10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 2)

(Mark One)

ý Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2008

or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ___________.

Commission File Number 000-51200

Yongye International, Inc.

(Exact Name of Small Business Issuer as Specified in Its Charter)

Nevada	20-8051010
(State or other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

6th Floor, Suite 608, Xue Yuan International Tower, No. 1 Zhichun Road, Haidian District Beijing, PRC

(Address of Principal Executive Office)

(Former address of Principal Executive Office, if changed since last report)

+86 10 8232 8866

(Issuer’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of November 12, 2008, 26,760,258 shares of common stock, par value $.001 per share, were issued and outstanding.

EXPLANATORY NOTE

We are filing this Quarterly Report on Form 10-Q/A (the “Amendment”) to amend Part I, Item 1, Financial Statements, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 4T, Controls and Procedures, in the original Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”). This Amendment has been filed to correct a computational error in our unaudited consolidated statement of operations and comprehensive income, to update the comprehensive income reported for the three and nine months ended September 30, 2008 in the financial highlights table in Item 2, and to update the disclosure contained in such Item 4T to reflect management's conclusions regarding such matters following certain restatements of our financial statements. 

	Page
Part I: Financial Information:
Item 1 -Financial Statements	3
Consolidated Balance Sheets	3
Consolidated Statements of Operations and Comprehensive Income	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4T - Controls and Procedures	29
Signatures	32

2

Item 1 - Financial Statements

YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	Yongye International, Inc. and Subsidiaries (f/k/a Yongye Biotechnology International, Inc.)		The predecessor Inner Mongolia Yongye
	SEPTEMBER 30, 2008		DECEMBER 31, 2007
	(Unaudited)
	(Restated- Note 1(C))
CURRENT ASSETS
Cash and cash equivalents	$	6,847,558	$	376,002
Accounts receivable		20,678,867		1,630,609
Inventories		2,060,532		9,851,788
Advance payments		273,722		-
Due from related party		954,431		-
Due from affiliates		-		978,384
Other receivables		1,247,929		27,038
Total Current Assets		32,063,039		12,863,821
PROPERTY AND EQUIPMENT, NET		3,386,463		2,486,487
INTANGIBLE ASSETS, NET		114,817		3,665,584
LONG-TERM INVESTMENTS		-		4,115,764
TOTAL ASSETS	$	35,564,319	$	23,131,656
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,503,005	$	1,271,852
Short-term bank loans		-		5,484,000
Due to shareholders		-		2,507,371
Due to related parties		1,646,282		-
Tax payables		414,997		893,892
Other payables		85,986		50,916
Derivative liabilities – fair value of warrants		2,762,470		-
Total Current Liabilities		6,412,740		10,208,031
LONG-TERM LIABILITY		204,962		12,153
Minority interest		1,192,426		-
STOCKHOLDERS' EQUITY
Capital stock: 26,760,258 shares authorized and issued par value $.001 at September 30, 2008		26,760		-
Capital contribution		-		7,260,000
Additional paid-in capital		13,661,106		-
Retained earnings		12,382,642		4,024,111
Statutory reserve		1,263,713		480,629
Accumulated other comprehensive income		419,970		1,146,732
Total Stockholders’ Equity		27,754,191		12,911,472
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	35,564,319	$	23,131,656

The accompanying notes are an integral part of these consolidated financial statements.

 

3

YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

	Yongye			The predecessor			Yongye			The predecessor
	International, Inc.			Inner Mongolia Yongye			International, Inc.			Inner Mongolia Yongye
	and Subsidiaries						and Subsidiaries
	(f/k/a Yongye Biotechnology International, Inc.)						(f/k/a Yongye Biotechnology International, Inc.)
	FOR THREE MONTHS ENDED			FOR THREE MONTHS ENDED			FOR NINE MONTHS ENDED			FOR NINE MONTHS ENDED
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			SEPTEMBER 30, 2008			SEPTEMBER 30, 2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(Restated – Note 1 (C))						(Restated – Note 1 (C))
SALES	$	18,202,940		$	2,625,137		$	45,189,579		$	10,752,855
COST		9,278,944			1,021,719			21,697,964			5,368,480
GROSS PROFIT		8,923,996			1,603,418			23,491,615			5,384,375
OPERATING EXPENSES		3,440,036			159,398			7,437,513			230,591
GENERAL AND ADMINISTRATIVE EXPENSES		453,683			196,386			1,265,808			351,372
INCOME FROM OPERATIONS		5,030,277			1,247,634			14,788,294			4,802,412
OTHER INCOME (EXPENSES)
Interest		65,785			-			66,563			1,291
Other income (expense)		(340,087	)		(81,827	)		(726,927	)		(279,468	)
Change in fair value of derivative liabilities		3,618,579			-			1,464,256			-
TOTAL OTHER INCOME (EXPENSES)		3,344,277			(81,827	)		803,892			(278,177	)
INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST		8,374,554			1,165,807			15,592,186			4,524,235
PROVISION FOR INCOME TAXES		227,537			-			822,302			-
NET INCOME BEFORE MINORITY INTEREST		8,147,017			1,165,807			14,769,884			4,524,235
PROVISION FOR MINORITY INTEREST		57,421			-			1,092,426			-
NET INCOME		8,089,596			1,165,807			13,677,458			4,524,235
Foreign Currency Translation Adjustment		5,199			170,033			419,970			344,228
COMPREHENSIVE INCOME	$	8,094,795		$	1,335,840		$	14,097,428		$	4,868,463
Net income  per share:
Basic		0.37			N/A			0.80			N/A
Diluted		0.20			N/A			0.69			N/A
Weighted average shares used in computation:
Basic		21,594,470			N/A			17,194,563			N/A
Diluted		22,807,756			N/A			17,699,747			N/A

The accompanying notes are an integral part of these consolidated financial statements.

 

4

YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

	Yongye Biotechnology International, Inc. And Subsidiaries (f/k/a Yongye International, Inc.) FOR NINE MONTHS ENDED SEPTEMBER 30, 2008 (Unaudited)			The predecessor Inner Mongolia Yongye FOR NINE MONTHS ENDED SEPTEMBER 30, 2007 (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	13,677,458		$	4,524,235
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		115,541			160,978
Change in fair value of derivative liabilities		(1,464,256	)		-
Loss on disposal of fixed assets		-			146,714
Provision for minority interest		1,092,426			-
Changes in assets and liabilities:
Accounts receivable, net		(20,628,654	)		(1,116,746	)
Inventories		(2,046,871	)		(5,211,663	)
Other receivables, net		(1,247,729	)		(518,729	)
Advances to suppliers		(273,630	)		85,904
Prepaid expense		-			(4,374	)
Accounts payable and accrued expenses		1,484,826			(77,148	)
Deposit received		120			-
Tax payable		414,009			58,074
Due from related party		(954,735	)		-
Due to related parties		1,626,548			(225,171	)
Other payables		85,783			(1,391,508	)
Net Cash Used in Operating Activities		(8,119,164	)		(3,569,434	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment		(3,493,192	)		(96,165	)
Additions to intangible assets		(122,899	)		-
Net Cash Used in Investing Activities		(3,616,091	)		(96,165	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans		205,028			4,251,841
Proceeds from shares issued		19,450,651			-
Proceeds from shareholder loans		-			831,157
Repayment of long-term loans		-			(6,500	)
Payment for stock issuance costs		(1,461,659	)		-
Net Cash From Financing Activities		18,194,020			5,076,498
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH		380,656			32,791
NET INCREASE IN CASH AND CASH EQUIVALENTS		6,839,421			1,443,690
CASH AND CASH EQUIVALENTS - BEGINNING		8,137			89,023
CASH AND CASH EQUIVALENTS - ENDING	$	6,847,558		$	1,532,713
Supplemental cash flow information:
Cash paid for income taxes		424,725			-
Cash paid for interest expense payment		-			138,955

The accompanying notes are an integral part of these consolidated financial statements.

5

YONGYE INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

NOTE 1 - -ORGANIZATION AND DESCRIPTION OF BUSINESS

A. Organization

 Yongye International, Inc. (the “Company”, formerly known as “Golden Tan, Inc.” or “Yongye Biotechnology International, Inc.”) was incorporated in the State of Nevada on December 12, 2006. On April 17, 2008, the Company entered into a share exchange agreement (the “Exchange Agreement”) with Fullmax Pacific Limited, a privately held investment holding company organized on May 23, 2007 under the laws of the British Virgin Islands (“Fullmax”) and the shareholders of Fullmax (the “ Fullmax Shareholders”), who collectively owned all the issued and outstanding ordinary shares of Fullmax. Pursuant to the terms of the Exchange Agreement, the Fullmax Shareholders transferred to the Company all of their shares in exchange for 11,444,755 (the “Shares”) shares of the Company’s common shares (the “Share Exchange”). As a result of the Share Exchange, Fullmax became a wholly-owned subsidiary of the Company and the Fullmax Shareholders received approximately 84.7% of the Company’s issued and outstanding common shares. Immediately prior to the date of the Share Exchange, the Company was a publicly listed shell entity with no operations and had a nominal amount of cash and, Fullmax, through its wholly-owned subsidiary, Asia Standard Oil Limited (“ASO”) and indirect subsidiary, Yongye Nongfeng Biotechnology (“Yongye Nongfeng”), was engaged in the sale of fulvic acid based liquid and powder nutrient compounds for plant and animal feed used in the agriculture industry. The Share Exchange was accounted for as a reverse recapitalization, equivalent to the issuance of stock by Fullmax for the net monetary assets of the Company accompanied by a recapitalization.

In November 2007, ASO a Hong Kong investment holding company, entered into a Sino-Foreign cooperative joint venture contract (“Contract”) with Inner Mongolia Yongye Biotechnology Co., Ltd. (“Inner Mongolia Yongye”) to form a cooperative joint venture, Yongye Nongfeng Biotechnology Co. Ltd (“Yongye Nongfeng”), pursuant to which, Inner Mongolia Yongye and ASO is to own 10% and 90% of the equity interests in Yongye Nongfeng, respectively. Inner Mongolia Yongye was formed on September 16, 2003 in the People’s Republic of China (the “PRC”). Mr. Zishen Wu, Chief Executive Officer, President and Chairman of the Company, owns a controlling 91.67% of the equity interest in Inner Mongolia Yongye. Inner Mongolia Yongye’s primary business is the research, manufacturing, and sale of biochemical products for use in plants and animal growth.  Inner Mongolia Yongye is located in the City of Hohhot, Inner Mongolia Autonomous Region PRC.

