**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




Amendment
      No.2


to


FORM
      10-KSB





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




For
      the fiscal year ended December 31, 2007.





OR





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





Commission
      File No. 3-52472





SHANDONG
      ZHOUYUAN SEED AND NURSERY CO, LTD.


(Name
      of
      Small Business Issuer in its Charter)




Delaware
              (State
                or other jurisdiction of incorporation or organization)
            
            58-2258912
              (I.R.S.
                Employer ID Number)




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


(Address
      of principal executive offices)





Issuer's
      Telephone Number, including Area Code: 86451-8271-3712





Securities
      Registered Pursuant to Section 12(b) of the Act: None


Securities
      Registered Pursuant to Section 12(g) of the Act:





Common
      Stock, $.001 par value per share





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





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 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
o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B in this form, and no disclosure will be contained, to the best
      of
      the Registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. o





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


Yes
oNo
x





State
      the
      issuer’s revenues for its most recent fiscal year: $702,602





The
      aggregate market value of the Registrant’s common stock, $.001 par value, held
      by non-affiliates as of April 11, 2008 was $,341,045.





As
      of
      April 11, 2008 the number of shares outstanding of the Registrant’s common stock
      was 70,001,200 shares, $.001 par value.





Transitional
      Small Business Disclosure Format:  Yes
oNo
x





**DOCUMENTS
      INCORPORATED BY REFERENCE**


None










**EXPLANATORY
        STATEMENT**
 
 This
        Amendment No. 2 to Form 10-KSB, which amends the Company’s Form 10-KSB for the
        period ended December 31, 2007, filed with the Securities and Exchange
        Commission (the “SEC”) on September 8, 2008, is being filed to do the
        following:
  (i)
              Revise
                  Item 8A. Controls and Procedure.(ii)
              Revise
                  note 1 to the Consolidated Financial Statements to reflect the
                  business
                  combination between Infolink and Zhouyuan as reorganization of
                  entities
                  under common control.
 
 (iii)
              File
                  Exhibit 23.1 Consent of Auditors.












**FORWARD-LOOKING
      STATEMENTS**





*In
      addition to historical information, this Annual Report contains forward-looking
      statements, which are generally identifiable by use of the words “believes,”
“expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or
      similar expressions. These forward-looking statements represent Management’s
      belief as to the future of Shandong Zhouyuan Seed and Nursery Co. Ltd. Whether
      those beliefs become reality will depend on many factors that are not under
      Management’s control. Many risks and uncertainties exist that could cause actual
      results to differ materially from those reflected in these forward-looking
      statements. Factors that might cause such a difference include, but are not
      limited to, those discussed in the section entitled “Management’s Discussion and
      Analysis of Financial Condition and Results of Operations—Risk Factors That May
      Affect Future Results.” Readers are cautioned not to place undue reliance on
      these forward-looking statements. We undertake no obligation to revise or
      publicly release the results of any revision to these forward-looking
      statements.*





**PART
      1**





**Item
      1. Business**





Shandong
      Zhouyuan Seed and Nursery Co., Ltd. (“Zhouyuan”) through its consolidated
      subsidiary, Shandong Zhouyuan Seed and Nursery Co., Ltd., a company formed
      under
      the laws of the People’s Republic of China, is engaged in the business of
      developing, distributing and selling agricultural seeds in China.




**Organization**




The
      Company was originally incorporated in the State of North Carolina on July
      20,
      1996 under the name “Great Land Development Co.” In 2000 Great Land Development
      Co. changed its name to “Xenicent, Inc.” In 2004 Xenicent, Inc. changed its name
      to “Pingchuan Pharmaceutical, Inc.” In 2007 Pingchuan changed its name to
“Shandong Zhouyuan Seed and Nursery Company, Ltd.” As Great Land Development Co.
      the Company was in the business of real estate consulting and purchasing and
      reselling vacant tracts of land, primarily in the North Carolina area. In 2002,
      the Company acquired a majority interest in Giantek Technology Corporation
      ("Giantek"), a Taiwanese corporation that manufactured and distributed Light
      Emitting Diode (LED) display systems. In 2003, the Company terminated its
      relationship with Giantek and agreed to transfer all of the Company’s interest
      in Giantek back to its former controlling shareholders. Thereafter the Company
      existed as a “shell company,” but not a “blank check” company, under regulations
      promulgated by the SEC and had no business operations and only nominal assets
      until 2004
      when
      the Company entered into a plan of exchange with Heilongjiang Pingchuan Yi
      Liao
      Qi Xie You Xian Gong Si, a corporation organized and validly existing under
      the
      laws of the People’s Republic of China. The plan of exchange was consummated on
      August 11, 2004 and the Company changed its name to “Pingchuan Pharmaceutical,
      Inc.” Pingchuan was engaged in the business of providing integrated operational
      management services for a related medical company, Harbin Pingchuan Yao Ye
      Gu
      Fen You Xian Gong Si, a corporation validly organized and existing under the
      laws of the People’s Republic of China (“Gu Fen”). In February
      2007, the Company consummated the merger of Infolink Pacific Limited into a
      wholly-owned subsidiary of the Company (the “Merger”) and changed its state of
      incorporation from North Carolina to Delaware. See “The Merger” below. In
      connection with the Merger, the Company changed its name from “Pingchuan
      Pharmaceutical, Inc.” to “Shandong Zhouyuan Seed and Nursery Company, Ltd.”
 Unless the context otherwise requires, the term “Company” as used herein
      collectively refers to Shandong Zhouyuan and its wholly-owned subsidiaries
      and
      consolidated entities, including Infolink Pacific Limited and Shandong Zhouyuan
      Seed and Nursery Co., Ltd., a PRC company.




The
      Common Stock of the Company is quoted on the Over-the-Counter Bulletin Board
      under the symbol “SZSN.OB.” See, “Part II, Item 5. Market for Registrant’s
      Common Equity, Related Stockholder Matters and Issuer Purchasers of Equity
      Securities.”




The
      Company’s executive offices are located at 238 Jianxindong Street, Laizhou,
      Shandong Province, Peoples Republic of China. The Company may be contacted
      by
      telephone at 011 86 451-8271-3712, and its website is www.chinaseedcorp.com .




2


**Subsidiaries
      and Joint Ventures**




The
      diagram below illustrates the current corporate structure of the Company and
      its
      subsidiaries (“we,” “our,” “us,” or the “Company”):




flowchart





***InfoLink
      Pacific Limited***




Infolink
      was incorporated on September 28, 2006 in British Virgin Islands (“BVI”) under
      the BVI Business Companies Act, 2004 by Li
      Han Xun and You Li ,
      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.





In
      October 2006 Li Han Xun and You Li, the record shareholders of the PRC
      Subsidiary, entered into Trust and Indemnity Agreements with Infolink pursuant
      to which Mr. Li and Ms. You assigned to Infolink all of the benefits of
      ownership of 60% of the total equity interests in the PRC Subsidiary. In
      addition, Mr. Li and Ms. You agreed to vote on shareholder matters as directed
      by Infolink. Finally, the Declaration of Trust signed by Mr. Li and Ms. You
      contains their undertaking to assign the shares of the PRC Subsidiary to
      Infolink at any time upon Infolink’s request.




3





***Shandong
      Zhouyuan Seed and Nursery Co., Ltd.***




Shandong
      Zhouyuan Seed and Nursery Co., Ltd., a People’s Republic of China company was
      organized on October 26, 2001 under the laws of the People’s Republic of China
      (the “PRC Subsidiary” or “Zhouyuan”) by Li Han Xun and You Li, who are the
      record shareholders of the PRC Subsidiary. The PRC Subsidiary was created from
      the merger of two formerly state owned companies, Laizhou Yongzhou Seed Ltd
      and
      Laizhou Agriculture Science Research and Development Ltd., which 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. Since its formation in 2001, the PRC
      Subsidiary has worked closely with government agencies, particularly the state
      Science and Technology Commission, to develop improved hybrid seed strains.
      The
      PRC Subsidiary now ranks as one of the top three seed producers in the LaiZhou
      District, which is known as the “Seed Valley of China.”





***The
      Merger***





On
      January 18, 2007, the Company entered into a Share Exchange Agreement with
      Infolink Pacific Limited pursuant to which the Company issued 55,000,000 shares
      of its common stock to Li Han Xun and You Li in exchange for all of the issued
      and outstanding capital stock of Infolink and Infolink became a wholly-owned
      subsidiary of the Company.





Subsequently
      the Parent Corporation terminated the pharmaceutical consulting business that
      had been carried by its subsidiary, Heilongjiang Pingchuan Yi Liao Qi Xie You
      Xian Gong Si. On April 2, 2007, the Parent Corporation changed its name to
      “Shandong Zhouyuan Seed and Nursery Co., Ltd.”





The
      merger of the
      Company with
      Infolink was accounted
      for as a reverse merger and
      t he
      transaction was treated for accounting purposes as a recapitalization of the
      accounting acquirer (Infolink) and a reorganization of the accounting acquiree (the
      Company ).
      Accordingly, the historical financial statements presented prior to the merger
      are the historical financial statements of Infolink, which includes the
      PRC
      Subsidiary .





