UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549  FORM 10-Q  [X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  For the period ended: March 31, 2009.  [ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Ac of 1934  For the transition period from         to  Commission File Number:   333-52472  SHANDONG ZHOUYUAN SEED AND NURSERY CO., LTD. (Exact name of Small Business Issuer as specified in its charter)  Delaware                                                 58-2258912 --------------------------------                   ---------------------------------- (State or other jurisdiction of                        (IRS Employer Identification No.) incorporation or organization)   1688 ChengGangZhongLu, Laizhou, Shandong Province, China                     N/A (Address of principal executive offices)                             (Postal or Zip Code)  Issuer's telephone number, including area code:  : (86) 535-2257888  Copies to: Andrew Chien SEC Filing Agency 665 Ellsworth Avenue New Haven, CT 06511 (203) 844-0809   Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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[ ]   1    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 [ ](Do not                   all reporting company [x] check if smaller reporting company)    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  [ ]  No  [X]  As of May 18, 2009 the number of shares outstanding of the Registrants common stock was 84,001,200 shares, $.001 par value.                               2    TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q FOR QUARTER ENDED MARCH 31, 2009  Part I  FINANCIAL INFORMATION  Page Item 1. Financial Statements Consolidated Balance Sheets 4 Consolidated Statement of Operations 6 Consolidated Statement of Cash Flows 8 Condensed Notes to Consolidated Financial Statement 10  Item 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operation 25  Item 3. Quantitative And Qualitative Disclosure About Market Risk       26  Item 4T. Controls and Procedures 26  PART II - OTHER INFORMATION  Item 1. Legal Proceedings 27  Item 2. Unregistered Sale of Equity Securities and Use of Proceeds      27  Item 3. Defaults Upon Senior Securities 27  Item 4. Submission of Matters to a Vote of Security Holders 27  Item 5. Other Information 27  Item 6. Exhibits 27               3      Part I  FINANCIAL INFORMATION  Item 1. Financial Statements    SHANDONG ZHOUYUAN SEED AND NURSERY CO., LTD. CONSOLIDATED BALANCE SHEETS FOR THE PERIOD ENDED MARCH 31, 2009 AND DECEMBER 31, 2008  March 31,December 31,20092008(unaudited)ASSETSCurrent Assets:Cash and cash equivalents$450,691$514,139Accounts receivable, net (Note 5)221,478484,627Inventory (Note 6)189,611142,616Other receivable16,01334,629Advance to suppliers214,95532,607Total current assets1,092,7481,208,618Property, Plant, and Equipment, net (Note 7)1,542,0041,557,325Other AssetsLand use right, net (Note 8)234,019235,039Acquired seed patents, net (Note 9)392,719430,184Receivable from sale of land use right348,807348,370Total other assets975,5451,013,593Total Assets$3,610,297$3,779,536LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:  4    Short-term loans$18,67318,650Accounts payable and accrued expenses375,762679,924Pension and employee benefit payable75,87375,677Taxes payable581,796581,066Deferred revenue33,82532,907Due to employees50,36652,092Due to an officer222,57276,804Customer security deposit100,957103,870Total Current Liabilities1,459,8241,620,990Minority interest821,203862,782-Stockholders' Equity:Preferred stock, $0.001 par value, 5,000,000 shares authorized;none issued and outstanding as of December 31, 2008 and 2007-Common stock, $0.001 par value, 150,000,000 shares authorized;84,001,200 shares issued and outstanding as of March 31, 200870,001,200 shares issued and outstanding as of December 31, 200784,00277,002Common stock to be inssued15,75015,750Additional paid-in capital3,356,3163,290,185Accumulated deficiency(2,239,152)(2,117,238)Deferred compensation(10,917)(91,801)Accumulated other comprehensive income123,271121,866Stockholders' Equity1,329,2701,295,764Noncontrolling Interest821,203862,782Total Shareholders' Equity2,150,4732,158,546Total Liabilities and Stockholders' Equity$3,610,297$3,779,536    See Notes To Consolidated Financial Statements      5     SHANDONG ZHOUYUAN SEED AND NURSERY CO., LTD. CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER COMPREFENSIVE INCOME (LOSS) FOR THE THREE MONTHS PERIOD ENDED MARCH 31 OF 2009 AND 2008  Three Months Ended  03/31/200903/31/2008RevenuesSale of seeds$113,025$268,055Total revenue113,025268,055Cost of good soldCost of seeds