On January 4, 2008, the incorporation and establishment of Yongye Nongfeng was approved by the Inner Mongolia Department of Commerce and the Inner Mongolia Administration for Industry and Commerce. The scope of business of Yongye Nongfeng is the distribution and sale of products of Inner Mongolia Yongye.  The period of the cooperative joint venture is ten years and may be extended by a written application submitted to the relevant government authority for approval no less than six months prior to the expiration of the cooperative joint venture. Prior to the legal establishment of Yongye Nongfeng, both Fullmax and ASO were non substantive holding companies with no assets and operations and were primarily designed and used as legal vehicles to facilitate foreign participation in the business conducted by Inner Mongolia Yongye.

In May 2008, upon the agreement among Inner Mongolia Yongye, ASO and Yongye Nongfeng, the ownership of Yongye Nongfeng was revised, pursuant to which Inner Mongolia Yongye and ASO became 0.5% and 99.5% equity interest owner of Yongye Nongfeng, respectively. ASO has not fully injected its share of the capital into Yongye Nongfeng as it is not required to do so until 2 years after the establishment of the CJV. Based upon actual capital injection into Yongye Nongfeng, Inner Mongolia Yongye and ASO were 0.6% and 99.4% owners, respectively, of Yongye Nongfeng as of September 30, 2008.

B. Nature of Business

The Company, through its primary operating subsidiary, Yongye Nongfeng, is engaged in the sale of fulvic acid based liquid and powder nutrient compounds used in the agriculture industry in the PRC. In January 2008, upon receiving governmental approval of the establishment of Yongye Nongfeng, the management of Yongye Nongfeng anticipated that Yongye Nongfeng would not be able to obtain the fertilizer licensee in the near future, and therefore, Yongye Nongfeng entered into an agreement ( the “Agreement”) with Inner Mongolia Yongye, pursuant to which Yongye Nongfeng agreed to purchase finished goods products that are to be manufactured by Inner Mongolia Yongye at a fixed price of RMB 350 per case for fulvic acid plant based products and RMB 120 per case for fulvic acid animal based products .  The term of the Agreement is for the period from January 15, 2008 to January 14, 2013. Pursuant to the Agreement, the Company can terminate this by giving one month notice to Inner Mongolia Yongye.

On September 5, 2008, we entered into a securities purchase agreement (the “September Purchase Agreement”), with certain Qualified Institutional Buyers (the “September Investors”), for the sale in a private placement of an aggregate of 6,073,006 shares of our Common Stock (the “September Investor Shares”), and the issuance of 1,518,253 warrants (the “September Warrants”), for aggregate gross proceeds equal to approximately $9,350,000 (the “September Offering”). Expenses of the September Offering were $995,500.

In connection with the September Offering, we also entered into a registration rights agreement (the “ September Registration Rights Agreement”) with the September Investors, in which we agreed to file a registration statement (the “ September Registration Statement”) with the SEC to register for resale the September Investor Shares and the shares underlying the September Warrants, on or prior to 45 calendar days after the closing date of the September Offering, and use our best efforts to have the September Registration Statement declared effective within 150 calendar days of the closing date of the September Offering. We registered the September Investor Shares and the shares underlying the September Warrants in the April Registration Statement by using a “piggy back” registration process. We requested that the SEC accelerate the effectiveness of our S-1 Registration Statement on September 8, 2008 which was declared effective on September 11, 2008.

In connection with the September Offering, we entered into an escrow agreement with Roth Capital Partners, LLC (“Roth”), the Escrow Agent and Full Alliance (the “September Escrow Agreement”), pursuant to which 4,000,000 of the Shares issued to Full Alliance in the Share Exchange (the “September Escrow Shares”) were delivered to the Escrow Agent. Of the September Escrow Shares, 2,000,000 shares (the “Make Good Escrow Shares”) are being held as security for the achievement of 2008 and 2009 Make Good ATNI in the following manner. If the Company achieves (i) the 2008 Net Income Threshold, and (ii) fully diluted earnings per share reported in the 2008 Annual Report on Form 10-K filed with the SEC (the “2008 Annual Report”), of no less than $0.42 (the “2008 Guaranteed EPS”), then the provisions described in the following paragraph apply with respect to the achievement of 2009 net income and fully diluted earnings per share targets and the Make Good Escrow Shares will be retained in escrow for the achievement of certain net income and fully diluted earnings per share targets for the year ending December 31, 2009. If the Company does not achieve the Make Good ATNI, the Make Good Shares will be released pro-rata to the September Offering investors.

6

In the event that (i) the 2009 After Tax Net Income equals or exceeds $12,649,248 and is less than $15,811,560, or (ii) the fully diluted earnings per share reported in the 2009 Annual Report on Form 10-K filed with the SEC (the “2009 Annual Report”), equals or exceeds $0.42 and is less than $0.53, then Make Good Shares equal to the product of (i)(A) $15,811,560 minus the 2009 After Tax Net Income, divided by (B) $15,811,560, and (ii) the Make Good Escrow Shares, shall be transferred to the September Investors on a pro-rata basis, and the remaining Make Good Shares shall be returned to Full Alliance.

The remaining 2,000,000 escrow shares are being held as security for the timely issuance of Yongye Biotechnology’s (the “Predecessor”) fertilizer License into the name of Yongye Nongfeng Biotechnology Co. and completion of the CJV Restructuring as defined below (the “Restructuring Make Good Shares”). This license is issued by the Ministry of Agriculture and gives the owner the right to manufacturer and sell fertilizer products domestically. In the event that (1) the License has not been issued to Yongye Nongfeng Biotechnology by June 30, 2009, or such later date as agreed to by us and the September Investors holding a majority of the September Investor Shares at such time (the “License Grant Date”), or (2) the License has been issued by the License Grant Date, but the CJV Restructuring is not completed by the Restructuring Completion Date, the Restructuring Make Good Shares shall be transferred in accordance with the September Escrow Agreement to the September Investors on a pro-rata basis for no consideration other than their respective investment amounts paid to us at the closing of September Offering. The “Restructuring Completion Date” shall be the date that is 132 calendar days after the License Grant Date. If the License is issued by the License Grant Date and the CJV Restructuring is completed by the Restructuring Completion Date, the Restructuring Make Good Shares shall be returned to Full Alliance.

As part of the above private financing, the Company agreed to begin a restructuring process whereby our Cooperative Joint Venture ('CJV") subsidiary, Yongye Nongfeng Biotechnology Co. ("Yongye Nongfeng"), will acquire all of the land rights, buildings, equipment and permits that currently belong to our Predecessor and outsourced manufacturing partner Inner Mongolia Yongye. This will enable Yongye Nongfeng to centralize and manage the Company’s product research and development, manufacturing and distribution and result in a more tightly integrated business model with greater control over our product quality and intellectual property. The full restructuring process should be completed by approximately September 2009. We will begin by purchasing the production equipment used in the existing 2,000 Tonnes Per Annum (TPA) production facility, which was purchased from the Inner Mongolia Yongye pursuant to an Asset Transfer Agreement on October 31, 2008. The Company will also terminate the contract manufacturing agreement after obtaining the fertilizer license referred to above. The total liability incurred for payments to the Predecessor company is limited to USD$6M and thus far USD$.95M has been paid to the predecessor company.

In order to support our future growth, we are in the process of constructing a new 8,000 TPA production facility. This new facility is located at the same site as Inner Mongolia Yongye’s 2,000TPA production facility and has already been put into testing and should be into full production within the fourth quarter of 2008. The combined 10,000 TPA capacity of both facilities will allow the Company to produce its own finished goods in the quantities needed to fulfill its current and future sales goals. After the completion of the equipment purchase and the integration of the equipment with the Company’s new 8,000 TPA facility, the Company will discontinue its current exclusive contract manufacturing agreement with Inner Mongolia Yongye.

On September 12, 2008 Roth Capital executed an irrevocable cashless exercise of its warrants and purchased 686,878 shares in the aggregate of Common Stock of the Company pursuant to the April 17, 2008 and September 5, 2008 Placement Agent Warrants. In exchange for the issuance of 354,987 shares, Roth surrendered 649,562 warrants received in the April Offering and in exchange for 331,891 shares; Roth surrendered 607,301 warrants received in the September Offering.

C. Restatement of Financial Statements

Subsequent to the preparation of the Company’s interim consolidated financial statements as of and for the three and nine months ended September 30, 2008, management identified an error in the Company’s basic and diluted net income per share presented in its previously issued consolidated financial statements. The Company has incorrectly accounted for the April Escrow Shares and September Escrow Shares (See Note 8) as contingently issuable shares for purposes of calculating earnings per share and excluded such outstanding shares that were placed in escrow from the calculation of the weighted average number of common shares outstanding. It was determined that since April Escrow Shares and September Escrow Shares are neither contingently cancellable nor contingently returnable to the Company, the shares should have been included in the denominator in computing the Company’s basic and diluted net income per share.

In connection with the April Offering and September Offering in 2008 (see Note 8), the Company issued the “April Warrants” and “September Warrants” to certain investors and Roth Capital Partners LLC (“Roth”). According to the terms of these warrants, the Company could be required to pay cash to the warrant holders under certain events that are not within the control of the Company. Specifically, upon the occurrence of certain “fundamental transactions” as defined, the warrant holders (but not the shareholders of the Company’s common stock) are entitled to receive cash equal to the value of the warrants to be determined based on an option pricing model and certain specified assumptions set forth in the warrant agreement. In accordance with Emerging Issues Task Force Issue (EITF) No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, such potential cash payments that are not within the Company’s control would preclude equity classification and therefore the warrants should have been classified as a liability and adjusted to fair value through earnings at each reporting date starting from the issuance date.

