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 March 31, 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.
 
 Yes X No
        ___
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act)    Yes ___  No X
 
 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:
 May
        18,
        2007
 Common
        Voting Stock: 66,999,401
 
 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**
 
 March
                  31,2007(unaudited)ASSETSCurrent
                  Assets:Cash
                  and cash equivalents
              
              $
              6,968Accounts
                  receivable, net (Note 4)
              
              
              15,783Inventory
                  (Note 5)
              
              
              263,070Other
                  receivable
              
              
              32,585Advance
                  to suppliers
              
              
              109,928Total
                  current assets
              
              
              428,334Property,
                  Plant, and Equipment, net (Note 6)
              
              
              1,766,038Land
                  use right, net (Note 7)
              
              
              434,649Acquired
                  seed patents, net (Note 8)
              
              
              616,172Receivable
                  from sale of land use right
              
              
              308,4651,359,286Total
                  Assets
              
              $
              3,553,658LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  Liabilities:Bank
                  loans (Note 9)
              
              $
              1,369,350Short-term
                  loans
              
              
              238,506Accounts
                  payable and accrued expenses
              
              
              354,736Pension
                  and employee benefit payable
              
              
              222,246Taxes
                  payable
              
              
              117,870Interest
                  payable
              
              
              177,819Deferred
                  revenue
              
              
              10,167Due
                  to employees
              
              
              35,745Customer
                  security deposit
              
              
              86,912Total
                  Current Liabilities
              
              
              2,613,351Minority
                  interest
              
              
              376,120Stockholders'
                  Equity:Preferred
                  stock, $0.001 par value, 5,000,000 shares authorized; none issued
                  and
                  outstanding as of March 31, 2007
              
              
              -Common
                  stock, $0.001 par value, 150,000,000 shares authorized; 11,999,401
                  shares
                  issued and outstanding as of March 31, 2007
              
              
              11,999Additional
                  paid-in capital
              
              
              2,362,240Accumulated
                  deficiency
              
              
              (1,867,207
              )Accumulated
                  other comprehensive income
              
              
              57,155Stockholders'
                  Equity
              
              
              564,187Total
                  Liabilities and Stockholders' Equity
              
              $
              3,553,658
 
 **See
        Notes to Financial Statements.**
  1
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
        (LOSS)**
 
 March
                  31,2007
              
              2006(unaudited)
              
              (unaudited)RevenuesSale
                  of seeds
              
              $
              188,936
              
              $
              227,671Total
                  revenue
              
              
              188,936
              
              
              227,671Cost
                  of good soldCost
                  of seeds sold
              
              
              157,942
              
              
              134,857Amortization
                  of seed patents
              
              
              33,478
              
              
              32,334Total
                  cost of sales
              
              
              191,420
              
              
              167,191Gross
                  Profit
              
              
              (2,484
              )
              
              60,480Operating
                  ExpensesSelling
                  expenses
              
              
              7,107
              
              
              22,066Payroll
              
              
              8,899
              
              
              15,095Pension
                  and employee benefit
              
              
              8,006
              
              
              8,960Depreciation
                  expenses
              
              
              25,143
              
              
              27,642Amortization
                  expenses
              
              
              2,493
              
              
              2,408Bad
                  debt expenses
              
              
              -
              
              
              -Travel
                  and entertainment
              
              
              7,789
              
              
              5,866Other
                  general and administrative
              
              
              36,245
              
              
              12,971Total
                  Operating Expenses
              
              
              95,682
              
              
              95,008Income
                  (Loss) from Operation
              
              
              (98,166
              )
              
              (34,528
              )Other
                  Income (Expenses)Interest
                  income
              
              
              9,038
              
              
              2,329Interest
                  expenses
              
              
              (41,946
              )
              
              (36,340
              )Other
                  income (expenses)
              
              
              (1,215
              )
              
              (6,780
              )Total
                  other income (expenses)
              
              
              (34,123
              )
              
              (40,791
              )Income
                  (Loss) before provision for income tax
              
              
              (132,289
              )
              
              (75,319
              )Provision
                  for Income Tax
              
              
              -
              
              
              -Income
                  before Minority Interest
              
              
              (132,289
              )
              
              (75,319
              )Minority
                  Interest
              
              
              57,788
              
              
              30,128Net
                  Income
              
              
              (74,501
              )
              