In
      addition, under U.S. accounting rules, as a result of the obligations of the
      parties under the Trust and Indemnity A greements
      described above, Infolink
      is deemed to
      be a
      60%
      beneficiary of
      the
      PRC Subsidiary and the financial results of the PRC Subsidiary may be
      consolidated with the financial results of the Company under
      Financial Interpretation 46 (Revised) "Consolidation of Variable Interest
      Entities" issued by the Financial Accounting Standards Board ("FASB").





On
      April
      2, 2007, the Company changed its name to Shandong Zhouyuan Seed and Nursery
      Co.,
      Ltd.





***Production***




Zhouyuan
      currently has approval from several provincial governments to market a wide
      variety of seeds. Its primary product is corn seed, including both corn intended
      for forage and corn with a high starch content for use in industrial food
      production. In addition, Zhouyuan currently markets varieties of wheat seeds
      and
      cabbage seeds.




Among
      Zhouyuan’s most popular products are:




·
            Corn
                - Huiyaun 20. This summer sowing seed achieved first place among
                33
                competitors in a productivity test conducted in the Zhong District
                and
                second place in a competition held in Anhui Province.




4




·
            Corn
                - White Prince. This white corn has a high gluten content that gives
                it a
                particularly attractive taste. Zhouyuan is able to sell these seeds
                for
                almost four times the market price of standard corn
                seeds.·
            Corn
                - Select Yeden 5. This corn is valued in difficult climates because
                it is
                especially resistant to disease and collapse.·
            Corn
                - Spring Queen. In only 65 days (compared to the standard 95 - 115
                days)
                this seed produces a high yield of corn (approx. 24,000 kg. per acre)
                with
                a particularly good taste. Because of these benefits, Zhouyuan prices
                this
                seed at nine times the price of conventional corn
                seeds.·
            Wheat
                - Zhouyuan 9369. This is a new variety of high quality wheat. It
                is rust
                resistance, and grows to 75 cm.




The
      majority of Zhouyuan’s seeds are currently produced by three independent seed
      growers and one municipality consisting of seven towns. These four sources
      dedicate 1400 to 1750 acres to growing seeds for Zhouyuan. Zhouyuan has long
      standing working relationships with all of its seed growers. Zhouyuan provides
      its growers with the patented seeds and the growers would produce the volume
      of
      seeds as required by Zhouyuan. There are no long term contractual relationships
      between Zhouyuan and any of its growers. Zhouyuan determines its volume
      requirements based on its determination of market demand and contracts the
      growers to produce enough seeds to meet the market demand on a seasonal basis.
      Zhouyuan then inspects and packages the seed for distribution
      wholesale.




Zhouyuan’s
      proprietary rights to its seeds are protected by patents, specifically six
      patents on its corn hybrids, one on its wheat hybrid and one on its cabbage
      hybrid. Zhouyuan also owns seven registered trademarks.




***The
      Seed Industry***




The
      People’s Republic of China contains less than 7% of the world’s cultivatable
      land, but 22% of the world’s population. For this reason, the government of
      China has placed a special focus on developing the advanced agricultural
      technology needed to successfully feed its population. The seed industry has
      been a prime beneficiary of this focus, receiving grants, tax relief and
      technological assistance.





Until
      2000 China restricted the market of any individual seed company to the district
      in which it was located. The Seed Law of the People’s Republic of China, issued
      in 2000, eliminated that restriction. Today, there are approximately 3,700
      firms
      marketing seeds nationwide in China. However, because the ability to have a
      national presence is new, the firms marketing seeds in China tend to be small,
      and none has significant market share. The eight largest seed companies are
      believed to control only about 25% of the national market.




A
      number
      of multinational companies have made inroads into the Chinese seed market,
      among
      them Monsanto, Pioneer and Sygenta. To date, however, their influence has been
      limited by the difficulty of marketing to the highly decentralized agricultural
      community in China. In addition, the multinationals primarily offer
      genetically-engineered seeds, which have not gained widespread acceptance in
      China.




5




***Marketing***




Farming
      in China remains a highly decentralized industry. Marketing to farmers is
      conducted at a local level and customer loyalty is built on personal
      relationships. For that reason, Zhouyuan has developed a decentralized
      distribution network, constituted by county-based sales representatives who
      report to independent retail companies located in each of the 19 Provinces
      and
      Autonomous Regions in which Zhouyuan carries on marketing operations. Zhouyuan’s
      internal marketing personnel are responsible for monitoring the performance
      of
      the regional sales companies and providing any assistance they require.





***Government
      Regulation***





Limitations
      on Foreign Ownership in the Seed Industry





Due
      to
      restriction in the People’s Republic of China on foreign investments in Chinese
      businesses in the seed industry, Infolink does not have direct equity ownership
      in Zhouyuan. Zhouyuan
      is owned by two PRC citizens, who hold 60% of the equity interests in Zhouyuan
      in trust for the benefit of the Company.





Regulation
      of Foreign Currency Exchange




The
      principal regulation governing foreign currency exchange in China is the Rules
      on Foreign Exchange Control (1996), as amended. Under the Rules, Renminbi is
      freely convertible for trade and service-related foreign exchange transactions,
      but not for direct investment, loan or investment outside China unless the
      prior
      approval of the State Administration for Foreign Exchange of the PRC or other
      relevant authorities is obtained.




Pursuant
      to the Rules on Foreign Exchange Control, foreign investment enterprises in
      China may purchase foreign currency without the approval of the State
      Administration for Foreign Exchange of the PRC for trade and service-related
      foreign exchange transactions by providing commercial documents evidencing
      these
      transactions. They may also retain foreign exchange (subject to a cap approved
      by the State Administration for Foreign Exchange of the PRC) to satisfy foreign
      exchange liabilities or to pay dividends. However, the relevant PRC government
      authorities may limit or eliminate the ability of foreign investment enterprises
      to purchase and retain foreign currencies in the future. In addition, foreign
      exchange transactions for direct investment, loan and investment outside China
      are still subject to limitations and require approvals from the State
      Administration for Foreign Exchange of the PRC.




Regulation
      of Dividend Distribution




The
      principal regulations governing distribution of dividends of wholly
      foreign-owned companies include:




·
              The
                  Foreign Investment Enterprise Law (1986), as amended;
                  and  ·
              Administrative Rules under the Foreign
                Investment Enterprise Law (2001).






Under
      these regulations, foreign investment enterprises in China may pay dividends
      only out of their accumulated profits, if any, determined in accordance with
      PRC
      accounting standards and regulations. In addition, wholly foreign-owned
      enterprises in China are required to set aside at least 10% of their after-tax
      profits each year, if any, to fund certain reserve funds, unless such reserve
      funds as accumulated have reached 50% of their respective registered capital.
      These reserves are not distributable as cash dividends.




6




Regulation
      of Enterprise Income Law




The
      Enterprise Income Law (“EIT Law’) was promulgated by the National People’s
      Congress on March 16, 2007 to introduce a new uniform taxation regime in the
      PRC. Both resident and non-resident enterprises deriving income from the PRC
      will be subject to this EIT Law from January 1, 2008. It replaces the previous
      two different tax rates applied to foreign-invested enterprises and domestic
      enterprises by only one single income tax rate applied for all enterprises
      in
      the PRC. Under this EIT Law, except for some hi-tech enterprises which are
      subject to EIT rates of 15% and other very limited situation that allows EIT
      rates at 20%, the general applicable EIT rate in the PRC is 25%. We may not
      enjoy tax incentives for our further established companies in the PRC and
      therefore our tax advantages over domestic enterprises may be
      diminished.




***Employees***




Zhouyuan
      has 68 employees, all of whom are employed on a full-time basis. Its employees
      include 1 research scientist, 13 senior agronomists, 27 agronomists and 18
      technicians.




**Item
                2.****Properties**





The
      executive offices of Zhouyuan are located at 238 Jianxindong Street in Laizhou
      in the Province of Shandong. Zhouyuan owns the building in which its offices
      are
      located, although it currently leases the first and second floor. This
      arrangement assures Zhouyuan of adequate space if its growth necessitates
      expansion of its offices.





The
      production facilities are located in a factory owned by Zhouyuan at 1688
      Chenggang Zhong Road in Laizhou. We will need additional capital equipment
      as we
      grow, however. But we believe the factory space will support our expansion
      for
      the foreseeable future.





**Item
                3.****Legal
                Proceedings**




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





**Item
                4.****Submission
                of Matters to a Vote of Security
                Holders**




None.




7





**PART
      II**





**Item
                5.****Market
                for Registrant’s Common Equity, Related Stockholder Matters and Small
                Business Issuer Purchases of Equity
                Securities**





*(a)
      Market Information*





The
      Company’s common stock is quoted on the OTC Bulletin Board under the “SZSN.OB.”
Set forth below are the high and low bid prices for each of the eight quarters
      in the past two fiscal years. All prices have been adjusted to reflect the
      1-for-6 reverse stock split on January 2, 2007. The reported bid quotations
      reflect inter-dealer prices without retail markup, markdown or commissions,
      and
      may not necessarily represent actual transactions.