As a result, the amounts of $1,731,567 and $3,150,375 should have been recognized as derivative liabilities with fair value at issuance April 17, 2008 and September 5, 2008, respectively. The decrease in fair value of the warrants of $3,658,274 and $2,119,470 should have been recorded as a gain to earnings for the three months and six months ended September 30, 2008, respectively. In addition, since the Roth Warrants issued by the Company in April and September 2008 (see Note 8) also contains the “Fundamental Transactions”, such warrants should have been accounted for as a liability with changes in fair value also reported in earnings. Roth exercised these warrant during the three months ended September, 30, 2008 (see Note8). Accordingly, the increase in fair value of the Roth April Warrants from June 30, 2008 to the exercise date and the increase in fair value of the Roth September Warrants from the date of issuance through the exercise date of $39,694 should have been recorded as a charge to earnings for the three months ended September 30, 2008. The increase in fair value of the Roth April and September Warrants from issuance date to the exercise date of should have been recorded as a charge to earnings for the nine months ended September 30, 2008. These restatement adjustments had no impact on the Company’s previously reported income tax amounts because the profit or loss associated with these warrants for financial reporting purposes, as described herein, are not expected to result in future income tax consequences.

7

The following table presents the effect of correcting this error on the consolidated financial statements for the three months and nine months ended September 30, 2008. As the correcting adjustments had no impact on the amounts previously reported for the Company’s operating, investing or financing cash flows, the adjustments to the components of consolidated cash flow statement to reconcile net income to net cash used by operating activities are not presented.

CONSOLIDATED BALANCE SHEET

	September 30, 2008
	As Previously Reported		As Restated
Derivative liabilities		-		2,762,470
Total current liabilities		3,650,270		6,412,740
Additional paid-in capital		17,887,832		13,661,106
Retained earnings		10,918,386		12,382,642
Total Stockholders' Equity		30,516,661		27,754,191

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	Three months ended September 30, 2008					Nine months ended September 30, 2008
	As Previously			As Restated		As Previously			As Restated
Change in fair value of derivative liabilities		-			3,618,579		-			1,464,256
Total other expenses, net		(274,302	)		3,344,277		(660,364	)		803,892
Income before provisions for income taxes and noncontrolling interest		4,755,975			8,374,554		14,127,930			15,592,186
Net income before minority interest		4,528,438			8,147,017		13,305,628			14,769,884
Net income		4,471,017			8,089,596		12,213,202			13,677,458
Comprehensive income		4,476,216			8,094,795		12,633,172			14,097,428
Net income per ordinary share-basic	$	0.24		$	0.37	$	0.78		$	0.80
Net income per ordinary share-diluted	$	0.22		$	0.20	$	0.75		$	0.69
Weighted average ordinary shares outstanding		18,637,948			21,594,470		15,654,417			17,194,563
Weighted average ordinary shares outstanding used in computing diluted net income per ordinary share.		20,103,760			22,807,756		16,335,237			17,699,747

8

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine months ended September 30, 2008
	As Previously Reported		As Restated
NET INCOME		12,213,202		13,677,458
Decrease in fair value of derivative liabilities		-		(1,464,256	)

NOTE 2 - -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and include the financial statements of the Company and its majority-owned subsidiaries. All significant intercompany transactions and balances are eliminated on consolidation.

The accompanying unaudited consolidated financial statements as of September 30, 2008 and for the three and nine months ended September 30, 2008 and 2007 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X applicable to small business issuers. In the opinion of management, these unaudited consolidated interim financial statements include all adjustments considered necessary to make the financial statements not misleading. The results of operations for the three and nine months ended September 30, 2008 are not necessarily indicative ofthe results for the full fiscal year ending December 31, 2008. The unaudited consolidated interim financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December31, 2007 as reported in Form S-1.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 95, “Statement of Cash Flows,” the Company and the Predecessor considers all highly liquid instruments with original maturities of three months or less to be cash and cash equivalents.

ACCOUNTS RECEIVABLE AND BAD DEBT RESERVE

The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts receivable. As a consequence, the Company believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectability and are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. Based on the age of the receivables, the Company reserves 10% of accounts receivable balances that have been outstanding for more than 6 months but less than one year, 20% of accounts receivable balances that have been outstanding between one year and two years, 50% of receivable balances that have been outstanding between two year and three years, and 100% of receivable balances that have been outstanding for more than three years. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted . No allowance for doubtful accounts was provided as of September 30, 2008.

Our normal credit terms to our major customers are typically 90 days, while we ask our other customers to pay either up front or upon receipt. We based the CJV’s Accounts Receivable and Bad Debt Reserve policy on the historical experience of the Predecessor company’s sale and collection rates for the same products.

INVENTORY

Inventory is stated at the lower of weighted average cost, which takes into account historical prices on a continuing basis, or market. PROPERTY AND EQUIPMENT

Property and equipment other than leasehold improvements are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are stated at cost and depreciated using the straight-line method over the estimated useful life or lease period, whichever is shorter. Estimated useful lives are as follows:

Estimated Useful Life

Yongye International, Inc.
Office equipment and furniture	5 years
Leasehold improvements	15 months
The Predecessor- Inner Mongolia Yongye
Buildings	50 years
Machinery and equipment	10-20 years
Transportation equipment	10 years

9

REVENUE RECOGNITION

Our distributors are classified as our customers. Revenue from product sales is recognized when title has been transferred, which is generally at the time of customer’s receipt of product, the risks and rewards of ownership have been transferred to the customer, the fee is fixed and determinable, and the collection of the related receivable is probable. The Company reports revenue net of value added taxes if applicable.

If the product is has expired or the package is broken at the time of receipt, the distributor has the right to exchange it for a new product with intact package; and distributors do not have the right to return unused, intact product to us after it has been delivered.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising costs for three months ended September 30, 2008 and 2007 were $2,347,780 and $4,000, respectively. Advertising costs for the nine months ended September 30, 2008 and 2007 were $4,404,812 and $12,600, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company follows SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. Per SFAS 144, the Company is required to periodically evaluate the carrying value of long-lived assets and to record an impairment loss when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the asset’s carrying amounts.

In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company and the Predecessor concluded that as of September 30, 2008 and December 31, 2007 there were no significant impairments of their long-lived assets.

INCOME TAXES

Deferred income taxes are computed using the asset and liability method, such that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between financial reporting amounts and the tax basis of existing assets and liabilities based on currently enacted tax laws and tax rates in effect in the People’s Republic of China for the periods in which the differences are expected to reverse. Income tax expense is the tax payable for the period plus the change during the period in deferred income taxes.

A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. No material differences were noted between the book and tax bases of the Company and the Predecessor’s assets and liabilities, respectively, therefore, there are no deferred tax assets or liabilities for the three months period ended September 30, 2008 and 2007 and the nine months period ended September 30, 2008 and 2007. Yongye Nongfeng is subject to PRC Enterprise Income Tax at a rate of 25% of net income from its foundation on January 4, 2008, and 1.25% of gross revenue since April 2008. Since the Predecessor is located in the economic development area in Inner Mongolia Autonomous Region, the Predecessor is exempt from income tax according to the tax law in China.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

The financial position and results of operations of the Company’s Chinese subsidiaries are determined using the local currency (Chinese Yuan) as the functional currency, while the reporting currency is the US dollar. Assets and liabilities of the subsidiaries are translated at the prevailing exchange rate in effect at each period 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 period. Translation adjustments arising from the use of different exchange rates from period to period are included in the cumulative translation adjustment account in shareholders’ equity. Gains and losses resulting from foreign currency transactions denominated in other than the functional currency are included in operations as incurred. Such gains and losses were immaterial for the periods ended September 30, 2008 and 2007.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows Statement of Financial Accounting Standards (“SFAS”) 157, Fair Value Measurements. SFAS 157 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived form or corroborated by observable market data.

Level 3 - Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts of cash and cash equivalents, term deposits, trade receivables, and accounts payable approximate their fair value due to the short-term nature of these instruments The Company uses level 2 inputs to value its derivative liabilities.

NET INCOME PER SHARE

Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution that would occur upon the exercise of outstanding warrants at September 30, 2008.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2008, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position FAS 157-2. "Effective Date of FASB Statement No. 157" ("FSP FAS 157-2"), which delays the effective date of  SFAS 157 for all nonrecurring fair value measurements of nonfinancial assets and liabilities until fiscal years beginning after November 15, 2008. The Company has elected to defer the adoption of the nonrecurring fair value measurement disclosures of nonfinancial assets and liabilities. The adoption of FSP FAS 157-2 is not expevted to have a material impact on the Company’s results of operations, cash flows or financial positions.

NOTE 3-INVENTORIES

Inventories at September 30, 2008 and December 31, 2007 consisted of the following:

	Yongye		The Predecessor
	International, Inc. and Subsidiaries		Inner Mongolia Yongye
	SEPTEMBER 30, 2008		DECEMBER 31, 2007
Raw materials	$	-	$	384,361
Packing supplies		-		195,127
Work-in process		-		4,969,350
Finished goods		2,059,173		4,302,950
Consumables		1,359		-
Total	$	2,060,532	$	9,851,788

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NOTE 4-DUE FROM AFFILIATES

The balance due from the Predecessor’s affiliated entity, Huimin Biotechnology Co., Ltd., at December 31, 2007 was $978,384. The balance had no stated terms for repayment and was not interest-bearing.

NOTE 5-PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2008 and December 31, 2007 consisted of the following:

	Yongye
	International, Inc. and		The Predecessor
	Subsidiaries		Inner Mongolia Yongye
	SEPTEMBER 30, 2008		DECEMBER 31, 2007
Buildings	$	-	$	1,560,251
Manufacturing equipment		1,240		788,641
Office equipment and furniture		44,057		33,724
Construction-in-process		2,891,425		1,797
Vehicles		338,305		419,529
Leasehold improvement		218,815		-
		3,493,842		2,803,942
Less: Accumulated depreciation		107,379		317,455
Total	$	3,386,463	$	2,486,487

Depreciation expense for the three months period ended September 30, 2008 and 2007 was $19,197 and $89,469, respectively. Depreciation expense for the nine months period ended September 30, 2008 and 2007 was $107,379 and $94,802, respectively.