              (45,191
              )Other
                  Comprehensive Income (Loss)Effects
                  of Foreign Currency Conversion
              
              
              4,529
              
              
              5,982Comprehensive
                  Income (Loss)
              
              $
              (69,972
              )
              $
              (39,209
              )Basic
                  and fully diluted earnings (loss) per share
              
              $
              (0.01
              )
              $
              (0.00
              )Weighted
                  average shares outstanding
              
              
              11,999,401
              
              
              11,999,401
 
 **See
        Notes to Financial Statements.**
  2
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 For
                  the Three Months EndedMarch
                  31,2007
              
              2006(unaudited)
              
              (unaudited)Operating
                  ActivitiesNet
                  (loss)
              
              $
              (74,501
              )
              $
              (45,191
              )Adjustments
                  to reconcile net (loss) to net cash provided (used) by operating
                  activities:Minority
                  interest
              
              
              (57,788
              )
              
              (30,128
              )Depreciation
              
              
              25,143
              
              
              27,642Amortization
              
              
              35,971
              
              
              34,742Changes
                  in operating assets and liabilities:(Increase)/Decrease
                  in accounts receivable
              
              
              (4,065
              )
              
              3,383(Increase)/Decrease
                  in inventory
              
              
              29,642
              
              
              (4,024
              )(Increase)/Decrease
                  in other receivable
              
              
              (3,463
              )
              
              75,298(Increase)/Decrease
                  in advance to suppliers
              
              
              (2,117
              )
              
              (233
              )Increase/(Decrease)
                  in accounts payable and accrued expenses
              
              
              (91,889
              )
              
              (29,630
              )Increase/(Decrease)
                  in pension and employee benefit payable
              
              
              1,752
              
              
              4,578Increase/(Decrease)
                  in taxes payable
              
              
              899
              
              
              (680
              )Increase/(Decrease)
                  in interest payable
              
              
              34,760
              
              
              25,463Increase/(Decrease)
                  in deferred revenue
              
              
              (18,779
              )
              
              (2,198
              )Increase/(Decrease)
                  in customer security deposit
              
              
              (86
              )
              
              -Net
                  cash provided (used) by operating activities
              
              
              (124,521
              )
              
              59,022Investing
                  ActivitiesPurchase
                  of fixed assets
              
              
              (15,971
              )
              
              (27,366
              )Net
                  cash (used) by investing activities
              
              
              (15,971
              )
              
              (27,366
              )Financing
                  ActivitiesShort-term
                  loans
              
              
              105,400
              
              
              -Payback
                  of short-term loans
              
              
              -
              
              
              (31,606
              )Payback
                  of loans from employees
              
              
              (818
              )
              
              (2,040
              )Net
                  cash provided (used) by financing activities
              
              
              104,582
              
              
              (33,646
              )(Decrease)
                  in cash
              
              
              (35,910
              )
              
              (1,990
              )Effects
                  of exchange rates on cash
              
              
              40,278
              
              
              18,499Cash
                  at beginning of period
              
              
              2,600
              
              
              11,582Cash
                  at end of period
              
              $
              6,968
              
              $
              28,091Supplemental
                  Disclosures of Cash Flow Information:Cash
                  paid (received) during year for:Interest
              
              $
              (9,007
              )
              $
              (10,877
              )Income
                  taxes
              
              $
              -
              
              $
              -
 
 **See
        Notes to Financial Statements.**
  3
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        1 - BASIS OF PRESENTATION**
 
 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, 1999. 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
        April
        2, 2007 the Company changed its state of incorporation from North Carolina
        to
        Delaware by merging into its wholly-owned subsidiary. The name of the subsidiary
        was “Shandong Zhouyuan Seed and Nursery Co., Ltd.” which became the name of the
        Company after the reincorporation merger. The merger had no effect on the
        capitalization of the Company.
  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.
  
  4
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        2 - ORGANIZATION AND OPERATIONS (continued)**
  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 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 $1,867,201 at March 31, 2007 that includes operating
        losses of $322,586 and $74,501 for the year ended December 31, 2006 and the
        three months ended March 31, 2007, respectively. Additionally, the Company
        was
        in default on bank loans and interest payments, totaling $1,501,979, as of
        March
        31, 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**
  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 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 $57,155 and $52,626 as of March 31, 2007 and December
        31,
        2006, respectively. The balance sheet amounts with the exception of equity
        at
        March 31, 2007 were translated at 7.74 RMB to $1.00 USD as compared to 7.80
        RMB
        at December 31, 2006. 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, 2007 was 7.77 RMB as compared to 7.96 RMB for the
        year
        ended December 31, 2006.
 