BidQuarter
                Ending
            
            High
            
            LowMarch
                31, 2006
            
            $
            12.18
            
            $
            2.50June
                30, 2006
            
            $
            6.69
            
            $
            2.50September
                30, 2006
            
            $
            2.81
            
            $
            1.12December
                31, 2006
            
            $
            1.87
            
            $
            0.68March
                31, 2007
            
            $
            1.08
            
            $
            0.04June
                30, 2007
            
            $
            0.3
            
            $
            0.2September
                30, 2007
            
            $
            0.49
            
            $
            0.06December
                31, 2007
            
            $
            0.2
            
            $
            0.04




*(b)
      Shareholders*




Our
      shareholders list contains the names of 2,562 registered stockholders of record
      of the Company’s Common Stock.




*(c)
      Dividends*




The
      Company has not paid or declared any cash dividends on its Common Stock within
      the past three years and does not foresee doing so in the foreseeable future.
      The Company intends to retain any future earnings for the operation and
      expansion of the business. Any decision as to future payment of dividends will
      depend on the available earnings, the capital requirements of the Company,
      its
      general financial condition and other factors deemed pertinent by the Board
      of
      Directors.




8





*(d)
      Sale of Unregistered Securities*




The
      Company did not sell any unregistered securities during the 4 th quarter
      of 2006.





*(e)
      Repurchase of Equity Securities*




The
      Company did not repurchase any of its equity securities that were registered
      under Section 12 of the Securities Act during the 4 th quarter
      of 2006





**Item
                6****Management’s
                Discussion and Analysis**





**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.





In
      2007
      our sales revenue increased by 65.4% from the level achieved in 2006, which
      resulted in a gross profit of $51,660. This increase in revenue was mainly
      due
      to an increase in production and sales which consisted of 739,000 kilogram
      of
      seeds in 2006 as compare to 1,048,000 kilogram for the same period in 2007.
      In
      addition, our patented seeds, which has a higher profit-margin compared to
      our
      non-patented seeds made up a higher percentage of our total sales. Our patented
      seeds made up 26.7% of our total sales volume compared to 18.2% for the same
      period in 2006.





Our
      total
      cost of sale for the fiscal year 2007 was $650,942 compared to $511,763 for
      the
      same period in 2006, an increase of $139,179 or 27%. This increase in cost
      of
      sale was mainly attributable to an increase in volume of seeds we purchased
      from
      our growers in anticipation for a higher demand for our seeds. In fiscal year
      2007 we purchased a total of 112,000 kilograms of seeds as compared to 840,000
      kilograms of seeds for the same period in 2006. As a result of the increase
      volume of seeds purchased, our cost associated with processing and packaging
      the
      larger volume of seeds.




Our
      total
      operating expenses increased to $713,120 for the fiscal year 2007 as compared
      to
      $375,421 for the same period in 2006, an increase of 90%. This was mainly due
      to
      a default judgment filed against us by our former financial consultant Greentree
      Financial Group, Inc. in the amount of $208,217 and consultant fees in the
      amount of $343,000 in the form of Company’s common stock registered on Form S-8
      for financial consulting services.





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
      2007 we recorded $30,354 in unrealized gains on foreign currency
      translation.




9





Liquidity
      and Capital Resources





As
      of
      December 31, 2007, total current assets were $343,532, total current liabilities
      were $3,083,171 and we had working capital deficit of $2,739,639 an increase
      of
      30.5% compared to the same period in 2006.The
      increase in working capital deficit is largely due to a court adjustment payable
      in the amount of $208,217 as a result of a default judgment on a breach of
      contract claim asserted by a former consultant and consulting fee in the amount
      of $343,000.Cash
      at
      December 31, 2007 was $11,345 compared to $2,600 at December 31, 2006, an
      increase of $8,745.





We
      had
      only $11,345 in liquid assets, and only $18,380 in accounts receivable (net
      of
      allowance). At the same time we owed the Agricultural Bank of China $1,449,255
      plus $315,579 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.





Net
      cash
      provided by operating activities was $186,541 for the year ended December 31,
      2007 compared to $35,260 for the year 2006. The increase is primarily related
      to
      an increase in sales.





Net
      cash
      used in investing activities was $86,089 for the year ended December 31, 2007
      compared to $41,472 for the year 2006. The increase is primarily a result of
      the
      investment of RMB304,214 (approximately $43,500) in construction of operating
      facilities.





Net
      cash
      used by financing activities was $97,905 for the year ended December 31, 2007
      compared to $17,810 for the year 2006.




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.




**Application
      of Critical Accounting Policies**





We
      made
      no material changes to our critical accounting policies in connection with
      the
      preparation of financial statements for 2007.




**Impact
      of Accounting Pronouncements**





There
      were no recent accounting pronouncements that have had a material effect on
      the
      Company’s financial position or results of operations.




10





**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.





**Risk
      Factors That May Affect Future Results**





You
      should carefully consider the risks described below before buying our common
      stock. If any of the risks described below actually occurs, that event could
      cause the trading price of our common stock to decline, and you could lose
      all
      or part of your investment.





*There
      is no assurance that we will be able to generate profits from our business.*




To
      date
      we have been unsuccessful in establishing a sufficient market for our seeds
      to
      assure us of profitability. In 2007 our sales increased by 65% compared to
      the
      same period in 2005. Despite the increase in sales, we did not achieve any
      significant profits. Unless we are able to obtain sufficient capital investment
      to permit us to expand operations, it is unlikely that we will be able to
      operate at a profitable level. We have no commitment from any source for
      financing, and there is no assurance that we will be able to obtain the
      necessary financing. Without financing, it is likely that our business will
      fail.





*If
      we
      are unable to settle our bank obligations, we may lose control of our
      business.*





We
      are
      currently in default with respect to principal and interest payments due on
      $1.3
      million in obligations to the Agricultural Bank of China. Our current financial
      situation does not permit us to satisfy the debt as written. We have been in
      negotiations with the Bank regarding a restructuring of the debt. If those
      negotiations do not reach a satisfactory conclusion, we may lose the realty
      that
      we pledged to secure the debt and may face a judgment that could force us into
      bankruptcy.





*We
      will be unable to compete effectively unless we maintain a technological
      advantage over our competitors.*




The
      physics of seed generation has been advancing rapidly in the past forty years.
      Innovations in design of seeds and methods of growing seeds are constant. Our
      ability to compete effectively in this market will depend on our ability to
      stay
      in the vanguard of technological change. However, we compete against many larger
      enterprises that have considerable resources to apply to research and
      development. If we are unable to gain access to the latest discoveries in seeds,
      we will not be able to compete effectively, and our business will fail.




*Our
      business and growth will suffer if we are unable to hire and retain key
      personnel that are in high demand.*




Our
      future success depends on our ability to attract and retain highly skilled
      marketing personnel, chemists, manufacturing technicians and engineers.
      Qualified individuals are in high demand in China, and there are insufficient
      experienced personnel to fill the demand. Therefore we may not be able to
      successfully attract or retain the personnel we need to succeed.




11




*We
      may have difficulty establishing adequate management and financial controls
      in
      China.*





The
      People’s Republic of China has only recently begun to adopt the management and
      financial reporting concepts and practices that investors in the United States
      are familiar with. We may have difficulty in hiring and retaining employees
      in
      China who have the experience necessary to implement the kind of management
      and
      financial controls that are expected of a United States public company. If
      we
      cannot establish such controls, we may experience difficulty in collecting
      financial data and preparing financial statements, books of account and
      corporate records and instituting business practices that meet U.S.
      standards.





*We
      may be unable to protect our proprietary and technology
      rights.*




The
      Company's success will depend in part on its ability to protect its proprietary
      rights and technologies. Zhouyuan relies on a combination of patents, trademark
      laws, trade secrets, confidentiality provisions and other contractual provisions
      to protect its proprietary rights. However, these measures afford only limited
      protection. Zhouyuan’s failure to adequately protect its proprietary rights may
      adversely affect our competitive prospects. Despite our efforts to protect
      our
      proprietary rights, unauthorized parties may attempt to copy aspects of
      Zhouyuan’s products or to obtain and use trade secrets or other information that
      it regards as proprietary.





Zhouyuan’s
      means of protecting its proprietary rights in the People’s Republic of China may
      not be adequate. The system of laws and the enforcement of existing laws in
      China may not be as certain in implementation and interpretation as in the
      United States. The Chinese judiciary is relatively inexperienced in enforcing
      corporate and commercial law, leading to a higher than usual degree of
      uncertainty as to the outcome of any litigation. The inability to enforce or
      obtain a remedy for theft of our proprietary information may have a material
      adverse impact on our business operations.





*Government
      regulation may hinder our ability to function efficiently* .




The
      national, provincial and local governments in the People’s Republic of China are
      highly bureaucratized. The day-to-day operations of our business require
      frequent interaction with representatives of the Chinese government institutions
      in order to obtain and maintain the licenses needed to market hybrid seeds
      in
      China. The effort to obtain the registrations, licenses and permits necessary
      to
      carry out our business activities can be daunting. Significant delays can result
      from the need to obtain governmental approval of our activities. These delays
      can have an adverse effect on the profitability of our operations. In addition,
      compliance with regulatory requirements applicable to manufacturing operations
      and production may increase the cost of our operations, which would adversely
      affect our profitability.