NOTE 6- INTANGIBLE ASSETS

Net intangible assets at September 30, 2008 and December 31, 2007 were as follows:

	Yongye
	International, Inc. and		The Predecessor
	Subsidiaries		Inner Mongolia Yongye
	SEPTEMBER 30, 2008		DECEMBER 31, 2007
Rights to use land	$	-	$	4,028,099
Patent		106,045		-
Software		17,154		-
		123,199		4,028,099
Less: accumulated amortization		8,382		362,515
Total	$	114,817	$	3,665,584

Product patent was acquired by the Company in March 2008 with an estimated useful life of 10 years. It is amortized using the straight-line method over its useful life commencing on April 1, 2008. Computer software was acquired by the Company in June 2008 with an estimated useful life of 10 years. It is amortized using the straight-line method over its useful life commencing on July 1, 2008. Amortization expense for the three months period ended September 30, 2008 and 2007 amounted to $3,081 and $63,060, respectively. Amortization expense for the nine months period ended September 30, 2008 and 2007 amounted to $8,382 and $66,176, respectively.

NOTE 7 - LONG-TERM INVESTMENTS

Long-term investments of the Predecessor as of December 31, 2007 consist of medicinal plants and trees which the Predecessor purchased in conjunction with the right to use land. These medicinal plants and trees are to be used for human medical treatments and the Predecessor intends to sell them in future years as they mature.

NOTE 8 - CAPITAL STOCK

Capital stock

Concurrent with the “Share Exchange”, the Company entered into a securities purchase agreement on April 17, 2008 with certain investors (the “April Investors”) for the sale in a private placement of an aggregate of 6,495,619 shares of the Company’s common stock, par value $0.001 per share (the “April Investor Shares”) for aggregate gross proceeds equal to $10,000,651 (the “April Offering”).

On September 5, 2008, the Company entered into a securities purchase agreement, with certain investors (the “September Investors”), for the sale in a private placement of an aggregate of 6,073,006 shares of the Company’s common stock, par value $0.001 per share (the “September Investor Shares”) for aggregate gross proceeds equal to approximately $9,350,000 (the “September Offering”).

Warrants

Concurrent with the “April Investor Shares”, the Company issued 1,623,905 warrants to purchase 1,623,905 shares of the Company’s common stock (the “April Warrants”) to the April Investors. The warrants issued have a 5 years exercise period with an exercise price of $1.848. In addition, 649,562 warrants were issued to Roth Capital Partners LLC (“Roth”) as the placement agent with terms and exercise price identical to the warrants issued to the April Investors.

Concurrent with the “September Investor Shares”, the Company issued 1,518,253 warrants to purchase 1,518,253 shares of the Company’s common stock (the “September Warrants”) to the September Investors. The warrants issued have a 5 years exercise period with an exercise price of $1.848. In addition, 607,301 warrants were issued to Roth as the placement agent with terms and exercise price identical to the warrants issued to the September Investors.

11

On September 12, 2008 Roth Capital executed an irrevocable cashless exercise of its warrants and was issued 686,878 shares of common stock of the Company pursuant to the April 17, 2008 and September 5, 2008 warrants issued to Roth as placement agent. In exchange for the issuance of 354,987 shares, Roth surrendered 649,562 warrants received in the April Offering; and in exchange for the issuance of 331,891 shares, Roth surrendered 607,301 warrants received in the September Offering.

At September 30, 2008, there are 3,142,158 warrants outstanding with a weighted average exercise price of $1.848.  Of this total, 1,623,905 expire in April 2013, 1,518,253 expire in September 2013.

Pursuant to these warrant agreements, in the event of a “Fundamental Transaction” that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any successor entity shall pay at the warrants holders’ option, exercisable at any time concurrently with or within 30 days after the consummation of the Fundamental Transaction, an amount of cash equal to the value of this Warrant .

As of September 30, 2008 the fair value of all of our outstanding derivative liability warrants was $2,762,470. The change in their fair values during the three and nine months ended September 30, 2008 of $3,658,274 and $2,119,470 in fair value is reported as a non-cash gain in our condensed consolidated statement of income and comprehensive income, respectively. The increase in fair value of the Roth April Warrants from June 30, 2008 to the exercise date and the increase in fair value of the Roth September Warrants from the date of issuance through the exercise date of $39,694 have been recorded as a charge to earnings for the three months ended September 30, 2008. The increase in fair value of the Roth April and September Warrants from issuance date to the exercise date of have been recorded as a charge to earnings for the nine months ended September 30, 2008.

The estimated fair values of the Company’s Investor Warrants were determined at September 30, 2008 using Binominal Option Pricing Model with Level 2 inputs.

The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value as of September 30, 2008.

			Fair Value Measurements Using:
	Total		Quoted Prices in Active Markets for Identical Financial Assets and Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
September 30, 2008			Level 1		Level 2		Level 3
Liabilities at fair value:
Derivative liabilities—warrants		2,762,470		—		2,762,470		—
Net Liabilities	$	2,762,470	$	—	$	2,762,470	$	—

The fair values of the warrants granted are as follows:

Fair value of Warrant per share (US$) at:	2008 April Offering		2008 September Offering
April 17, 2008		1.07		N/A
June 30, 2008		2.01		N/A
September 5, 2008		N/A		2.08
September 30, 2008		0.88		0.87

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The fair values of the warrants as of September 30, 2008 were determined based on the Binominal option pricing model using the following assumptions:

	April Offering			September Offering
Expected volatility		52.5	%		51.5	%
Expected dividends yield		0	%		0	%
Expected time to maturity	4.55 years			4.93 years
Risk-free interest rate per annum		1.411	%		1.411	%
Fair value of underlying Common Shares (per share)		2.00			2.00
Exercise multiple		2.4			2.4

Escrow shares

In connection with the April Offering, the Company entered into an escrow agreement with Roth as a representative of the April Investors, Tri-State Title & Escrow LLC (the “Escrow Agent”) and  Full Alliance, one of the Company’s shareholders (the “April Escrow Agreement”), pursuant to which 2,000,000 shares of the Company held by Full Alliance (the “April Escrow Shares”) were delivered to the Escrow Agent. The Escrow Shares were held for the Company’s achievement of $10,263,919 after tax net income (“ATNI”) for the year ended December 31, 2008 (the “2008 Net Income Threshold ”). As reported in the Company’s 2008 Form 10-K, the ATNI threshold has been achieved.

In connection with the September Offering, the Company entered into an escrow agreement with Roth, the Escrow Agent and Full Alliance (the “September Escrow Agreement”), pursuant to which 4,000,000 shares of the Company issued to Full Alliance in the Share Exchange (the “September Escrow Shares”) were delivered to the Escrow Agent. Of the September Escrow Shares, 2,000,000 shares  (the “Make Good Escrow Shares”)  are being held for the Company’s achievement of 2008 and 2009 financial targets described below:

If the Company achieves (i) the 2008 Net Income Threshold, and (ii) fully diluted earnings per share reported in the Company’s 2008 Annual Report on Form 10-K filed with the SEC (the “2008 Annual Report”) of no less than $0.42 (the “2008 Guaranteed EPS”), then the provisions described in the following sentence apply with respect to the achievement of 2009 net income and fully diluted earnings per share targets and the Make Good Escrow Shares will be retained in escrow for the achievement of certain net income and fully diluted earnings per share targets for the year ending December 31, 2009. In the event that (i) the 2009 ATNI is less than $12,649,248, or the fully diluted earnings per share reported in 2009 Annual Report on Form 10-K filed with the SEC (the “2009 Annual Report”) is less than $0.42, all of the 2,000,000 Make Good Escrow Shares shall be distributed to the September Investors on a pro-rata basis, (ii) the 2009 ATNI equals or exceeds $12,649,248 and is less than $15,811,560, or the fully diluted earnings per share reported in the 2009 Annual Report, equals or exceeds $0.42 and is less than $0.53, then the Make Good Shares equal to the product of  (i)(A) $15,811,560 minus the 2009 ATNI, divided by (B) $15,811,560, and (ii) the Make Good Escrow Shares, shall be transferred to the September Investors on a pro-rata basis, and the remaining share shall be returned to Full Alliance, (iii) the 2009 ATNI exceeds $15,811,560, the 2,000,000 Make Good Escrow Shares will be released back to Full Alliance.

If the Company does not achieve (i) the 2008 Net Income Threshold, or (ii) 2008 Guaranteed EPS, the Make Good Escrow Shares will be released pro-rata to the September Offering investors.

The remaining 2,000,000 escrow shares are being held for the timely approval obtained from Ministry of Agriculture of Inner Mongolia in relation to the transfer of fertilizer license to Yongye Nongfeng from Inner Mongolia Yongye and completion of Yongye Nongfeng’s restructuring (the “Restructuring Make Good Shares”). The fertilizer license is issued by the Ministry of Agriculture and provides the holder the right to manufacture and sell fertilizer products in the PRC.  The Company is undergoing a restructuring process under which the Company will purchase the land, buildings and equipment which comprised of the 10,000 tonnes per annum capacity of the fulvic acid based products (“Yongye Nongfeng Restructuring”).

In the event that (1) the fertilizer license has not been issued to Yongye Nongfeng by June 30, 2009, or such later date as agreed to by the Company and the September Investors holding a majority of the September Investor Shares at such time (the “License Grant Date”), or (2) the fertilizer license has been issued by the License Grant Date, but the Yongye Nongfeng Restructuring is not completed by the Restructuring Completion Date, the Restructuring Make Good Shares shall be transferred in accordance with the September Escrow Agreement to the September Investors on a pro-rata basis for no consideration. The “Restructuring Completion Date” shall be the date that is 132 calendar days after the License Grant Date.

The purpose of the April Escrow Arrangement and September Escrow Arrangement was an inducement made to facilitate the respective offerings, and not part of a compensatory arrangement to management. The escrow shares will not be released or cancelled due to the discontinued employment of any management of the Company.

NOTE 9 - RELATED PARTY TRANSACTIONS

The Predecessor company is a 0.6% shareholder of the Company’s main operating subsidiary, Yongye Nongfeng, and is Yongye Nongfeng’s only vendor that provided $6,128,774 (100%) of the Company’s purchased finished goods for the three months period ended September 30, 2008 and $23,597,523 for the nine months period ended September 30, 2008. As of September 30, 2008, due from related party represents the prepayment the Company made to the predecessor as of September 30, 2008 for future purchases of inventory from the Predecessor. According to the contract, the Predecessor sells to us at fixed prices of RMB 350 per case for plant products and RMB 120 per case for animal products.

