  Negotiations are ongoing with respect to
      a restructuring of the debt.  At the same time, we cannot sustain
      operations for any significant period of time unless we obtain additional
      capital.  Our efforts to attract capital are hindered, however, by our
      default to the Bank.  The survival of our business, therefore, depends
      on our ability to develop a comprehensive debt relief and financing
      package.  Unfortunately, because our operations have produced only a
      trickle of cash during the past two years, we can only achieve financing if
      we
      convince the investor that an investment in our company can be leveraged into
      a
      significant increase in revenues and cash flows.








15





On
      May
      16, 2007 we entered into an Agreement on Joint Development of Zhouyuan Building
      Project.  The counterparty to the agreement was Jixi Xingcheng Real
      Estate Development Ltd.  The agreement provides that the parties will
      cooperate in the development of the building and underlying land now owned
      by
      Shandong Zhouyuan, with Jixi Xingcheng bearing financial and managerial
      responsibility for the construction project and the sale of the resulting
      units.  The agreement provides that, after completion of the planning
      and design proposals, the parties will mutually determine the allocation of
      profits from the project according to their respective investments in the
      project.  If successful, this project could significantly enhance our
      cash flow.  We cannot determine at this time, however, whether the
      project will be successful.





In
      the
      event that we are unable to achieve a restructuring of our debt, it is likely
      that we will be required to sell our real property.  This will have
      the effect of terminating the development project, eliminating the revenue
      stream that we could obtain by leasing a portion of the property, and would
      necessitate that we ourselves commence payment of lease fees.  This
      would cause a further deterioration of our financial results.





We
      believe that our business plan is
      sound, and that our products are marketable.  With adequate capital,
      we believe that Zhouyuan can be prosperous and profitable.  We have no
      assurance, however, that the necessary capital can be achieved.





***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.  CONTROLS AND PROCEDURES**





*Evaluation
      of Disclosure Controls
      and Procedures*.  Wang Zhigang, our Chief Executive Officer, and
      Zhang Chunman, our Chief Financial Officer, carried out an evaluation of the
      effectiveness of the Company’s disclosure controls and procedures as of June 30,
      2007.  Pursuant to Rule13a-15(e) promulgated by the Securities and
      Exchange Commission pursuant to the Securities Exchange Act of 1934, “disclosure
      controls and procedures” means controls and other procedures that are designed
      to insure that information required to be disclosed by the Company in the
      reports that it files with the Securities and Exchange Commission is recorded,
      processed, summarized and reported within the time limits specified in the
      Commission’s rules.  “Disclosure controls and procedures” include,
      without limitation, controls and procedures designed to insure that information
      the Company is required to disclose in the reports it files with the Commission
      is accumulated and communicated to our Chief Executive Officer and our Chief
      Financial Officer as appropriate to allow timely decisions regarding required
      disclosure.  Based on their evaluation, Messrs. Wang and Zeng
      concluded that the Company’s system of disclosure controls and procedures was
      effective as of June 30, 2007 for the purposes described in this
      paragraph.








16





*Changes
      in Internal
      Controls*.  There was no change in internal controls over
      financial reporting (as defined in Rule 13a-15(f) promulgated under the
      Securities Exchange Act or 1934) identified in connection with the evaluation
      described in the preceding paragraph that occurred during the Company’s second
      fiscal quarter 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*





On
      April 6, 2006 GreenTree Financial
      Group, Inc. commenced an action in the General Court of Justice of the State
      of
      North Carolina (County of Mecklenberg) titled “GreenTree Financial Group, Inc.
      v. Pingchuan Pharmaceuticals, Inc.”  GreenTree Financial Group alleged
      that it performed services under contract for Pingchuan Pharmaceutical, Inc.
      (the predecessor to Shandong Zhouyuan Seed and Nursery Co., Ltd.), and was
      owed
      $118,500 and other relief.  On August 1, 2007 judgment was entered
      against Shandong Zhouyuan in the amount of $201,500.





*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





**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.





SHANDONG
                ZHOUYUAN SEED AND NURSERY CO., LTD.Date:
                August 20, 2007
            By:
            /s/
                Wang ZhigangWang
                Zhigang, Chief Executive OfficerBy:
            /s/
                Zhang ChunmanZhang
                Chunman, Chief Financial Officer


















17