*We
      are subject to the risk of natural disasters* .





Our
      revenue stream depends on our ability to deliver seeds at the beginning of
      their
      growing season. Our supply of seeds and their timely availability can be negated
      by drought, flood, storm, blight, or the other woes of farming. Any such event
      or a combination thereof could render us unable to meet the demands of our
      distribution network. This could have a long-term negative effect on our ability
      to grow our business, in addition to the near-term loss of income.





*Capital
      outflow policies in China may hamper our ability to pay dividends to
      shareholders in the United States.*




The
      People’s Republic of China has adopted currency and capital transfer
      regulations. These regulations require that we comply with complex regulations
      for the movement of capital. Although Chinese governmental policies were
      introduced in 1996 to allow the convertibility of RMB into foreign currency
      for
      current account items, conversion of RMB into foreign exchange for capital
      items, such as foreign direct investment, loans or securities, requires the
      approval of the State Administration of Foreign Exchange. We may be unable
      to
      obtain all of the required conversion approvals for our operations, and Chinese
      regulatory authorities may impose greater restrictions on the convertibility
      of
      the RMB in the future. Because most of our future revenues will be in RMB,
      any
      inability to obtain the requisite approvals or any future restrictions on
      currency exchanges will limit our ability to pay dividends to our shareholders.




12





*Currency
      fluctuations may adversely affect our operating results.*




Zhouyuan
      generates revenues and incurs expenses and liabilities in Renminbi, the currency
      of the People’s Republic of China. However, as a subsidiary of the Parent
      Corporation, it will report its financial results in the United States in U.S.
      Dollars. As a result, our financial results will be subject to the effects
      of
      exchange rate fluctuations between these currencies. From time to time, the
      government of China may take action to stimulate the Chinese economy that will
      have the effect of reducing the value of Renminbi. In addition, international
      currency markets may cause significant adjustments to occur in the value of
      the
      Renminbi. Any such events that result in a devaluation of the Renminbi versus
      the U.S. Dollar will have an adverse effect on our reported results. We have
      not
      entered into agreements or purchased instruments to hedge our exchange rate
      risks.





*We
      have limited business insurance coverage.*




The
      insurance industry in China is still at an early stage of development. Insurance
      companies in China offer limited business insurance products, and do not, to
      our
      knowledge, offer business liability insurance. As a result, we do not have
      any
      business liability insurance coverage for our operations. Moreover, while
      business disruption insurance is available, we have determined that the risks
      of
      disruption and cost of the insurance are such that we do not require it at
      this
      time. Any business disruption, litigation or natural disaster might result
      in
      substantial costs and diversion of resources.





*The
      Parent Corporation is not likely to hold annual shareholder meetings in the
      next
      few years.*





Management
      does not expect to hold annual meetings of shareholders in the next few years,
      due to the expense involved. The current members of the Board of Directors
      were
      appointed to that position by the previous directors. If other directors are
      added to the Board in the future, it is likely that the current directors will
      appoint them. As a result, the shareholders of the Parent Corporation will
      have
      no effective means of exercising control over the operations of the Parent
      Corporation or Zhouyuan.





**Item
                7.****Financial
                Statements**





The
      Company’s financial statements, together with notes and the Independent
      Auditors’ Report, are set forth immediately following Item 14 of this Form
      10-KSB.





**Item
                8.****Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure**





Not
      Applicable




13





**Item
                8A.****Controls
                and Procedures**




**Evaluation
        of Disclosure Controls and Procedures**
  As
        required by Rule 13a-15 under the Exchange Act, as of the end of the period
        covered by this Annual Report, being December 31, 2007, we evaluated the
        effectiveness of the design and operation of our disclosure controls and
        procedures. This evaluation ("Evaluation") was performed by our Chief Executive
        Officer and our Chief Financial Officer in consultation with our accounting
        personnel.
  Based
        upon the Evaluation, our Chief Executive Officer and our Chief Financial
        Officer
        have concluded that as of the end of the period covered by this Annual Report,
        our disclosure controls and procedures were ineffective
        in ensuring that the information we are required to disclose in reports that
        we
        file or submit under the Exchange Act is recorded, processed, summarized
        and
        reported within the time periods specified in Securities and Exchange Commission
        rules and forms. Management has taken steps to ensure that future filings
        contain all items required by the Exchange Act.
  Management’s
        Annual Report on Internal Control Over Financial Reporting


The
      management of the Company is responsible for establishing and maintaining
      adequate internal control over financial reporting as such term is defined
      in
      Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over
      financialreporting is designed to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for external
      purposes in accordance with accounting principles generally accepted in the
      United States of America.





Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.





There
      were no significant changes in our internal controls over financial reporting
      identified in connection with this evaluation that occurred during our last
      fiscal quarter that have materially affected, or are reasonably likely to
      materially affect, the Company’s internal controls over financial
      reporting.





Under
      the
      supervision and with the participation of the Chief Executive Officer and Chief
      Financial Officer, management conducted an evaluation of the effectiveness
      of
      its internal control over financial reporting as of December 31, 2007. The
      framework on which such evaluation was based is contained in the report entitled
      "Internal Control -- Integrated Framework" issued by the Committee of Sponsoring
      Organizations of the Treadway Commission (the "COSO Report"). Based on that
      evaluation and the criteria set forth in the COSO Report, management concluded
      that its internal control over financial reporting was effective as of December
      31, 2007.




This
      Annual Report does not include an attestation report of the Company’s registered
      public accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by the Company’s registered
      public accounting firm pursuant to temporary rules of the Securities and
      Exchange Commission that permit the Company to provide only management’s report
      in this Annual Report.





**Item
                8B.****Other
                Information**




None.





14


**PART
      III**





**Item
                9.****Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance with Section 16(a) of the Exchange
                Act.**





The
      officers and directors of the Company are:





*Name*
            
            *Age*
            
            *Position
                with the Company*
            
            *Director****Since*Wang
                Zhigang
            
            44
            
            Chief
                Executive Officer, Director
            
            2007Zhang
                  Chunman
            
            45
            
            Chief
                Financial Officer, Director
            
            2007Wang
                Zhicheng
            
            40
            
            Director
            
            2007Daoqi
                Jiang
            
            64
            
            Director
            
            2007Chi
                Ming Chen
            
            45
            
            Director
            
            2007





Directors
      hold office until the annual meeting of the Company’s stockholders and the
      election and qualification of their successors. Officers hold office, subject
      to
      removal at any time by the Board, until the meeting of directors immediately
      following the annual meeting of stockholders and until their successors are
      appointed and qualified.





**Wang
      Zhigang** .
      Mr.
      Wang founded Zhouyuan in 2001 and has been employed as its Chairman and General
      Manager since then. Mr. Wang was awarded a degree in Agriculture by The Shandong
      Agriculture University in 1997. In 1992 he was awarded a degree in Vegetable
      Protection by The Nanjing Agriculture University.




**Zhang
        Chunman** served
        as Chief Financial Officer for Shandong Zhouyuan from 2005 until February
        2007.
 From 2004 Mr. Zhang was also employed as the Chief Financial Officer of
        Heilongjiang Pingchuan, which was an affiliate of Shandong Zhouyuan until
        February 2007.  From 2003 to 2004, Mr. Zhang was the Financial Manager for
        Harbin Lingfeng Medicine, Inc., a pharmaceutical company.  From 2001 to
        2003, Mr. Zhang was employed as Financial Manager for the Heilongjiang Supply
        and Sales Cooperation Foreign Trade Company.


**Wang
      Zhicheng** .
      Mr.
      Wang has been employed by Zhouyuan since 2002, initially as Manager and then
      as
      General Manager. In 1986 Mr. Wang was awarded a degree in Civil Engineering
      by
      The Shandong Agriculture Project College.





**Daoqi
      Jiang.** Since
      1990 Mr. Daoqi has been the Director of the Information Centre of the
      Legislative Affairs Office of the State Council for the People’s Republic of
      China. From 1978 to 1990 Mr. Daoqi was employed as Senior Engineer and Project
      Director with responsibility for economic forecasting and District programming
      for the National Development and Reform Commission. In 1964 Mr. Daoqi was
      awarded a B.A. in Mathematics by the Anhui Normal University.





**Chi
      Ming Chen** .
      Since
      2003 Mr. Chen has been employed by China World Trade Corporation (OTC Bulletin
      Board: CWTD), initially as General Manager and now as Chief Executive Officer.
      China World Trade Corporation is engaged in trade agency and investment
      consulting for Chinese businesses. From 2000 to 2001 Mr. Chen was employed
      as
      Chief Executive Officer of Asia Information Source Holding Company, which
      provided online business information. In 1991 Mr. Chen was awarded a Masters
      Degree in Law by the University of Lancaster. In 1987 he was awarded a Masters
      Degree in Physics by the Chinese University of Hong Kong.




15





*Audit
      Committee; Compensation Committee*




The
      Board
      of Directors has not yet appointed an Audit Committee or a Compensation
      Committee, due to the relatively small size of the Board. The Board does not
      have any member who qualifies as an audit committee financial expert, due to
      the
      fact that the current management only took control of this U.S. public company
      in January 2007.