sold86,396194,217Amortization of plant variety protections38,00036,364Total cost of sales124,396230,581Gross Profit(11,371)37,474Governmental subsidy for one plant variety protection-552,092Operating ExpensesSelling expenses10,18610,270Payroll8,91419,440Pension and employee benefit10,3508,208Depreciation expenses16,57128,426Amortization of land use rights1,3152,708Professional fees9,0244,640Consultant fees77,000114,333Vehicle expenses2,5626,289Travel and entertainment3,6798,762Office expenses11,01712,830Other general and administrative8,9925,165Total Operating Expenses159,610221,071  6    Income (Loss) from Operation(170,981)368,495Other Income (Expenses)Interest income4,8085,006Interest expenses(780)(55,666)Other income (expenses)2,523(3,792)Total other income (expenses)6,551(54,452)Income (Loss) before provisionfor Income Tax(164,430)314,043Provision for Income Tax--Income before Minority Interest(164,430)314,043Minority Interest42,516(171,204)Net Income (loss)(121,914)142,839Basic and fully diluted earnings (loss) per share$(0.00)$0.00Weighted average shares outstanding82,834,53370,001,635   See Notes to Consolidated Statements of Income           7      SHANDONG ZHOUYUAN SEED AND NURSERY CO., LTD. CONSOLIDATED STATEMENT OF CASH FLOW FOR THE THREE MONTHS PERIOD ENDED MARCH 31 OF 2009 AND 2008   For the Three Months EndedMarch 31,20092008(unaudited)(unaudited)Operating ActivitiesNet income (loss)$        (121,914)$         142,839Adjustments to reconcile net income (loss) tonet cash provided (used) by operating activities:Minority interest(42,516)171,204Depreciation16,57128,426Amortization of land use rights and plant variety protections39,31539,072Amortization of costs of common stocks issued for consultant service77,000114,333Common stocks to be issued for compensation of officer and directors3,884-Increase in court judgment payable-4,031Changes in operating assets and liabilities:(Increase)/Decrease in accounts receivable263,720(14,415)(Increase)/Decrease in inventory(46,809)28,141(Increase)/Decrease in other receivable18,6571,707(Increase)/Decrease in advance to suppliers(182,281)37,216(Increase)/Decrease in contract security deposit-(78,540)Increase/(Decrease) in accounts payable and accrued expenses(304,972)(202,645)Increase/(Decrease) in pension and employee benefit payable10111,987Increase/(Decrease) in taxes payable-5,546Increase/(Decrease) in interest payable-(7,256)Increase/(Decrease) in deferred revenue877(10,205)Increase/(Decrease) in customer security deposit(3,043)3,150Net cash provided (used) by operating activities(281,411)274,591  8    Investing ActivitiesPurchase of fixed assets-(741)Net cash (used) by investing activities-(741)Financing ActivitiesPayback of bank loans-(221,175)Short-term loans-32,180Payback of loans from employees(1,791)-Loans from officers145,650-Proceeds from capital contribution73,131-Net cash provided (used) by financing activities216,990(188,995)Increase (decrease) in cash(64,421)84,855Effects of exchange rates on cash973(93,486)Cash at beginning of period514,13911,345Cash at end of period450,6912,714Supplemental Disclosures of Cash Flow Information:Cash paid (received) during year for:Interest(780)(72,681)Income taxes--              9      SHANDONG ZHOUYUAN SEED AND NURSERY CO., LTD. F/K/A PINGCHUAN PHARMACEUTICALS, INC. NOTES TO FINANCIAL STATEMENTS  Note 1.BASIS OF PRESENTATION

The accompanying unaudited financial statements as of March 31, 2009 and for the three months ended March 31, 2009 and 2008 have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. They do not include all of the information and footnotes for complete financial statements as required by GAAP. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2009 and 2008 presented are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Companys audited financial statements and notes thereto for the fiscal year ended December 31, 2008.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, 1996. 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").  The structure of the Company is illustrated as following:   10   [sh1q09002.gif]  11    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 proceeding paragraph Infolink is deemed a 60% beneficiary resulting in Zhouyuan being a subsidiary of Infolink under the requirements of Financial Interpretation 46 (Revised) "Consolidation of Variable Interest Entities" issued by of the Financial Accounting Standards Board ("FASB"). Accordingly, Inforlink consolidated Zhouyuan's financial date prior to acquiring 60% beneficial interest in Zhouyuan and thereafter.  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.  