As of September 30, 2008, the Company has borrowed $1,636,282 from Ms. Yin, the wife of CEO Mr. Zishen Wu of Inner Mongolia Yongye Nongfeng, and $10,000 from a director of the Company, Kim McElroy. These funds are interest free with no specific terms of repayment. As of December 31, 2007, the Predecessor has borrowed $2,507,371 from stockholders. These loans are short term in nature, unsecured and non-interest bearing. Also, at December 31, 2007 the Predecessor has $12,153 of long-term, unsecured and non-interest bearing loans from shareholders.

13

NOTE 10-NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted income per share for the periods indicated:

	Yongye International, Inc.			Yongye International, Inc.
	and Subsidiaries			and Subsidiaries
	FOR THREE MONTHS ENDED			FOR NINE MONTHS ENDED
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2008
	(Restated - Note 1(C))			(Restated - Note 1(C))
Numerator used in basic net income per share:
Net income	$	8,089,596		$	13,677,458
Change in fair value of derivative liabilities		(3,618,579	)		(1,464,256	)
Numerator used in diluted net income per share		4,471,017			12,213,202
Shares (denominator):
Weighted average ordinary shares outstanding		21,594,470			17,194,563
Plus: weighted average incremental shares from assumed exercise of warrants		1,213,286			505,184
Weighted average ordinary shares outstanding used in computing diluted net income per ordinary share		22,807,756			17,699,747
Net income per ordinary share-basic	$	0.37		$	0.80
Net income per ordinary share-diluted	$	0.20		$	0.69

NOTE 11 - -CONCENTRATIONS AND CREDIT RISKS

Five major customers accounted for 99% and one major customer accounted for 65% of the Company’s net revenue for the three months period ended September 30, 2008. Five major customers accounted for 97% and one major customer accounted for 41% of the Company’s net revenue for the nine months period ended September 30, 2008. Five major customers accounted for 72% and one major customer accounted for 22% of the Predecessor’s net revenue for the three months period ended September 30, 2007. Five major customers accounted for 81% and one major customer accounted for 40% of the Predecessor’s net revenue for the nine months period ended September 30, 2007. The Company and the Predecessor’s total sales to five major customers were $18,091,398 and $1,895,663, for the three months period ended September 30, 2008 and 2007, respectively. The Company and the Predecessor’s total sales to five major customers were $43,766,085 and $8,716,457, for the nine months period ended September 30, 2008 and 2007, respectively.

14

Yongye International, Inc.

THREE MONTHS ENDED SEPTEMBER 30, 2008						NINE MONTHS ENDED SEPTEMBER 30, 2008
			% Total						% Total
Largest Customers	Amount of Sales		Sales			Largest Customers	Amount of Sales		Sales
Hebei	$	11,824,157		65	%	Hebei	$	18,697,216		41	%
Xinjiang	$	3,834,862		21	%	Xingjiang	$	13,108,763		29	%
Inner Mongolia	$	1,158,951		6	%	Gansu	$	5,633,389		13	%
Shandong	$	639,144		4	%	Inner Mongolia	$	4,708,453		10	%
Gansu	$	634,284		3	%	Shandong	$	1,618,264		4	%
Total	$	18,091,398		99	%	Total	$	43,766,085		97	%

The Predecessor

Inner Mongolia Yongye

THREE MONTHS ENDED SEPTEMBER 30, 2007						NINE MONTHS ENDED SEPTEMBER 30, 2007
Largest			% Total				Amount of		% Total
Customers	Amount of Sales		Sales			Largest Customers	Sales		Sales
Hebei	$	582,536		22	%	Xinjiang	$	4,266,516		40	%
Gansu	$	511,567		19	%	Hebei	$	1,833,983		17	%
Xinjiang	$	468,850		18	%	Dalian	$	1,295,166		12	%
Inner Mongolia	$	214,212		8	%	Inner Mongolia	$	816,336		8	%
Jiangsu	$	118,498		5	%	Gansu	$	504,456		5	%
Total	$	1,895,663	72		%	Total	$	8,716,457		81	%

The Predecessor is the Company’s only vender who provided 100% of the Company purchased finished goods for the three months period and nine months period ended September 30, 2008. The Predecessor had four major vendors who provided 100% of its raw materials for the three months period ended September 30, 2007. The Predecessor had four major vendors who provided94% of its raw materials for the nine months period ended September 30, 2007. Total purchases from these vendors were $5,789,832 for the three months period ended September 30, 2007 and $7,892,577 for the nine months period ended September 30, 2007.

The Company and the Predecessor’s operations are carried out in the PRC. Accordingly, the Company and the Predecessor’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

15

Item 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. Yongye International, Inc. (f/k/a Yongye Biotechnology International, Inc.) is referred to herein as “we” or “our.” The words or phrases “would be,” “will allow,” “expect to” , “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements. Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including: (a) those risks and uncertainties related to general economic conditions in China, including regulatory factors that may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources”. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

Restatement of Financial Statements

Due to the complexities of placing the April 2008 Escrow Shares and September 2008 Escrow Shares into escrow and subsequently accounting for the performance measures and potential transfer of such shares, the Company believed and accounted for such shares as contingently issuable shares for purposes of calculating earnings per share and excluded such outstanding escrowed shares from the calculation of the weighted average number of common shares outstanding. However, after further examination subsequent to the original filing of our Form 10-Q for the period ended September 30, 2008 and it was determined that since the April 2008 Escrow Shares and September 2008 Escrow Shares are neither contingently cancellable nor contingently returnable to the Company, the shares should have been included in the denominator in computing the Company’s basic and diluted net income per share.

During the nine months ended September 30, 2008, the Company issued the “April Warrants”, “September Warrants” (“Investor Warrants”) and “Roth April Warrants”, “Roth September Warrants” (“Roth Warrants”). According to the terms of these warrants, the Company could be required to pay cash to the warrant holders under certain events that are not within the control of the Company. Specifically, upon the occurrence of certain “fundamental transactions” as defined, the warrant holders (but not the shareholders of the Company’s common stock) are entitled to receive cash equal to the value of the warrants to be determined based on an option pricing model and certain specified assumptions set forth in the warrant agreement. In accordance with Emerging Issues Task Force Issue (EITF) No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, such potential cash payments that are not within the Company’s control would preclude equity classification and therefore the warrants should have been classified as a liability and adjusted to fair value through earnings at each reporting date starting from the issuance date.

As a result, the amounts of $1,731,567 and $3,150,375 should have been recognized as derivative liabilities with fair value at issuance April 17, 2008 and September 5, 2008, respectively. The decrease in fair value of the warrants of $3,658,274 and $2,119,470 should have been recorded as a gain to earnings for the three months and nine months ended September 30, 2008, respectively.  In addition, since the Roth Warrants issued by the Company in April and September 2008 (see Note 8) also contains the “Fundamental Transactions”, such warrants should have been accounted for as a liability with changes in fair value also reported in earnings. Roth exercised these warrant during the three months ended September, 30, 2008 (see Note8). Accordingly, the increase in fair value of the Roth April Warrants from June 30, 2008 to the exercise date and the increase in fair value of the Roth September Warrants from the date of issuance through the exercise date of $39,694 should have been recorded as a charge to earnings for the three months ended September 30, 2008. The increase in fair value of the Roth April and September Warrants from issuance date to the exercise date of should have been recorded as a charge to earnings for the nine months ended September 30, 2008. These restatement adjustments had no impact on the Company’s previously reported income tax amounts because the profit or loss associated with these warrants for financial reporting purposes, as described herein, are not expected to result in future income tax consequences.

The correcting adjustments had no impact on the Company’s previously issued consolidated statement of cash flows for the nine months endedSeptember 30, 2008.

Company Overview

We are engaged in the development and distribution of fulvic acid based liquid and powder nutrient compounds used in the agriculture industry. Our headquarters is in Beijing, China and additional administrative offices and our manufacturing unit are located in Hohhot, Inner Mongolia, China. Currently, we sell two lines of products, both based on our fulvic acid compound base: a plant nutrition liquid compound and animal nutrition powder which is a food additive. Our products start with our proprietary fulvic acid base which is extracted from humic acid, and to which we add other natural substances to customize the base for use in our plant and animal product lines. Based on our internal data and research, we believe our proprietary technology for fulvic acid extraction creates some of the purest and most effective fulvic acid base on the market in China today. We have found that our fulvic acid has a very light weight molecular composition, which we believe improves the overall permeability of cell walls and allows more complete transport of nutrients across plant membranes, effectively strengthening the overall health of plants. We believe our proprietary process for extracting fulvic acid from humic acid and our patented process for mixing our plant nutrient and patent pending process for mixing our animal nutrient are key differentiators in the market and may help usprovide a high quality product that we can control from procurement of raw materials to final production, which we also believe may help our products to provide reliable and predictable results from season to season.

We are headquartered in Beijing, China and Inner Mongolia Yongye’s manufacturing plant is located in the Inner Mongolia province of China. Currently, we sell two lines of product based on our fulvic acid base: plant nutrition liquid compound and animal nutrition food additive. Our products start with our fulvic Acid base then, in addition, we add other natural substances to customize the base for use in our plant or animal lines of products. Our plant products are intended to add naturally occurring macro and micro nutrients such as nitrogen, phosphorus, potassium, boron and zinc. Our animal products add natural herbs which we believe may help to reduce bacterial inflammation (mastitis) in cows. It also assists many animals digest food more completely and thus; we thus believe that our animal products may help animals who use them to be healthier.

The financial statements we are reporting for 2007 are for our predecessor company, Inner Mongolia Yongye, which has now transferred all Shengmingsu related 2008 sales contracts and income, intellectual property and patents, and personnel, exclusive of manufacturing personnel, into the name of Yongye Nongfeng Biotechnology, the new Cooperative Joint Venture. After this transfer, Inner Mongolia Yongye became the primary contract manufacturing company for the new Cooperative Joint Venture and provided product at a cost plus price for the entire year of 2008. Inner Mongolia Yongye also kept the existing assets and long-term liabilities on its balance sheet.