*Code
      of Ethics*




The
      Company does not have a code of ethics that governs the conduct of its executive
      officers. The Board believes that the size of management remains sufficiently
      small that a code of ethics is not needed.




*Section
      16(a) Beneficial Ownership Reporting Compliance*




None
      of
      the officers, directors or beneficial owners of more than 10% of the Company’s
      common stock failed to file on a timely basis the reports required by Section
      16(a) of the Exchange Act during the year ended December 31, 2006.





**Item
                10.****Executive
                Compensation**





The
      following table sets forth all compensation awarded to, earned by, or paid
      by
      Zhouyuan to Wang Zhigang, its Chief Executive Officer, for services rendered
      in
      all capacities to the Company during the years ended December 31, 2006, 2005
      and
      2004. There were no executive officers whose total salary and bonus for the
      fiscal year ended December 31, 2006 exceeded $100,000.





*Year*
            
            *Salary*
            
            *Bonus*
            
            *Stock
                Awards*
            
            *Option
                Awards*
            
            *Other
                Compensation*Wang
                Zhigang
            
            
            2007
            
            $
            1,667
            
            
            -
            
            
            -
            
            
            -
            
            
            -2006
            
            $
            1,667
            
            
            -
            
            
            -
            
            
            -
            
            
            -2005
            
            $
            1,667
            
            
            -
            
            
            -
            
            
            -
            
            
            -





*Employment
      Agreements*





All
      of
      our executive officers serve on an at-will basis.




16





*Equity
      Grants*





The
      following tables set forth certain information regarding the stock options
      acquired by the Company’s Chief Executive Officer during the year ended December
      31, 2006 and those options held by him on December 31, 2006.




*Option
      Grants in the Last Fiscal Year*




Number
                of securities underlying
              option
            
            Percent
                of total options granted to employees in fiscal
            
            Exercise
                Price
            
            Expiration
            
            Potential
                realizable value at assumed annual rates of appreciation for option
                termgranted
            
            year
            
            ($/share)
            
            Date
            
            5%
            
            10%Wang
                Zhigang
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —





The
      following tables set forth certain information regarding the stock grants
      received by the executive officers named in the table above during the year
      ended December 31, 2006 and held by them unvested at December 31,
      2006.





*Unvested
      Stock Awards in the Last Fiscal Year*




Number
                of Shares That Have NotVested
            
            Market
                Value of Shares That Have Not VestedWang
                Zhigang
            
            
            0
            
            
            —





*Remuneration
      of Directors*





None
      of
      the members of the Board of Directors received remuneration for service on
      the
      Board during 2006.





**Item
                11.****Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters**





There
      are
      66,999,401 shares of the Parent Corporation’s common stock issued and
      outstanding. The following table sets forth information known to us with respect
      to the beneficial ownership of our common stock as of the date of this Report
      by
      the following:





·
            each
                shareholder known by us to own beneficially more than 5% of our common
                stock (on a fully-diluted basis);




·
            Wang
                Zhigang, our Chief Executive
                Officer




·
            each
                of the members of our Board of Directors;
                and




17




·
            all
                of the new directors and executive officers as a
                group.





Except
      as
      otherwise indicated, we believe that the beneficial owners of the common stock
      listed below have sole voting power and investment power with respect to their
      shares, subject to community property laws where applicable. Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission.




*Name
                and Address of Beneficial Owner**(1)*
            
            *Amount
                and*
              *Nature
                of Beneficial*
              *Ownership**(2)*
            
            *Percentage*
              *of
                Class*Wang
                Zhigang
            
            
            3,052,300
            
            
            4.4
            %Zhang
                Chunman
            
            
            —
            
            
            —Wang
                Zhicheng
            
            
            90,000
            
            
            0.1
            %Daoqi
                Jiang
            
            
            —
            
            
            —Chi
                Ming Chen
            
            
            —
            
            
            —All
                directors and officers as a group (5 persons)
            
            
            3,142,300
            
            
            4.5
            %





(1)
            Except
                as otherwise noted, the address of each shareholder is c/o Shandong
                Zhouyuan Seed and Nursery Co., Ltd., 238 Jianxindong Street, LaiZhou
                City,
                Shandong Province, P.R. China.(2)
            Except
                as otherwise noted, all shares are owned of record and
                beneficially.




*Equity
      Compensation Plan Information*





The
      information set forth in the table below regarding equity compensation plans
      (which include individual compensation arrangements) was determined as of
      December 31, 2006.





Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights
            
            Weighted
                average exercise price of outstanding options, warrants and
                rights
            
            Number
                of securities remaining available for future issuance under equity
                compensation plansEquity
                compensation plans approved by security holders
            
            
            0
            
            
            
            
            
            0Equity
                compensation plans not approved by security holders
            
            
            0
            
            
            
            
            
            0Total
            
            
            0
            
            
            
            
            
            0




15




18




**Item
                12.****Certain
                Relationships and Related Transactions and Director
                Independence**





*Related
      Party Transactions*





None
      of
      the five individuals who serve as directors or officers of the Parent
      Corporation has engaged in any transaction with the Parent Corporation, Infolink
      Pacific Limited or Zhouyuan during the past fiscal year that had a transaction
      value in excess of $60,000, except as follows:





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.





*Director
      Independence*





Daoqi
      Jiang is the only member of the Parent Corporation’s Board of Directors who is
      independent, as “independent” is defined in the rules of the NASDAQ National
      Market System.




**ITEM
        13. EXHIBITS**
  **Exhibit
                    No.**
                **Description**3.1
                Articles
                    of Incorporation are incorporated herein by reference from
                    Registrant’s Registration Statement on Form SB-2 filed with the
                    SEC on December 21, 2000.3.2
                By-laws
                    are incorporated herein by reference from Registrant’s Registration
                    Statement on Form SB-2 filed with the SEC on December 21,
                    2000.3.3
                Articles
                    of Amendment to Articles of Incorporation is incorporated herein
                    by
                    reference on Form 8-K filed with the SEC on January 5, 2007.4.1
                2007
                    Equity Incentive Plan is incorporated herein by reference from
                    Registrant’s Registration Statement on Form S-8 filed with the SEC on June
                    8, 200710.1
                Agreement
                    on Joint Development of Zhouyuan Building Project with Jixi Xingcheng
                    Real
                    Estate Development Ltd. is incorporated herein by reference from
                    Registrant’s Quarterly Report on Form 8-K filed with the SEC on July 19,
                    2007.
 14.1
                Code
                    of Ethics21.1
                List
                    of Subsidiaries is incorporated herein by reference from Registrant's
                    Annual Report on Form 10-KSB filed on April 15, 2008.23.1
                Consent
                  of Independent Certified Public Accountants*31.1
                Rule
                    13a-14(a)/15d-14(a) Certification by the Chief Executive
                    Officer*31.2
                Rule
                    13a-14(a)/15d-14(a) Certification by the Chief Financial
                    Officer*32.1
                Certification
                    by the Chief Executive Officer pursuant to 18 U.S.C. Section
                    1350, as
                    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002*32.2
                Certification
                    by the Chief Financial Officer pursuant to 18 U.S.C. Section
                    1350, as
                    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002*
  *
          Filed
          Herewith


19




**Item
                14.****Principal
                Accountant Fees and
                Services**




The
      Parent Corporation retained Kempisty & Company, Certified Public Accountants
      P.C. as it principal accountant on January 23, 2006. Prior to that date,
      Kempisty & Company had not performed any services for Pingchuan
      Pharmaceutical or its subsidiary.





*Audit
      Fees*





Kempisty
      & Company billed $37,000 in connection with the audit of the Company’s
      financial statements for the year ended December 31, 2007. Kempisty &
Company billed $37,000 in connection with the audit of the Company’s financial
      statements for the year ended December 31, 2006.





*Audit-Related
      Fees*





Kempisty
      & Company billed the Company $0 for any Audit-Related fee in 2007.


Kempisty
      & Company billed the Company $0 for any Audit-Related fee in 2006.





*Tax
      Fees*





Kempisty
      & Company billed $0 to the Company in 2007 for professional services
      rendered for tax compliance, tax advice and tax planning. Kempisty & Company
      billed $0 to the Company in 2007 for professional services rendered for tax
      compliance, tax advice and tax planning.





*All
      Other Fees*





Kempisty
      & Company billed the Company $0 for other services in 2007.


Kempisty
      & Company billed the Company $0 for other services in 2006.





It
      is the
      policy of the Company that all services other than audit, review or attest
      services must be pre-approved by the Board of Directors. All of the services
      described above were approved by the Board of Directors.




20




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


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




**INDEX**




**PAGE****INDEPENDENT
                AUDITOR'S REPORT**
            
            
            **F-2****CONSOLIDATED
                BALANCE SHEETS**
            
            
            **F-3****CONSOLIDATED
                STATEMENTS OF OPERATIONS**
            
            
            **F-4****CONSOLIDATED
                STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                (DEFICIT)**
            
            
            **F-5****CONSOLIDATED
                STATEMENTS OF CASH FLOWS**
            
            
            **F-6****NOTES
                TO FINANCIAL STATEMENTS**
            
            
            **F-7-F-19**










*KEMPISTY
      & COMPANY*


*CERTIFIED
      PUBLIC ACCOUNTANTS, P.C.*


*15
      MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212)
      513-1930*





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





Board
      of
      Directors


Shangdong
      Zhouyuan Seed and Nursery Co., Ltd.