The merger of Pingchuan with Infolink results 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.  On April 2, 2007, the Company changed its name to Shandong Zhouyuan Seed and Nursery Co., Ltd.  Pingchuan, Infolink, Zhouyuan, and Tianzhe are hereafter referred to as the Company.  Going Concern  12     As reflected in the accompanying consolidated financial statements, the Company has a working capital deficiency of $367,076 and $412,373 as of March 31, 2009 and December 31, 2008, respectively; and an accumulated deficit of $2,239,152 and $2,117,238 at March 31, 2009 and December 31, 2008, respectively.  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.  During 2008 the Company executed a debt cancellation agreement whereby in exchange for a building and land use rights the Company extinguished approximately $1,653,000 of bank debt and interest payable.  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 each year end. 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 year. Translation adjustments arising from the use of different exchange rates from period to period are include 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 $123,271 as of March 31, 2009, as compared to $121,866 as of December 31, 2008. The balance sheet amounts with the exception of equity at  13   March 31, 2008 were translated at 6.84 RMB to $1.00 USD as compared to 6.85 RMB at December 31, 2008. The equity accounts were stated at their historical rate.  The average translation rates applied to income statement accounts for the three months ended March 31, 2009 and 2008 were 6.85 RMB and 7.15 RMB, respectively.  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.  Statement of Cash Flows  In accordance with SFAS No.95, "Statement of Cash Flows," cash flows from the Company's operations calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with charges in the corresponding balances on the balance sheet.  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.  Recoveries of balances previously written off are also reflected in this allowance  Concentration 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 Financial Instruments   14   The carrying value of financial instruments including cash and cash equivalents,receivables, accounts payable and accrued expenses, approximates their fair value 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.  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  years Machines and equipment         7  years Office equipment               5  years Motor 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  15   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.  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 activities.  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.  Governmental Subsidy For One Plant Variety Protection  In February 2008, Zhouyuan received governmental subsidy of $552,092 (RMB 3,950,000) for one of its plant variety protections, named H8723, which is a wheat variety and was cultivated by one of Zhouyuan's predecessor, Laizhou Agriculture Science Research and Development Ltd.  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 years ended December 31, 2008 and 2007, respectively, and was included into general and administration expenses.  Advertising Costs  16   Advertising costs are expensed as incurred and included as part of selling and marketing expenses. Advertising expenses were $279 and $3,166 for the three months ended March 31, 2009 and 2008, 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 $8,717 and $8,208 for the three months ended March 31, 2008 and 2007, respectively.  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 are 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  17   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 three months ended March 31, 2009 and 2008, respectively.  Comprehensive Income  Statement of Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying statement of changes in shareholders' equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.  Segment Reporting  SFAS No. 131 Disclosures about Segments of an Enterprise and Related Information establishes standards for reporting information about operating segments on a basis consistent with the Companys internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. The Company currently plans on operating in one principal business segment. Therefore, segment disclosure is not presented.  Related Parties  For the purposes of these financial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.  