16

Recent Development

On September 5, 2008, we entered into a securities purchase agreement (the “September Purchase Agreement”), with certain qualified institutional buyers (the “September Investors”), for the sale in a private placement of an aggregate of 6,073,006 shares of our Common Stock (the “September Investor Shares”), and the issuance of 1,518,253 warrants for aggregate gross proceeds equal to approximately $9,345,000 (the “September Offering”). In connection with the September Offering, we also entered into a registration rights agreement (the “September Registration Rights Agreement”) with the September Investors, in which we agreed to file a registration statement (the “September Registration Statement”) with the SEC to register for resale the September Investor Shares and the shares underlying the September Warrants, on or prior to 45 calendar days after the closing date of the September Offering, and use our best efforts to have the September Registration Statement declared effective within 150 calendar days of the closing date of the September Offering which we have completed and now our S-1 is effective.

Overview of 3rd Quarter

Demand for our products

One major tenet of the PRC government’s 11th Five-Year National Economic and Social Plan (the “NESDP”) (2006-2010) is the focus towards developing China’s western region.  This is one of the top-five economic priorities of the nation. The goal is to increase rural income growth which will in turn increase demand for more food and agriculture products. Currently, a large majority of our products are sold in this western region and we hope that this government focus will increase our opportunity to sell more plant and animal nutrients to farmers who have to keep up with the demand for higher quantity and higher quality of products.

 Supply of Finished Goods

Currently, we purchase our finished goods from our main supplier, Inner Mongolia Yongye, and then sell them through our distribution system. In order to generate greater profit margins, we set out to control our cost of goods sold and have put into place a fixed rate contract with our main supplier and this will extend over the next five years. Each quarter we will go through a review process with our supplier to adjust the fixed rate for the next quarter. We have not received any rate increases thus far in 2008.

Earthquake in Sichuan

The earthquake in Sichuan was a devastating event in the recent history of China. While the impact was felt all the way to Beijing, the disruption of business and the ensuing relief efforts were largely contained to the province itself and mainly to the areas nearest the epicenter. Because of this, the impact to our business was minimal. China’s Agriculture Minister Sun Zhengcai said in an interview with Xinhua that agriculture production would not be widely changed due to the earthquake in Sichuan primarily because the local output of the impacted area was quite small. He also mentioned that harvesting had been stepped up to ensure food security nationwide.

Seasonality

We typically face the seasonal demand patterns similar to other companies in our sector. In general, the first and fourth quarters are typically our slowest quarters and in 2008 we brought in approximately 20% and 6% of sales in these quarters. The second and third quarters drive the bulk of our overall sales with 36% and 38% respectively of the year’s net sales. Our Shengmingsu plant line faces the most seasonality of our two product lines with our Shengmingsu for animals experiencing less fluctuation during the year as a result of seasonal buying patterns. This year, while we did experience fluctuations by quarter of our animal line, we believe that this was due more in part to fluctuations in our sales and marketing efforts than due to seasonal buying patterns. We do not expect to face this type of revenue fluctuation for our animal product, which doesn’t typically experience the same seasonal tapering that our plant product faces.

17

Financial Highlights

	Yongye			The predecessor			Yongye			The predecessor
	International, Inc.			Inner Mongolia  Yongye			International, Inc.			Inner Mongolia  Yongye
	and Subsidiaries						and Subsidiaries
	(f/k/a Yongye Biotechnology International, Inc.)						(f/k/a Yongye Biotechnology International, Inc.)
	FOR THREE MONTHS ENDED			FOR THREE MONTHS ENDED			FOR NINE MONTHS ENDED			FOR NINE MONTHS ENDED
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			SEPTEMBER 30, 2008			SEPTEMBER 30, 2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(Restated – Financial Statement Note 1 (C))						(Restated – Financial Statement Note 1 (C))
SALES	$	18,202,940		$	2,625,137		$	45,189,579		$	10,752,855
COST		9,278,944			1,021,719			21,697,964			5,368,480
GROSS PROFIT		8,923,996			1,603,418			23,491,615			5,384,375
OPERATING EXPENSES		3,440,036			159,398			7,437,513			230,591
GENERAL AND ADMINISTRATIVE EXPENSES		453,683			196,386			1,265,808			351,372
INCOME FROM OPERATIONS		5,030,277			1,247,634			14,788,294			4,802,412
OTHER INCOME (EXPENSES)
Interest		65,785			-			66,563			1,291
Other income (expense)		(340,087	)		(81,827	)		(726,927	)		(279,468	)
Change in fair value of derivative liabilities		3,618,579			-			1,464,256			-
TOTAL OTHER INCOME (EXPENSES)		3,344,277			(81,827	)		803,892			(278,177	)
INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORTY INTEREST		8,374,554			1,165,807			15,592,186			4,524,235
PROVISION FOR INCOME TAXES		227,537			-			822,302			-
NET INCOME BEFORE MINORITY INTEREST		8,147,017			1,165,807			14,769,884			4,524,235
PROVISION FOR MINORITY INTEREST		57,421			-			1,092,426			-
NET INCOME		8,089,596			1,165,807			14,769,884			4,524,235
Foreign Currency Translation Adjustment		5,199			170,033			419,970			344,228
COMPREHENSIVE INCOME	$	8,094,795		$	1,335,840		$	14,097,428		$	4,868,463
Net income  per share:
Basic		0.37			N/A			0.80			N/A
Diluted		0.20			N/A			0.69			N/A
Weighted average shares used in computation:
Basic		21,594,470			N/A			17,194,563			N/A
Diluted		22,807,756			N/A			17,699,747			N/A

18

Strategies we are in the process of implementing include:

● Our increase in production capacity from 2,000TPA to 10,000TPA via our new 8,000TPA expansion gives us a 400% increase in capacity for the coming year. We intend to significantly deepen our penetration in current markets to strengthen our leadership position. We will continue to expand our distribution base and increase the capability of our distribution partners. This will enable us to continue to expand our current market share.

● We will also continue to increase the number of Branded Stores and provide on-going advertising, service and support to these stores so that they can increase their sales base, increase the pull of product through the distribution channels and strengthen our Brand Recognition province byprovince.

19

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2008 AND SEPTEMBER 30, 2007

Our business for the three months ended September 30, 2008 exceeded previous estimates and grew at 593% rate in sales over the same period in 2007. This demonstrated our ability to develop robust revenue growth in the first three quarters of 2008. This was primarily driven by higher volumes shipped through the third quarter. Numerous factors contributed to our strong growth: strong market demand, continued cost containment and steady pricing model, government policy support, industry growth, and sales and marketing leadership in our markets.

We believe that presenting a comparison of the results of our operations to our predecessor helps to provide a meaningful understanding of the underlying business since it enables a comparison of operations periodically. However, due to the transition from the predecessor to the Company that resulted in differences between our current operating model and our predecessor’s, the comparison of our information with the historical information of our predecessor might not be sufficient to be indicative of our future financial position, results of operations or cash flows. In particular, certain assets and liabilities of our predecessor differ significantly from our assets and liabilities.

The approximate 775 retail stores selling Shengmingsu products have been assembled into a network of stores through the work of our distributors. These stores have typically been in existence for many years and sell many other agriculture products including competitive products and we do not receive payment from the owner and they do not pay Yongye Nongfeng any fees or distribute any profits to us. Each distributor works to source successful, independently owned agricultural product stores to bring them into their segment of the branded store network. Our distributors work with the store owner to feature Yongye products in a prominent fashion and will also display brochures and advertisements for our products. Some stores will feature a computer which runs our current infomercials. Before the store is brought into the Branded Store network, it may be selling Yongye products as a “non-branded” store as arranged with our distributors. To become a “branded store” the distributor may require the store to go through a trials process to ensure the store reaches certain performance standards set by the distributor and the distributor will alone determine whether or not the store is considered a branded store. While we work with all of our distributors to standardize this model so that a minimum level of similarity is replicated across all the branded stores, it is implemented by the distributor.

The following table shows, for the periods indicated, information derived from our consolidated statements of income.

	THREE MONTHS ENDED
	Yongye			The predecessor
	International, Inc.			Inner Mongolia Yongye
	and Subsidiaries
	(f/k/a Yongye Biotechnology International, Inc.)
	FOR THREE MONTHS ENDED			FOR THREE MONTHS ENDED
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007
	(Unaudited)			(Unaudited)			Increase /(decrease)
	(Restated – Financial Statements Note 1 (C))
Net Sales	$	18,202,940		$	2,625,137			593	%
Gross Profit	$	8,923,996		$	1,603,418			457	%
Operating Income	$	5,030,277		$	1,247,634			303	%
Net Income	$	8,089,596		$	1,165,807			594	%
Gross Margins		49	%		61	%		-12	%
Net Margins		44	%		44	%		-
EPS- Basic	$	0.37			N/A			N/A
EPS- Diluted	$	0.20			N/A			N/A

Net Sales

Sales of $18,202,940 in the third quarter of 2008 was an increase of $15,577,803 from $2,625,137 in the same period in 2007, which was an overall increase of 593%. Our increased sales was primarily attributable to a 428% increase in total volume of units sold of both plant and animal products, up 147,512 to 182,009, over the previous three months ended September 30, 2007 figure of 34,497. This volume growth was driven by strong customer demand at our Branded Store level which resulted in strong pull through our distribution channels.

20

As of September 30, 2008, the receivable balance due from our five largest customers represented 96% of total accounts receivable, up 7% from 89% as compared to the corresponding period in 2007. We routinely extend unsecured credit to our major customers with good credit histories. Management reviews its accounts receivable on a regular basis to determine if the allowance for doubtful accounts is adequate at each quarter-end. We have not seen any accounts receivable go uncollected beyond 180 days or experienced any write-off of accounts receivable in the past. Thus, we elected not to make any provision for doubtful accounts and consider all accounts receivable collectable.