F/K/A
      Pingchuan Pharmaceuticals, Inc.





We
      have
      audited the accompanying consolidated balance sheet of Shandong Zhouyuan Seed
      and Nursery Co., Ltd. and subsidiaries as of December 31, 2007 and 2006, and
      the
      related consolidated statements of operations and other comprehensive income
      (loss), shareholders' equity (deficit), and cash flows for each of the years
      in
      the two-year period ended December 31, 2007. These financial statements are
      the
      responsibility of the Company's management. Our responsibility is to express
      an
      opinion on these financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Shandong Zhouyuan Seed and Nursery
      Co., Ltd. as of December 31, 2007 and 2006, and the results of its operations
      and its cash flows for each of the years in the two-year period ended December
      31, 2007 in conformity with accounting principles generally accepted in the
      United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 1 to the
      consolidated financial statements, the Company had net losses of $ 813,341 and
      $ 322,586 for
      the
      years ended December 31, 2007 and 2006, respectively; and an accumulated deficit
      of $ 2,636,401 at
      December 31, 2007. Additionally, the Company defaulted on bank loans and
      interest payments, totaling $ 1,764 , 834 as of
      December 31, 2007. These factors raise substantial doubt about its ability
      to
      continue as a going concern. Management’s plans concerning these matters are
      also described in Note 2. The accompanying consolidated financial statements
      do
      not include any adjustments that might result from the outcome of this
      uncertainty.





Kempisty
      & Company


Certified
      Public Accountants PC


New
      York,
      New York


March
      31,
      2008





F-2


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


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


**CONSOLIDATED
      BALANCE SHEET**




**CONSOLIDATED
                BALANCE SHEETS**




December
                31,
            
            December
                31,2007
            
            2006ASSETSCurrent
                Assets:Cash
                and cash equivalents
            
            $
            11,345
            
            $
            2,600Accounts
                receivable, net (Note 4)
            
            
            18,380
            
            
            41,204Inventory
                (Note 5)
            
            
            183,600
            
            
            292,712Other
                receivable
            
            
            17,144
            
            
            29,122Advance
                to suppliers
            
            
            113,063
            
            
            107,811Total
                current assets
            
            
            343,532
            
            
            473,449Property,
                Plant, and Equipment, net (Note 6)
            
            
            1,827,528
            
            
            1,777,634Land
                use right, net (Note 7)
            
            
            452,067
            
            
            433,822Acquired
                seed patents, net (Note 8)
            
            
            545,417
            
            
            644,833Receivable
                from sale of land use right
            
            
            326,465
            
            
            306,1161,323,949
            
            
            1,384,771Total
                Assets
            
            $
            3,495,009
            
            $
            3,635,854LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                Liabilities:Bank
                loans (Note 10)
            
            $
            1,449,255
            
            $
            1,358,920Short-term
                loans
            
            
            37,238
            
            
            133,106Accounts
                payable and accrued expenses
            
            
            522,151
            
            
            446,625Pension
                and employee benefit payable
            
            
            252,137
            
            
            220,494Taxes
                payable
            
            
            124,748
            
            
            116,971Interest
                payable
            
            
            315,579
            
            
            143,059Deferred
                revenue
            
            
            49,729
            
            
            28,946Court
                adjustment payable (Note 13)
            
            
            208,217
            
            
            -Due
                to employees
            
            
            34,526
            
            
            36,563Customer
                security deposit
            
            
            89,591
            
            
            86,998Total
                Current Liabilities
            
            
            3,083,171
            
            
            2,571,682Minority
                interest
            
            
            248,020
            
            
            430,013Stockholders'
                Equity:Preferred
                stock, $0.001 par value, 5,000,000 shares authorized;none
                issued and outstanding as of September 30, 2007
            
            
            -
            
            
            -Common
                stock, $0.001 par value, 150,000,000 shares authorized;70,001,635
                shares issuedand
                outstanding as of December 31, 2007
            
            
            70,002
            
            
            66,999Additional
                paid-in capital
            
            
            3,144,237
            
            
            2,307,240Accumulated
                deficiency
            
            
            (2,636,401
            )
            
            (1,792,706
            )Deferred
                compensation
            
            
            (497,000
            )
            
            -Accumulated
                other comprehensive income
            
            
            82,980
            
            
            52,626Stockholders'
                Equity
            
            
            163,818
            
            
            634,159Total
                Liabilities and Stockholders' Equity
            
            $
            3,495,009
            
            $
            3,635,854**See
                Notes to Consolidated Financial
                Statements**




F-3




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


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


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




For
                the Year EndedDecember
                31,2007
            
            2006RevenuesSale
                of seeds
            
            $
            702,602
            
            $
            424,709Total
                revenue
            
            
            702,602
            
            
            424,709Cost
                of good soldCost
                of seeds sold
            
            
            514,321
            
            
            381,086Amortization
                of seed patents
            
            
            136,621
            
            
            130,677Total
                cost of sales
            
            
            650,942
            
            
            511,763Gross
                Profit
            
            
            51,660
            
            
            (87,054
            )Operating
                ExpensesSelling
                expenses
            
            
            41,790
            
            
            54,384Payroll
            
            
            76,061
            
            
            48,204Pension
                and employee benefit
            
            
            32,927
            
            
            56,386Depreciation
                expenses
            
            
            105,156
            
            
            103,748Amortization
                of land use rights
            
            
            10,173
            
            
            9,730Bad
                debt expenses
            
            
            -
            
            
            19,508Consulting
                fees
            
            
            343,000
            
            
            -Vehicle
                expenses
            
            
            19,392
            
            
            15,894Travel
                and entertainment
            
            
            39,866
            
            
            21,075Other
                general and administrative
            
            
            44,755
            
            
            46,492Total
                Operating Expenses
            
            
            713,120
            
            
            375,421Income
                (Loss) from Operation
            
            
            (661,460
            )
            
            (462,475
            )Other
                Income (Expenses)Interest
                income
            
            
            16,241
            
            
            11,240Interest
                expenses
            
            
            (185,018
            )
            
            (156,500
            )Court
                judgment payable
            
            
            (208,217
            )
            
            -Other
                income (expenses)
            
            
            (19,899
            )
            
            16,867Total
                other income (expenses)
            
            
            (396,893
            )
            
            (128,393
            )Income
                (Loss) before provisionfor
                Income Tax
            
            
            (1,058,353
            )
            
            (590,868
            )Provision
                for Income Tax
            
            
            -
            
            
            -Income
                before Minority Interest
            
            
            (1,058,353
            )
            
            (590,868
            )Minority
                Interest
            
            
            214,658
            
            
            243,162Net
                Income
            
            
            (843,695
            )
            
            (347,706
            )Other
                Comprehensive Income (Loss)Effects
                of Foreign Currency Conversion
            
            
            30,354
            
            
            25,120Comprehensive
                Income (Loss)
            
            $
            (813,341
            )
            $
            (322,586
            )Basic
                and fully diluted earnings (loss) per share
            
            $
            (0.01
            )
            $
            (0.01
            )Weighted
                average shares outstanding
            
            
            69,251,635
            
            
            55,000,000




F-4


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


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


**CONSOLIDATED
      STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)**





**FOR
      THE YEARS ENDED DECEMBER 31, 2007 AND 2006**





**CONSOLIDATED
                STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)****FOR
                THE YEARS ENDED DECEMBER 31, 2007 AND
                2006**




AccumulatedCommon
                Stock
            
            Additional
            
            Retained
            
            
            
            Other$0.001
                Par Value
            
            Paid-in
            
            Earnings
            
            Deferred
            
            ComprehensiveShares
            
            Amount
            
            Capital
            
            (Deficit)
            
            Compensation
            
            Income
            
            TotalsBalances
                atJanuary
                1, 2006
            
            
            100
            
            $
            100
            
            $
            2,374,139
            
            $
            (1,445,000
            )
            $
            
            
            $
            27,506
            
            $
            956,745Common
                stock issued foracquisition
                of Infolink Pacific Limited(reverse
                merger)
            
            
            55,000,000
            
            
            55,000
            
            
            (55,000
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Infolink
                Pacific Limitedshare
                exchange
            
            
            (100
            )
            
            (100
            )
            
            100
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            (347,706
            )
            
            -
            
            
            -
            
            
            (347,706
            )Other
                comprehensive income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            25,120
            
            
            25,120Balances
                atDecember
                31, 2006
            
            
            55,000,000
            
            
            55,000
            
            
            2,319,239
            
            
            (1,792,706
            )
            
            -
            
            
            52,626
            
            
            634,159Reverse
                merger adjustment*
            
            
            12,001,635
            
            
            12,002
            
            
            (12,002
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Stocks
                issued for consultant services
            
            
            3,000,000
            
            
            3,000
            
            
            837,000
            
            
            -
            
            
            (497,000
            )
            
            -
            
            
            343,000Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            (843,695
            )
            
            -
            
            
            -
            
            
            (843,695
            )Other
                comprehensive income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            30,354
            
            
            30,354Balances
                atDecember
                31, 2007
            
            
            70,001,635
            
            $
            70,002
            
            
            3,144,237
            
            
            (2,636,401
            )
            
            (497,000
            )
            
            82,980
            
            
            163,818




*
                The reverse merger adjustment represents the recording of the minority
                shareholders' shares outstanding at the time of the reverse
                merger.