  5
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        3 - SIGNIFICANT ACCOUNTING POLICIES (continued)**
 
 **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 Financial Instruments**
 
 The
        carrying value of financial instruments including cash and cash equivalents,
        receivables, accounts payable and accrued expenses, approximates their fair
        value at March 31, 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.
 
 **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 **.**
 
  6
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        3 - SIGNIFICANT ACCOUNTING POLICIES (continued)**
 
 **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.
 
 **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 activities.
 
 
  7
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        3 - SIGNIFICANT ACCOUNTING POLICIES (continued)**
 
 **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.
 
 **Advertising
        Costs**
 
 Advertising
        costs are expensed as incurred and included as part of selling and marketing
        expenses. Advertising expenses were $983 and $0 for the three months ended
        March
        31, 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
        $8,006
        and $8,960 for the three months ended March 31, 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.
 
 **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.
 
 
 
 
 
  8
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        3 - SIGNIFICANT ACCOUNTING POLICIES (continued)**
 
 **Income
        Taxes**
 
 Deferred
        tax assets and liabilities are recognized for the future tax consequences
        attributable to differences between the financial statement carrying amounts
        of
        existing assets and liabilities and their respective tax bases. Deferred
        tax
        assets and liabilities are measured using enacted tax rates in the US and
        the
        PRC expected to apply to taxable income in the years in which those temporary
        differences are expected to be recovered or settled. The effect on deferred
        tax
        assets and liabilities of a change in tax rates is recognized in income in
        the
        period that includes the enactment date.
 
 **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 three months ended March 31, 2007 and 2006,
        respectively.
 
 **NOTE
        4 - ACCOUNTS RECEIVABLE**
 
 Accounts
        receivable consists of the following:
 March
                  31,2007Accounts
                  receivable
              
              $
              262,906Less:
                  Allowance for bad debt
              
              
              (247,123
              )Accounts
                  receivable, net
              
              $
              15,783
 
 We
        use
        indirect method to write off accounts receivable. The bad debt expenses was
        $0
        and $0 for the three months ended March 31, 2007 and 2006,
        respectively.
 
 **NOTE
        5 - INVENTORIES**
 
 Inventories
        consist of the following:
 March
                  31,2007Finished
                  goods
              
              $
              162,171Supply
                  and packing materials
              
              $
              100,899$
              263,070
 
 
  9
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        6 - PROPERTY AND EQUIPMENT**
 
 The
        following is a summary of property, plant and equipment-at cost, less
        depreciation:
 March
                  31,2007Property
                  and plant
              
              $
              1,802,226Machines
                  and equipment
              
              
              180,457Office
                  equipment
              
              
              21,218Motor
                  vehicles
              
              
              92,8052,096,706Less:
                  Accumulated depreciation
              
              
              (330,668
              )Total
              
              $
              1,766,038
 
 Depreciation
        expense charged to operations was $25,143 and $27,642 for the three months
        ended
        March 31, 2007 and 2006, respectively.
 
 **NOTE
        7 - LAND USE RIGHT**
 
 The
        following is a summary of land use right, less amortization:
 March
                  31,2007Land
                  use right
              
              $
              467,004Less:
                  Amortization
              
              
              (32,355
              )$
              434,649
 
 Amortization
        expense charged to operations was $2,493 and $2,408 for the years ended December
        31, 2006 and 2005, respectively.
 
 **NOTE
        8 - ACQUIRED SEED PATENTS**
 
 The
        following is a summary of acquired seed patents, less amortization:
 March
                  31,2007Acquired
                  seed patents
              
              $
              1,344,377Less:
                  Amortization
              
              
              (728,205
              )$
              616,172
 
 
 
 
 
 
 
 
 
  10
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **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 $308,465
        as of
        March 31, 2007. The parties agreed that the real estate development company
        would pay interest annually at 7.488% on $129,184 (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:
 March
                  31,2007Balance
                  bearing interest at 7.488%
              
              $
              129,184Balance
                  bearing no interest
              
              
              179,281$
              308,465
 
 **NOTE
        10 - BANK LOANS**
 
 Financial
              
              Loan
              
              
              