21

Our financial position at quarter ended September 30, 2008 (unaudited) and the year ended December 31,2007:

			Predecessor
	Yongye Nongfeng		Inner Mongolia
			Yongye
	SEPTEMBER 30, 2008		DECEMBER 31, 2007		Increase
	(Unaudited)				/(decrease)
Cash	$	6,847,558	$	376,002		1,721	%
Accounts receivable, net	$	20,678,867	$	1,630,609		1,168	%
Fixed assets, net	$	3,386,463	$	2,486,487		36	%
Total assets	$	35,564,319	$	23,131,656		54	%
Short-term bank loan		-	$	5,484,000		-100	%
Long-term liabilities	$	204,962	$	12,153		1,587	%
Total stockholders’ equity	$	27,754,191	$	12,911,472		115	%

We increased our cash position to $6,847,558 at the end of September 30, 2008 from $376,002 at the end of December 31, 2007, which is an overall increase of $6,471,556, or 1,721%. This was primarily due to increased cash sales, collections of accounts receivable, and the recent PIPE transaction on September 5, 2008. Accounts receivable increased by 1,168% to $20,678,867 as of September 30, 2008 from $1,630,609 as of December 31, 2007 due to increased growth in sales for the current period. Property, plant and equipment increased to $3,386,463 at September 30, 2008 from $2,486,487 at December 31, 2007, which was a 36% increase and was largely due to Construction In Process (CIP) related to the 8,000TPA facility under construction in the third quarter. Additionally, shareholders’ equity increased by $14,842,718 to $27,754,190 as of September 30, 2008, which is an overall 115% increase compared to $12,911,472 on December 31, 2007, and was due primarily to the influx of our two PIPE transactions on April 17, 2008 and September 5, 2008.

Sales Revenue and Gross Profit

	THREE MONTHS ENDED
					Predecessor
		Yongye Nongfeng			Inner Mongolia
					Yongye
		SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			Increase/
		(Unaudited)			(Unaudited)			(Decrease)
Sales		$	18,202,940		$	2,625,137			593	%
Gross Profit		$	8,923,996		$	1,603,418			457	%
Gross Margin			49	%		61	%		-12	%

Sales revenue increased by $15,577,803 to $18,202,940 in the period ended September 30, 2008 from $2,625,137 in the same period ended September 30, 2007 which is a 593% increase overall. Gross Profit also increased 457% over the prior period, which is an increase from $1,603,418 to $8,923,996 or $7,320,578 over the prior period. There was an overall decrease of 12% in gross margin in the period ended September 30, 2008 compared to the same period ended September 30, 2007 which saw the Predecessor earn 61%. This was primarily due to substantial discounts given to valued distributors in the quarter.

The number of independently owned stores brought into our branded store network grew to 775 in the period ended September 30, 2008 from 200 in the same period ended September 30, 2007, which was an increase of 288%. This was due in large part to continued growth of the network throughout the third quarter of 2008.

Additionally, Yongye Nongfeng was not required pay VAT for the plant products sold, which increased its gross sales in 2008, whereas Inner Mongolia Yongye paid VAT for all products sold in 2007, which led to an approximate 4% decrease in gross sales. Once the product is recognized by the tax bureau as belonging in the agricultural fertilizer category, it is exempted from VAT taxation for all its future sales. Under the PRC taxation law, our product is categorized as an agricultural fertilizer and as such is exempted from VAT taxation. Our plant product was recognized by the tax bureau as agricultural fertilizer in 2008, so Yongye Nongfeng did not pay VAT for it. We expect this trend will continue as long as Yongye sells plant products.

22

THREE MONTHS ENDED
		The Predecessor
		Inner Mongolia
	Yongye Nongfeng	Yongye
	SEPTEMBER 30, 2008	SEPTEMBER 30, 2007	Increase
Number of Branded Stores	775	200	288%

Our number of branded stores grew to 775 in the period ended September 30, 2008 from 200 in the same period ended September 30, 2007 which was an increase of 288%.

Sales by Product Line

THREE MONTHS ENDED
								The Predecessor
								Inner Mongolia
	Yongye International, Inc.							Yongye
	SEPTEMBER 30, 2008							SEPTEMBER 30, 2007
	Units Shipped		Total Sales		% of Total Sales			Units Shipped		Total Sales		% of Total Sales
Animals		512	$	17,931		0.10	%		20,350	$	672,383		25.61	%
Plant		181,497	$	18,185,009		99.90	%		14,147	$	1,952,754		74.39	%
Total		182,009	$	18,202,940		100.00	%		34,497	$	2,625,137		100.00	%

Sales of animal product decreased in this period ended September 30, 2008 to 512 from 20,350 in the same period ended September 30, 2007. Sales of plant product increased to 181,497 for the three months ended September 30, 2008 from 14,147, which is an 1183% increase over the same period ended September 30, 2007.

Customers

Five major customers accounted for 99% and one major customer accounted for 65% of the Company’s net revenue for the three months period ended September 30, 2008. Five major customers accounted for 72% and one major customer accounted for 22% of the Predecessor’s net revenue for the three months period ended September 30, 2007. The Company and the Predecessor’s total sales to five major customers were $18,091,398 and $1,895,663, for the three months period ended September 30, 2008 and 2007, respectively.

Cost of Sales

	THREE MONTHS ENDED
	Inner Mongolia			The Predecessor
	Yongye Nongfeng			Inner Mongolia
				Yongye Biotechnology
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			Change
	(Unaudited)			(Unaudited)
Cost of Sales		9,278,944			1,021,719			808	%
Percentage of Sales		51	%		39	%		12	%

23

Cost of sales increased in the recent period ended September 30, 2008 by $8,257,225 to $9,278,944 from $1,021,719 in the same period ended September 30, 2007. This is an 808% increase over the previous period and was due to the overall increase in sales as noted above. Cost of sales as a percentage of net sales increased over this quarter ended September 30, 2008 to 51% from 39% in the previous period ended September 30, 2007, and this 12% change was primarily due to the fixed rate fee charged by our dedicated supplier which included a financing mark-up which the predecessor company did not include in its cost structure in the previous period. Additionally, due to increased handling costs and discounts given to our key distributors in this period ended September 30, 2008, the margin between sales and cost of sales decreased as compared to the same period ended September 30, 2007.

Selling, General and Administrative Expenses

	THREE MONTHS ENDED
	Inner Mongolia			Predecessor
	Yongye Nongfeng			Inner Mongolia
				Yongye Biotechnology
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			Change
	(Unaudited)			(Unaudited)
Selling, General and Administrative Expenses	$	3,893,719		$	355,784			994	%
Percentage of Sales		21	%		14	%		7	%

Selling, general and administrative (“S,G&A”) expenses increased by $3,537,935 to $3,893,719 in the period ended September 30, 2008 from $355,784 in the previous period in 2007, which is a 994% change. As a percentage of Sales for this period ended September 30, 2008, SG&A increased 7% to 21% as compared to 14% in the period ended September 30, 2007. This increase in overall percentage of sales was due to increased advertising of $2,347,780 in the period which is an increase of $2,343,780, salaries of $235,385 in the period which is an increase of $120,265 and freight costs of $602,066 in the period which is an increase of $580,980.  While the predecessor company did have a similar cost structure to Yongye Nongfeng, it was expansive much smaller business with a smaller staff, market size and shipping requirements. This is especially true in the area of freight, where the number of provinces has now increased to 10 in this period ended September 30, 2008 from 4 in the previous period ended September 30, 2007.

Gain on change in fair value of derivative liabilities

The Company has accounted for warrants issued to investors and Roth in April Offering and September Offering in year 2008 as liability measured at fair value. The change in their fair value during the three months ended September 30, 2008 added to Consolidated Statement of Income of a gain of $3,618,579. No such gain was recognized for the three months ended September 30, 2007, as the Predecessor Company did not issue any such security during the year 2007. In addition, the gain recognized for the three months ended June 30, 2008 was due to the significant decrease of our stock price at September 30, 2008 ($2.00) compared to that at June 30, 2008 ($3.50) and September 5, 2008 ($3.75).

Income Tax

The Company did not carry on any business and did not maintain any branch office in the United States during the three months ended September 30, 2008 and 2007 and does not intend to repatriate any earnings from the Chinese operations. Therefore, no provision for withholding or U.S. federal income taxes or tax benefits on the undistributed earnings and/or losses of the Company has been made.

The Predecessor is subject to PRC Enterprise Income Tax at a rate of 33% of net income before year 2008 and 25% of the net income since January 1, 2008. Since the Predecessor is located in the economic development area in Inner Mongolia Autonomous Region, the Predecessor is exempt from income tax according to the tax law in China.

The Company’s Cooperative Joint Venture subsidiary, Yongye Nongfeng Biotechnology Co. (“Yongye Nongfeng ”), is subject to PRC Enterprise Income Tax at a rate of 25% of net income from its foundation on January 4, 2008 to March 31, 2008, and 1.25% of gross revenue since April 1, 2008.  The difference in tax rates occurred because, while the CJV was entitled to the “Check and Ratify” taxation method rate, and did apply for it, the CJV did not receive approval for such rate until the second quarter of 2008. Under the PRC taxation system, the enterprise income taxation is conducted on a quarter by quarter basis and, therefore, we were subject to the rate of 25% of net income for the full first quarter of 2008 and computed the tax at 1.25% of gross revenue for the remaining three quarters of 2008.

24

For the three months ended September 30, 2008, the Company’s income tax expense was $227,537 and income tax payable as of September 30, 2008 was $414,997 compared to $0 and $0 for the same period in 2007.

Net income

	THREE MONTHS ENDED
	Yongye Nongfeng Biotechnology			Predecessor
				Inner Mongolia
				Yongye
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			Increase/
	(Unaudited)			(Unaudited)			(Decrease)
Net income		8,089,596			1,165,807			594	%
Percentage of Sales		44	%		44	%		0	%

Net income for the period ended September 30, 2008 increased by $6,923,789 to $8,089,596 from $1,165,807 in the same period ended September 30, 2007, which is a 594% increase. However, this also represented a stable overall percentage of net income to sales of 44% in the period ended September 30, 2008 compared to 44% in September 30, 2007. This was primarily due to increased SG&A and cost of goods sold over the period, offset by the gain generated by change in fair value of derivative liabilities as described above.

Basic and diluted earnings per share (EPS) for the three months ended September 30, 2008, were $0.37 and $0.20, respectively. The weighted average shares outstanding used to calculate basic and diluted EPS for the periods were 21.6 million and 22.8 million, respectively.