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 affected a reverse stock split of the Company's common stock in the ratio of 1:6. The number of common stocks issued and outstanding immediately after the reverse stock split was 12,001,635, including an addition of 2,234 shares for rounding up fractional shares. All share and per share information included in these consolidated financial statements have been adjusted to reflect this reverse stock split.   Recent Accounting Pronouncements  In April 2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. This FSP requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. If fair value cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with SFAS No. 5, Accounting for Contingencies and  18   FASB Interpretation No. 14, Reasonable Estimation of the Amount of a Loss. Further, the FASB removed the subsequent accounting guidance for assets and liabilities arising from contingencies from SFAS No. 141(R). The requirements of this FSP carry forward without significant revision the guidance on contingencies of SFAS No. 141, Business Combinations, which was superseded by SFAS No. 141(R). The FSP also eliminates the requirement to disclose an estimate of the range of possible outcomes of recognized contingencies at the acquisition date. For unrecognized contingencies, the FASB requires that entities include only the disclosures required by SFAS No. 5. This FSP was adopted effective January 1, 2009. There was no impact upon adoption, and its effects on future periods will depend on the nature and significance of business combinations subject to this statement.  In April 2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) Financial Accounting Standard (FAS) 157-4 Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. Based on the guidance, if an entity determines that the level of activity for an asset or liability has significantly decreased and that a transaction is not orderly, further analysis of transactions or quoted prices is needed, and a significant adjustment to the transaction or quoted prices may be necessary to estimate fair value in accordance with Statement of Financial Accounting Standards (SFAS) No. 157 Fair Value Measurements. This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The Company will adopt this FSP for its quarter ending June 30, 2009.  The Management does not expect that the adoption of this FSP would have a material effect on the Companys financial position and results of operations.  In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2 Recognition and Presentation of Other-Than-Temporary Impairments. The guidance applies to investments in debt securities for which other-than-temporary impairments may be recorded. If an entitys management asserts that it does not have the intent to sell a debt security and it is more likely than not that it will not have to sell the security before recovery of its cost basis, then an entity may separate other-than-temporary impairments into two components: 1) the amount related to credit losses (recorded in earnings), and 2) all other amounts (recorded in other comprehensive income). This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The Company will adopt this FSP for its quarter ending June 30, 2009.  The Management does not expect that the adoption of this FSP would have a material effect on the Companys financial position and results of operations.  .
Note 4. ACCOUNTS RECEIVABLE  19     Account Receivable

March 31,      December 31
2009             2008
(unaudited)

Accounts receivable       $ 511,823         $ 708,577
less, Allowance for Bad debt        290,345           223,930
Accounts receivable, net          221,478           484,627  We use indirect method to write off accounts receivable. The bad debt expenses were $0 and $0 for the years ended March 31, 2009 and December 31, 2008 respectively.


Note 5. INVENTORIES

Inventories consist of followings:
March 31,      December 31
2009             2008
(unaudited)


Finished goods              $ 140,699         $ 99,538
Supply and Packing Materials        48,912            43,078
Total:              189,611           142,616