              Annual
                  InterestInstitutions
              
              Amount
              
              Duration
              
              Rate
              
              CollateralAgricultural
                  Bank of China
              
              $    529,654
              
              04/21/04
                  -04/21/05
              
              6.903%
              
              Headquarter
                  Building and land usagerightAgricultural
                  Bank of China
              
              516,736
              
              11/26/04
                  - 11/26/05
              
              7.488%
              
              Guaranteed
                  by a real estate development companyAgricultural
                  Bank of China
              
              258,368
              
              01/09/06
                  - 01/07/07
              
              7.488%
              
              Usage
                  right of the land located in Chenggang StreetAgricultural
                  Bank of China
              
              64,592
              
              11/26/04
                  - 11/26/05
              
              7.488%
              
              Guaranteed
                  by a real estate development company$
                  1,369,350
  The
        Company was in default on these bank loans, totaling $1,369,350 , as of March
        31, 2007. The Company was also in default on bank loan interest payments
        of
        $177,819 as of March 31, 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 $41,946 and $36,340 for the three months
        ended
        March 31, 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.
 
 
 
  11
  **SHANDONG
        ZHOUYUAN SEED AND NURSERY CO., LTD**
 **F/K/A
        PINGCHUAN PHARMACEUTICALS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 
 **NOTE
        12 - 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.
 
 **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.
        Company
        management believes it has paid Greentree the full amount it is due and will
        contest the complaint. An adverse outcome to this matter would have a material
        adverse effect on the Company's financial position and results of
        operations.
 
 **NOTE
        13 - SUBSEQUENT EVENT: REINCORPORATION MERGER**
 
 On
        April
        2, 2007 the Company changed its state of incorporation from North Carolina
        to
        Delaware by merging into its wholly-owned subsidiary. The name of the subsidiary
        was “Shandong Zhouyuan Seed and Nursery Co., Ltd.” which became the name of the
        Company after the reincorporation merger. The merger had no effect on the
        capitalization of the Company.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  12
  **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 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 quarter of 2007 our sales revenue fell by 17% from the level achieved
        in
        the first quarter of 2006. Our revenue from seed sales in the recent quarter
        exceeded the cost of the seeds by only $30,994 (a mark-up of less than 20%),
        which was less than the cost of amortizing our seed patents, resulting in
        a
        negative gross margin. To sustain operations, we pared down the only
        discretionary spending that we had - our selling expenses - from $22,066
        in the
        period ended March 31, 2006 to $7,107 in the period ended March 31, 2007.
        This
        decision was necessitated by our lack of revenue, but had the inevitable
        result
        of reducing our already dwindling revenue. The net result was that we realized
        a
        net loss before minority interest of $132,289 in the quarter ended March
        31,
        2007, compared to a net loss before minority interest of $75,319 in the quarter
        ended March 31, 2006.
 
 Our
        statement of operations records an adjustment for “minority interest.” For the
        first quarter of 2007 the minority interest adjustment reduced our net loss
        by
        $57,788. 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.
 
  13
  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 quarter of 2007 we recorded $4,529 in unrealized gains on foreign
        currency translation.
 
 Liquidity
        and Capital Resources
 
 At
        March
        31, 2007 we had a working capital deficit of $2,185,017, representing an
        increase of $88,784 in our deficit since December 31, 2006. We had only $6,968
        in liquid assets, and only $15,783 in accounts receivable (net of allowance).
        At
        the same time we owed the Agricultural Bank of China $1,369,350 plus $177,819
        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.
 
 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
        eliminating the revenue stream that we obtain by leasing a portion of the
        property, and will 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.
 
 
  14
  **ITEM
        3. CONTROLS AND PROCEDURES**
 
 *Evaluation
        of Disclosure Controls and Procedures* .
        Wang
        Zhigang, our Chief Executive Officer, and Sanncy Zeng, our Chief Financial
        Officer, carried out an evaluation of the effectiveness of the Company’s
        disclosure controls and procedures as of March 31, 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 March 31, 2007 for the purposes described
        in
        this paragraph.
 
 *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 first 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
                  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:
                  May 18, 2007
              By:
              /s/
                  Wang
                  ZhigangWang
                  Zhigang, Chief Executive OfficerBy:
              /s/
                  Sanncy
                  ZengSanncy
                  Zeng, Chief Financial Officer
  
 *    
        *     *     *   
 *
  15