See
      Notes
      to Financial Statements





F-5




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


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


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


For
                  the Year EndedDecember
                  31,2007
              
              2006Operating
                  ActivitiesNet
                  income (loss)
              
              $
              (843,695
              )
              $
              (347,706
              )Adjustments
                  to reconcile net income (loss) tonet
                  cash provided (used) by operating activities:Minority
                  interest
              
              
              (214,658
              )
              
              (243,162
              )Depreciation
              
              
              105,156
              
              
              103,748Amortization
              
              
              146,794
              
              
              140,407Common
                  stocks issued for consultant service
              
              
              840,000
              
              
              -Deferred
                  consultant compensation
              
              
              (497,000
              )
              
              -Increase
                  in court judgment payable
              
              
              208,217
              
              
              -Changes
                  in operating assets and liabilities:(Increase)/Decrease
                  in accounts receivable
              
              
              (6,662
              )
              
              55,290(Increase)/Decrease
                  in inventory
              
              
              109,112
              
              
              32,659(Increase)/Decrease
                  in other receivable
              
              
              11,978
              
              
              166,590(Increase)/Decrease
                  in advance to suppliers
              
              
              (5,252
              )
              
              (71,733
              )Increase/(Decrease)
                  in accounts payable and accrued expenses
              
              
              29,486
              
              
              -Increase/(Decrease)
                  in pension and employee benefit payable
              
              
              107,169
              
              
              (24,902
              )Increase/(Decrease)
                  in taxes payable
              
              
              -
              
              
              (20,569
              )Increase/(Decrease)
                  in interest payable
              
              
              172,520
              
              
              136,365Increase/(Decrease)
                  in deferred revenue
              
              
              20,783
              
              
              21,275Increase/(Decrease)
                  in customer security deposit
              
              
              2,593
              
              
              86,998Net
                  cash provided (used) by operating activities
              
              
              186,541
              
              
              35,260Investing
                  ActivitiesPurchase
                  of fixed assets
              
              
              (86,089
              )
              
              (41,472
              )Net
                  cash (used) by investing activities
              
              
              (86,089
              )
              
              (41,472
              )Financing
                  ActivitiesPayback
                  of short-term loans
              
              
              (95,868
              )
              
              (12,829
              )Payback
                  of loans from employees
              
              
              (2,037
              )
              
              (4,981
              )Net
                  cash provided (used) by financing activities
              
              
              (97,905
              )
              
              (17,810
              )Increase
                  (decrease) in cash
              
              
              2,547
              
              
              (24,022
              )Effects
                  of exchange rates on cash
              
              
              6,198
              
              
              14,774Cash
                  at beginning of period
              
              
              2,600
              
              
              11,848Cash
                  at end of period
              
              $
              11,345
              
              $
              2,600Supplemental
                  Disclosures of Cash Flow Information:Cash
                  paid (received) during year for:Interest
              
              $
              (28,157
              )
              $
              (23,155
              )Income
                  taxes
              
              $
              -
              
              $
              -
  F-6


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


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


**NOTES
      TO FINANCIAL STATEMENTS**





**Note
                1-****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:


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.




In
      addition, under U.S. accounting rules, as a result of the obligations of the
      parties under the Trust and Indemnity Agreements described above, Infolink
      is
      deemed to be a 60% beneficiary of the PRC Subsidiary and is considered to be
      under “Common Control” since the majority shareholders of both companies are
      substantially the same. This results in the financial results of the PRC
      Subsidiary being   combined  with the financial results of the
      Company under FAS 141 (Revised) “Business Combinations" issued by the Financial
      Accounting Standards Board ("FASB") . The results of operations for 2006 are
      reported as if the combination took place on January 1, 2006. There was no
      adjustment to the value of the Zhouyuan net assets combined .


F-7




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.





**Note
                2-****GOING
                CONCERN**





As
      reflected in the accompanying consolidated financial statements, the Company
      has
      an accumulated deficit of $ 2,636,401 at
      December 31, 2007 that includes operating losses of $ 813,341 and
      $ 322,586 for the
      years ended December 31, 2007 and 2006, respectively. Additionally, the Company
      was in default on bank loans and interest payments, totaling $ 1,764,834 ,
      as of
      December 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**





**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.




F-8




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 $ 82,980 and
      $ 52,626 as of
      December 31, 2007 and 2006, respectively. The balance sheet amounts with the
      exception of equity at December 31, 2007 were translated at 7.31 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 years ended December 31, 2007 and 2006 were 7.62
      RMB
      and 7.96 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.





**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





**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.




F-9





**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 December 31, 2005 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
                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.




F-10




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 activates. The total borrowing from employees was $ 0 and
      $ 0 in the
      years ended December 31, 2007 and 2006, respectively.




**Revenue
      Recognition**


****


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


****


**Research
      and Development Costs**




Research
      and development costs relating to the development of new products and processes,
      including significant improvements and refinements to existing products, are
      expensed as incurred. The Research and development cost was immaterial for
      the
      Company for the years ended December 31, 2007 and 2006, respectively, and was
      included into general and administration expenses.




F-11




**Advertising
      Costs**




Advertising
      costs are expensed as incurred and included as part of selling and marketing
      expenses. Advertising expenses were $3,407 and $6,204 for the years ended
      December 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
      $ 32,927 and
      $ 56,386 for the
      years ended December 31, 2007 and 2006, 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**




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 years ended December 31, 2007 and 2006,
      respectively.




F-12





**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 effected 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
      December 2007, the FASB issued Statements of Financial Accounting Standards
      No.
      141 (revised 2007), “Business Combinations” (“SFAS 141R”) and No. 160,
“Noncontrolling Interests in Consolidated Financial Statements - an amendment
      to
      ARB No. 51” (“SFAS 160”). Both SFAS 141R and SFAS 160 are to be adopted
      effective January 1, 2009. SFAS 141R requires the application of several new
      or
      modified accounting concepts that, due to their complexity, could introduce
      a
      degree of volatility in periods subsequent to a material business combination.
      SFAS 141R requires that all business combinations result in assets and
      liabilities acquired being recorded at their fair value, with limited
      exceptions. Other areas related to business combinations that will require
      changes from current GAAP include: contingent consideration, acquisition costs,
      contingencies, restructuring costs, in process research and development and
      income taxes, among others. SFAS 160 will primarily impact the presentation
      of
      minority or noncontrolling interests within the Balance Sheet and Statement
      of
      Operations as well as the accounting for transactions with noncontrolling
      interest holders. Management does not expect that the adoption of SFAS No.
      141
      (revised 2007) and SFAS No. 160 would have a material effect on the Company’s
      financial position and results of operations.




F-13




In
      February 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities -
      Including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159
      provides an option to report certain financial assets and liabilities at fair
      value primarily to reduce the complexity and level of volatility in the
      accounting for financial instruments resulting from measuring related financial
      assets and liabilities differently under existing GAAP. SFAS 159 is effective
      January 1, 2008. The Company does not anticipate SFAS 159 having a material
      impact on its financial statements.





In
      September 2006, the SEC issued SAB No. 108, which provides guidance on the
      process of quantifying financial statement misstatements. In SAB No. 108, the
      SEC staff establishes an approach that requires quantification of financial
      statements errors, under both the iron-curtain and the roll-over methods, based
      on the effects of the error on each of the Company’s financial statements and
      the related financial statement disclosures. SAB No. 108 is generally effective
      for annual financial statements in the first fiscal year ending after November
      15, 2006. The transition provisions of SAB No. 108 permits existing public
      companies to record the cumulative effect in the first year ending after
      November 15, 2006 by recording correcting adjustments to the carrying values
      of
      assets and liabilities as of the beginning of that year with the offsetting
      adjustment recorded to the opening balance of retained earnings. Management
      does
      not expect that the adoption of SAB No. 108 would have a material effect on
      the
      Company’s financial position or results of operations.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      158, "Employer's Accounting for Defined Benefit Pension and Other Postretirement
      Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)" ("SFAS
      158"). SFAS 158 requires an employer to recognize the over funded or under
      funded status of a defined benefit postretirement plan (other than a
      multiemployer plan) as an asset or liability in its statement of financial
      position and to recognize changes in that funded status in the year in which
      the
      changes occur through comprehensive income of a business entity or changes
      in
      unrestricted net assets of a not-for-profit organization. The standard also
      requires an employer to measure the funded status of a plan as of the date
      of
      its year-end statement of financial position, with limited exceptions.




An
      employer with publicly traded equity securities is required to initially
      recognize the funded status of a defined benefit postretirement plan and to
      provide the required disclosures as of the end of the fiscal year ending after
      December 15, 2006. An employer without publicly traded equity securities is
      required to recognize the funded status of a defined benefit postretirement
      plan
      and to provide the required disclosures as of the end of the fiscal year ending
      after September 15, 2007. The adoption of SFAS 158 did not have a material
      effect on the Company's financial position or results of
      operations.