Note 6- PROPERTY AND EQUIPMENTThe following is a summary of property, plant and equipment-at cost, less accumulated depreciation:   March 31,December 31,20092008(unaudited)Property and plant1,709,343$1,707,671Machines and equipment203,054202,797Office equipment20,69120,665  20    Motor vehicles104,944104,812Total2,038,0322,035,945Less: Accumulated depreciation(496,028)(478,620)Total1,542,004$1,557,325   Depreciation expense charged to operations was $16,571 and $28,426 for the three months ended March 31,   Note 7 - LAND USE RIGHT  The following is a summary of land use right, less amortization:March 31,December 31,20092008(unaudited)Land use right$ 262,943$   262,613less: Amortization(28,924)(27,574)Accounts  receivable, net$  234,019$235,039  Amortization expense charged to operations was $1,315 and $2,708 for the three months ended March 31, 2009 and 2008, respectively. Note 8- ACQUIRED PLANT VARIETY PROTECTIONS  The following is a summary of acquired seed patents, less amortization:  March 31,December 31,20092008(unaudited)Acquired plant variety protections$1,520,202$1,518,295less: Amortization(1,127,483)(1,088,111)  21    Accounts  receivable, net392,719430,184 Amortization expense charged to operations was $ 38,000 and $ 36,364 for the three months ended March 31, 2009 and 2008, respectively.  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 $309,025 as of December 31, 2004. The parties agreed that the real estate development company would pay interest annually at 7.488% on $126,817 (RMB 1,000,000) of the $309,025 and the rest of the balance bears no interest.  The receivable from sale of land use right consists of the following:  March 31,December 31,20092008(unaudited)Balance bearing interest at 7.488%$146,079$145,896Balance bearing no interest202,728202,474348,807348,370  Note 10. DUE TO OFFICERS  Due to officers consists of following:   March 31,December 31,20092008(unaudited)Due to Mr. Zhigang Wang, CEO$73,770$76,804Due to Ms. Yuqun Liu, CFO148,802-Accounts  receivable, net222,57276,804   Due to Mr. Zhigang Wang, CEO Due to Mr. Zhigang Wang, CEO, is temporally short-term loans from our CEO to finance the Companys operation due to lack of cash resources.  These loans are unsecured, non-interest bearing and have no fixed  22   terms of repayment, therefore, deemed payable on demand.  Cash flows from these activities are classified as cash flows from financing activates.  Due to Ms. Yuqun Liu, CFO In January 2009, Ms. Liu, Yiqun, CFO of the Company, lent $148,700 to the Company to finance its operation. The loan is for the period January 1, 2009 through May 30, 2009, secured by the Company's seed inventory, and the monthly interest is $1,022.  Note 11. COMMON STOCK  In January 2009, the Company issued 7,000,000 shares of common stock to two individuals for $73,131 (RMB 500,000).   Note 12. STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME  For the Three Months EndedMarch 31,20092008(unaudited)(unaudited)Net income$(164,430)$314,043Other comprehensive income, net of tax:Effects of foreign currency conversion2,34243,810Total other comprehensive, not of tax2,34243,810Comprehensive income(162,088)357,853Comprehensive income attributable tothe noncontrolling interest(41,579)192,286Comprehensive income attributable toChina Ruitai International Holdings Co., Ltd.$(120,509)$165,567      Note 13. SEGMENT REPSRTING  Major Products   23   The major products consist of following: For Three Months Ended 03/31/2009                    03/31/2008  Kind of theNamePercentage ofPercentage ofSeedof the SeedAmountTotal RevenueAmountTotal RevenueRevenue1Corn seedLudan 981$38,60734.16%$71,02726.50%2Corn seedzhouyu No.137,27232.98%--3Corn seedYedan No.2317,52715.51%--4Corn seedHuiyuan No. 2011,2199.93%54,50920.33%5Corn seedNongda 1088,4007.43%43,05716.06%6Corn seedOthers--99,46237.10%Total$113,025100%$268,056100%Costs of Sales1Corn seedLudan 981$45,71936.75%$97,33642.21%2Corn seedzhouyu No.131,61825.42%--3Corn seedYedan No.2317,94614.43%--4Corn seedHuiyuan No. 2011,2349.03%24,03910.43%5Corn seedNongda 10817,88014.37%40,48817.56%6Corn seedOthers--68,71829.80%Total$124,397100%$230,580100%Gross Profit1Corn seedLudan 981$(7,112)62.54%$(26,309)-70.21%2Corn seedzhouyu No.15,654-49.72%-0.00%3Corn seedYedan No.23(419)3.68%-0.00%4Corn seedHuiyuan No. 20(15)0.13%30,47081.31%  24    5Corn seedNongda 108(9,480)83.36%2,5696.86%6Corn seedOthers--30,74482.04%Total$(11,372)100%$37,474100%      Major Suppliers:  The Company has a diversified customer base. There were three major suppliers who supplied sale approximately 5% or more of the Company's total sales in this quarter as summarized in the following:   MajorPercentage ofPercentage ofSuppliersRevenueTotal RevenueRevenueTotal RevenueGansu  Province Jinxibei  Seed Co., Ltd.$60,46850.25%$--Mr. Ren, Hongzhang-Zuocun Zhuwang Town, Laizhou City17,99214.95%--Mr. Liu, Penghui-Shahe luwang Town, Laizhou City7,5296.26%28,70020.98%Total$85,98971.45%$28,70020.98%    Note 14.  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.   ___________________________________________________________________________________________________________  Item 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operation:   25   The revenue in the first three-month of 2009 was $113,025, reduced from $268,055 of the same period of last year. In seed industry, the business has seasonality. Winter is the business slow season. The revenue reduction in the first quarter of 2009 was due to that we shipped more seeds to wholesale agencies in the fourth quarter of 2008.  The total costs of sale were $124,396 compared with $230,581 of the same period of last year. The operation loss was ($164,430) compared with profits of $142,839 of the same period of last year. The comprehensive loss was ($120,509) compared with profits of $165,568 of the same period of last year.  The average loss per share was $0 compared with profits $0 per share of the same period of last year.  Liquidity and Capital Resources  On March 31, 2009, the company had cash and cash equivalent of $ 450,691 compared with $514,139 on March 31, 2008. The account receivable was $221,478 on March 31, compared with $ 484,627 on March 31, 2008. The advance to suppliers was $214,955, greatly increased from $32,607 of the same period of last year. The increase of the advance to suppliers was due to that the managers wanted to guarantee the seed suppliers for the rest of the year.  In first quarter, one manager made loan of $145,650 to the company, and the Company also received proceeds of $73,131 for a privately stock offering to Chinese investors.  Although, the Company has a working capital deficiency of 267,076 and $412,373 as of March 31, 2009 and December 31, 2008 respectively, the managers believe that it will meet its capital requirement in the rest of the year through generating income from operation and financial activities.  Item 3. Quantitative And Qualitative Disclosure About Market Risk  Not Applicable  Item 4T. Controls and Procedures  Evaluation of Disclosure Controls:  We evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15a-15(e) under the Securities Exchange Act of 1934, as amended, and internal control over financial reporting. This evaluation was conducted with the participation of our chief executive officer and chief financial officer.  Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.  Conclusions:   26   Based upon their evaluation of our controls, the chief executive officer and principal financial officer have concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no changes in our internal controls over financial reporting occurred   during the fiscal year covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.  It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals. Notwithstanding this caution, the CEO and CFO have reasonable assurance that the disclosure controls and procedures were effective as of March 31, 2009.     PART II - OTHER INFORMATION  Item 1. Legal Proceedings   From time to time we may be named as a party to various litigation proceedings arising in the ordinary course of our business, such as contractual rights and obligations, employment matters etc., none of which, in the opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.  Item 2. Unregistered Sale of Equity Securities and Use of Proceeds  On January 12, 2009, the Company entered into Stock Transfer Agreements (the Agreements) with Jian Zhou, the Companys director and Jing Luo, an individual residing in the Peoples Republic of China (together, the Investors) to sell in a private placement to the Investors an aggregate of 7,000,000 shares (the Shares) of the Companys common stock, par value $0.001 per share (the Common Stock). Pursuant to the Agreements, Jing Luo agreed to purchase 1,000,000 shares of Common Stock at a per share purchase price of CNY0.10 (approximately US$0.015) per share, for an aggregate purchase price of CNY100,000 (approximately US$14,700), and Jian Zhou agreed to purchase 6,000,000 shares of Common Stock at a per share Purchase Price of CNY0.06 (approximately US$0.009) for an aggregate purchase price of CNY400,000 (approximately US$58,800). The Company issued 7,000,000 restricted shares in the first quarter of 2009.  Item 3. Defaults Upon Senior Securities  None  Item 4. Submission of Matters to a Vote of Security Holders  None  Item 5. Other Information  None  Item 6. Exhibits    27   31 - Certification of Chief Executive Officer and Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32 - Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  Signature: Pursuant to the requirements of the Securities Exchange Act of 1934, 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  Dated: May 19, 2009                By: /s/ Zhigang Wang  ------------------------  Zhigang Wang, CEO    May 19, 2009 /s/Yiqun Liu Yiqun Liu, CFO     28