F-14




In
      September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements”. SFAS No.
      157 defines fair values, establishes a framework for measuring fair value,
      and
      expands disclosures about fair value measurements. This Statement shall be
      effective for financial statements issued for fiscal years beginning after
      November 25, 2007, and interim periods within those fiscal years. Earlier
      application is encouraged provided that the reporting entity has not yet issued
      financial statements for that fiscal year, including financial statements for
      an
      interim period with that fiscal year. The provisions of this statement should
      be
      applied, except in some circumstances where the statement shall be applied
      retrospectively. Management does not expect that the adoption of SFAS No. 157
      would have a material effect on the Company’s financial position and results of
      operations.




In
      July
      2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for
      Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a
      company should recognize, measure, present and disclose in its financial
      statements uncertain tax positions that the company has taken or expects to
      take
      on a tax return (including a decision whether to file or not to file a return
      in
      a particular jurisdiction). The accounting provisions of FIN No. 48 are
      effective for fiscal years beginning after December 15, 2006. The adoption
      of
      FIN No. 48 did not have a material effect on the Company's financial position
      or
      results of operations.





**Note
                4-****ACCOUNTS
                RECEIVABLE**





Accounts
                receivable consists of the following:December
                31,
            
            December
                31,2007
            
            2006Accounts
                receivable
            
            $
            278,713
            
            $
            286,444less:
                Allowance for bad debt
            
            
            (260,333
            )
            
            (245,240
            )Accounts
                receivable, net
            
            $
            18,380
            
            $
            41,204


We
        use
        indirect method to write off accounts receivable. The bad debt expenses was
        $0
        and $ 19,508 for the years ended December 31, 2007 and 2006,
        respectively.




**Note
                5-****INVENTORIES**




Inventories
                consist of following:




December
                31,
            
            December
                31,2007
            
            2006Finished
                goods
            
            $
            121,923
            
            $
            194,963Supply
                and packing materials
            
            
            61,677
            
            
            97,749$
            183,600
            
            $
            292,712




F-15




**Note
                  6- PROPERTY AND EQUIPMENT**
 
 The
                  following is a summary of property, plant and equipment-at cost,
                  less
                  accumulated depreciation:
 
 December
                  31,
              
              December
                  31,2007
              
              2006Property
                  and plant
              
              $
              1,948,984
              
              $
              1,788,497Machines
                  and equipment
              
              
              189,391
              
              
              180,379Office
                  equipment
              
              
              17,801
              
              
              19,761Motor
                  vehicles
              
              
              98,222
              
              
              92,098Total
              
              
              2,254,398
              
              
              2,080,735Less:
                  Accumulated depreciation
              
              
              (426,870
              )
              
              (303,101
              )Total
              
              $
              1,827,528
              
              $
              1,777,634
 
 Depreciation
        expense charged to operations was $ 105,106 and
        $ 103,748 for the
        years ended December 31, 2007 and 2006, respectively.
  **Note
                  7- LAND USE RIGHT**
 
 The
                  following is a summary of land use right, less
                  amortization:
 
 December
                  31,
              
              December
                  31,2007
              
              2006Land
                  use right
              
              $
              494,255
              
              $
              463,447less:
                  Amortization
              
              
              (42,188
              )
              
              (29,625
              )Accounts
                  receivable, net
              
              $
              452,067
              
              $
              433,822
 
 Amortization
        expense charged to operations was $ 10,173 and
        $ 9,730 for the
        years ended December 31, 2007 and 2006, respectively.




F-16


**Note
                  8-****ACQUIRED
                  SEED PATENTS**
 
 The
                  following is a summary of acquired seed patents, less
                  amortization:
 
 December
                  31,
              
              December
                  31,2007
              
              2006Acquired
                  seed patents
              
              $
              1,422,826
              
              $
              1,334,188less:
                  Amortization
              
              
              (877,409
              )
              
              (689,305
              )Accounts
                  receivable, net
              
              
              545,417
              
              
              644,883
 
 Amortization
        expense charged to operations was $136,621 and $130,677 for the years ended
        December 31, 2007 and 2006, respectively.


**Note
      9-**  **COMMON
      STOCK**




On
      January 18, 2007, The Company entered into a Share Exchange Agreement with
      Mr.
      Wang, Zhigang and Ms. You, Li, who are the shareholders of Infolink, pursuant
      which the Company will issue to Messrs. Wang and You 55,000,000 (330,000,000
      pre-split) shares of its common stock in exchange for all of the capital stock
      of Infolink. Since this transaction was treated for accounting purposes as
      a
      capital transaction and reverse merger, the issuance of 33,000,000 shares of
      common has been report in 2006, as if it had happened in the earliest period
      presented in these consolidated financial statements.




On
      April
      5, 2007, the Company engaged a consultant for a eighteen-month period ended
      October 4, 2008. The terms of the agreement are for the consultant to receive
      800,000 shares of common stock valued at $0.28 per share, totaling $224,000,
      which will be amortized over the beneficial period. The consultant assists
      the
      Company in establish two distribution centers in the Center Region,
      PRC.




On
      April
      5, 2007, the Company engaged another consultant for a twenty-four-month period
      ended April 4, 2009. The terms of the agreement are for the consultant to
      receive 1,200,000 shares of common stock valued at $0.28 per share, totaling
      $336,000, which will be amortized over the beneficial period. The consultant
      assists the Company in website design, building, maintenance, and
      hosting.




On
      April
      5, 2007, the Company engaged another consultant for a twenty-four-month period
      ended April 4, 2009. The terms of the agreement are for the consultant to
      receive 1,000,000 shares of common stock valued at $0.28 per share, totaling
      $280,000, which will be amortized over the beneficial period. The consultant
      assists the Company in establish two distribution centers in the Southwest
      Region, PRC.




F-17





**Note
                10-****BANK
                LOANS**




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


Loan
              
              
              
              AnnualFinancial
                  Institutions
              
              Amount
              
              Duration
              
              Interest
                  Rate
              
              Collateral*****Agricultural
                  Bank of China
              
              $
              560,561
              
              
              04/21/04--04/21/05
              
              
              6.903
              %
              
              Headquarter
                  Building and land usage right*****Agricultural
                  Bank of China
              
              
              546,889
              
              
              11/26/04--11/26/05
              
              
              7.488
              %
              
              Guaranteed
                  by a real estate development companyAgricultural
                  Bank of China
              
              
              273,444
              
              
              01/09/05--01/07/06
              
              
              7.488
              %
              
              Usage
                  right of the land located in Chenggang Street*****Agricultural
                  Bank of China
              
              
              68,361
              
              
              11/26/04--11/26/05
              
              
              7.488
              %
              
              Guaranteed
                  by a real estate development company$
              1,449,255
 
 *****
              The
                  Company defaulted on these bank loans, totally $1,449,255,
                  as of December 31, 2006. The Company also defaulted on bank loan
                  interest
                  payments of $315,579as
                  of December 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 $ 185,018 and
        $ 156,500 for the
        years ended December 31, 2007 and 2006, respectively.
  **Note
          11- 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 Company received
        interest payments of $ 3,942 and
        $ 6,236 for the
        years ended December 31, 2007 and 2006, respectively. $ 9,654 and
        $ 3,166 of
        interest was due to the Company as of December 31, 2007 and 2006,
        respectively.
  F-18
  The
        receivable from sale of land use right consists of the following:
  December
                  31,
              
              December
                  31,2007
              
              2006Balance
                  bearing interest at 7.488%
              
              $
              136,722
              
              $
              128,200Balance
                  bearing no interest
              
              
              189,743
              
              
              177,916326,465
              
              
              306,116
 
 **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.
  **Note
        13-**  **LITIGATION**
  On
        August
        1, 2006 Greentree Financial Group, Inc. ("Greentree"), a former consultant
        to a
        subsidiary of the Company, filed a breach of contract complaint in the Superior
        Court in Mecklenberg County, North Carolina for non payment of contractual
        obligations for 2004 and 2005. The claim is for $49,000 in cash and $40,000
        worth of stock as compensatory damages or $80,000 in liquidated damages.
        The
        Company failed to appear to the Court, and the Court rendered a judgment,
        which
        orders the Company to pay the plaintiff a sum of $201,500, with interest
        thereon
        at the rate of 8.000% per annum from the date of Entry of the Judgment until
        paid; and for the costs of this action, in full, to be taxed by the Clerk.
        The
        Company will appeal the case.
  F-19


SIGNATURES





In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.




**Shandong
                Zhouyuan Seed and Nursery Co., Ltd.**By:
            /s/
              Wang
              ZhigangWang
                Zhigang, Chief Executive Officer




In
      accordance with the Exchange Act, this Report has been signed below on October
      21, 2007 by the following persons, on behalf of the Registrant and in the
      capacities and on the dates indicated.




/s/
              Wang
              ZhigangWang Zhigang, Director,
              Chief Executive Officer


/s/
                Zhang
                ChunmanZhang Chunman, Director,
                Chief Financial Officer
 /s/
                  Wang
                  ZhichengWang Zhicheng, Director
 Daoqi Jiang, Director
 /s/
                      Chi Ming
                      ChenChi Ming Chen, Director