Foreign Currency Translation Gains
  

The reporting currency of the Company is the US dollar (“USD”). We use our local currency, Renminbi (RMB), as our functional currency. Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate at the end of the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of shareholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The value of the USD versus the RMB continued to decline during the third quarter of 2008. As a result of the appreciation of the RMB, we recognized a foreign currency translation gain of $5,199 for the third quarter of 2008 compared to a gain of $170,033 for the same quarter last year. Given the uncertainty of exchange rate fluctuations, we cannot estimate the effect of these fluctuations on our future business, product pricing, and results of operations or financial condition.

Liquidity and Capital Resources
 

Inner Mongolia Yongye, the predecessor company, has historically financed its operations and capital expenditures principally through shareholder loans, bank loans, and cash provided by operations. As a newly formed Cooperative Joint Venture, Yongye Nongfeng, has used the net proceeds of both the April and September Offerings of approximately $20 million to finance the purchase of raw materials and finished inventory from Inner Mongolia Yongye, capital equipment and an expansion of our facilities and production, build out of our distribution network through advertising and marketing programs and their associated expenses, and increasing the number of our branded stores that distributors will do once they have more product available and more advertising coverage. We believe customers will increase, product will be pulled through the channels and distributors will penetrate the market with more branded stores to accommodate and spur sales growth.

As is customary in the industry, we provide payment terms to most of our distributors which typically exceed the terms that we ourselves receive from our finished goods suppliers.  We typically provide 90 day terms to our provincial level customers and ask for all others to make cash payments up front or upon delivery.  Therefore, the Company’s liquidity needs have generally consisted of working capital necessary to finance receivables and raw material inventory. We believe that over the next 12 months our existing cash, cash equivalents and cash flows from operations will be sufficient to meet our anticipated future cash needs. We may, however, require additional cash resources due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. We will determine how to meet these specific cash flow needs as they arise. Therefore, there can be no assurance that such additional investment will be available to us, or if available, that it will be available on terms acceptable to us. Cash and Cash Equivalents balance amounted to $6,847,558 and $1,532,713 as of September 30 2008 and the corresponding period of 2007, respectively.

 

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NINE MONTHS ENDED SEPTEMBER 30, 2008 AND SEPTEMBER 30, 2007

Nine Months Ended September 30, 2008 as compared to December 31, 2007
 

Working capital for the first nine months period ended September 30, 2008 increased by $22,994,508 to $25,650,298, as compared to $ 2,655,790 in the twelve month period ended December 31, 2007. While comparing working capital between the CJV and the predecessor company is not exactly comparing like items, we do it here to show the differences between the two business models. The changes in working capital over this nine month period are primarily due to a decrease in inventory of $ 7,791,256 due to the finished goods only nature of our business model, an increase in cash of $ 6,471,556 due significantly to our two financings, increased sales capability in the period, and a large accounts receivable increase of $ 19,048,258 due to larger sales volume.

The changes described above were generally due to the fact that our largest customers typically pay us 90 days after we ship products to them. Because we are constrained by the seasonal forces and the elongated payment terms of the agriculture industry, we slowly build up accounts receivable starting in the first quarter and more rapidly add to this throughout the peak season of the second and third quarter. As the end of the year approaches, we typically have had the ability to collect a great deal of our receivables so as to start the new year with a much lower balance.

Because of the seasonal nature of agriculture industry, the peak season for the sale of our product is in the second and third quarters of the year. We normally build up inventory in the first and fourth quarters to prepare for shipments to customers as they order product for the peak selling season in the second and third quarters. The significant increase in the balance of inventory we recently experienced was in line with this business practice. Additionally, we are in the process of increasing capacity from 2,000TPA to 10,000TPA in preparation for increased sales of the product which we expect to occur. We expect that we will maintain a similar balance in the future year ends.

Accounts receivable Days Sales Outstanding (“DSO”) is defined as average accounts receivable for the period divided by net sales per day and increased 68 days to 103 days from 35 days which is due to several large distributors going beyond the normal terms of their agreements. Days Sales in Inventory (“DIO”) is defined as average inventory in the period divided by the cost of sales per day and decreased to 13 days from 213 days due to our current business model focusing on the sales of finished goods which are shipped from the manufacturer to our customers.

Nine Months Ended September 30, 2008 as compared to September 30, 2007

NINE MONTHS ENDED
				Predecessor
	Yongye Nongfeng			Inner Mongolia
	Biotechnology			Yongye
							Increase
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2007			/(decrease)
	(Unaudited)			(Unaudited)
Net cash used in operating activities		(8,119,164	)		(3,569,434	)		127	%
Net cash used in investing activities		(3,616,091	)		(96,165	)		3,660	%
Net cash from financing activities		18,194,020			5,076,498			258	%
Effect of exchange rate change on cash and cash equivalents		380,656			32,791			844	%
Net increase in cash and cash equivalents		6,839,421			1,443,690			374	%
Cash and cash equivalents at beginning of period		8,137			89,023			(91	%)
Cash and cash equivalents at end of period		6,847,558			1,532,713			347	%

Net cash used in operating activities increased in the period ended September 30, 2008 by $4,549,730 to $8,119,164 from $3,569,434 at the end of the period September 30, 2007, which represents a 127% increase over the prior period. The increase of $4,549,730 between the periods was mainly brought about by changes as follows: an increase in accounts receivable of $19,511,908, a decrease in inventories of $3,164,792 and an increase in accounts payable and accrued expenses of $1,561,974, which were off-set by a change in net income of $10,245,649. Net cash used in investing activities increased to $3,616,091 from $96,165 mainly due to construction in progress of $2,891,425.

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Cash from financing activities in the period ended September 30, 2008 increased by 258% over the previous period’s amount of $5,076,498. This was due to the April and September Offerings which amounted to $19,450,651 and was offset by payments for stock issuance of $1,461,659. This is compared to the previous period ended September 30, 2007 where financing activities amounted to short-term bank loan proceeds of $4,251,841 and shareholder loan proceeds of $831,157.

	NINE MONTHS ENDED
				Predecessor
	Yongye Nongfeng			Inner Mongolia
	Biotechnology			Yongye
							Increase
	SEPTEMBER 30, 2008			SEPTEMBER 30,2007			/(decrease)
	(Unaudited)			(Unaudited)
Sales		45,189,579			10,752,855			320	%
Gross Profit		23,491,615			5,384,375			336	%
Income from Operations		14,788,294			4,802,412			208	%
Net Income		13,677,458			4,524,235			202	%
Gross Margins		52	%		50	%		2	%
Net Margins		30	%		42	%		-12	%

Net Sales

Sales revenue increased by $34,436,724 or 320%, to $45,189,579 for the nine months ended September 30, 2008 from $10,752,855 for the same period ended September 30, 2007. This can be attributed to our investment in our distribution channels and build up of Branded Stores which put more products in the hands of end users. We have increased the number of stores from inception in 2007 to 775 stores by September 30, 2008. The Company and the Predecessor’s total sales to our largest customers are as follows:

	THREE MONTHS ENDED										NINE MONTHS ENDED
						Predecessor										Predecessor
	Yongye Nongfeng					Inner Mongolia					Yongye Nongfeng					Inner Mongolia
	Biotechnology					Yongye					Biotechnology					Yongye
						SEPTEMBER 30,										SEPTEMBER 30,
	SEPTEMBER 30, 2008					2007					SEPTEMBER 30, 2008					2007
	%			Sales		%			Sales		%			Sales		%			Sales
5 Major Customers		99	%	$	18,091,398		72	%	$	1,895,663		97	%	$	43,766,085		81	%	$	8,716,457
1 Major Customer		65	%	$	11,824,157		22	%	$	582,536		41	%	$	18,697,216		40	%	$	4,266,516

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Gross Profit Margin

We achieved gross profit of $23,491,615 for the nine months ended September 30, 2008, up $18,107,240, or 336%, from gross profit of $5,384,375 for the corresponding period in the prior year. Gross profit margin for nine months ended September 30, 2008 was 52%, up 2% from 50% as compared to the corresponding period in 2007. This resulted from the predecessor company having less control over the fluctuations in raw materials pricing which impacted the overall grossmargin.

Selling, General and Administrative Expenses

We incurred total SG&A expenses of $8,703,321 or 19%, of revenue, for the nine months ended September 30, 2008. As compared to the same period in 2007, this represents an increase of $8,121,358 or 1,396% , over SG&A expenses of $581,963 for the nine months ended September 30, 2007, which was 5.4% of revenue. Much of this increase is due to increased expenses for operating as a public company, hiring additional executive team members and increased advertising expenses which, due to the seasonal nature of our business, must be expended in the first and second quarters of 2008 in order to reach customers for the growing season starting early in the second quarter.

Gain on change in fair value of derivative liabilities

The Company has accounted for warrants issued to investors and Roth in April Offering and September Offering in year 2008 as liability measured at fair value. The change in their fair value during the nine months ended September 30, 2008 added to Consolidated Statement of Income of a gain of $1,464,256. No such gain was recognized for the nine months ended September 30, 2007, as the Predecessor Company did not issue any such security during the year 2007. In addition, the gain recognized for the nine months ended September 30, 2008 was due to the significant decrease of our stock price at September 30, 2008 ($2.00) compared to that at issuance date April 17, 2008 ($2.22) and September 5, 2008 ($3.75).

Net Income

Our net income was $13,677,458 or 30% of revenues, for this nine month period ended September 30, 2008. This was $9,153,223 or a 202% increase, over the same nine month period in 2007, which was $4,524,235 and 42% of revenue. The increase reflects continued expansion in sales revenue levels, continued strong demand for our products and sustained profitability. Decrease in overall net margin as a percent of sales of 12% in the nine months ended September 30, 2008 was due to higher costs of SG&A due to marketing costs, salaries and transportation as mentioned above.

Basic and diluted earnings per share (EPS) for the nine months ended September 30, 2008, were $0.80 and $0.69, respectively. The weighted average shares outstanding used to calculate basic and diluted EPS for the periods were 17.2 million and 17.7 million, respectively.

Impact of inflation

We are subject to commodity price risks arising from price fluctuations in the market prices of the raw materials. We have generally been able to pass on cost increases through price adjustments. However, the ability to pass on these increases depends on market conditions influenced by the overall economic conditions in China. We manage our price risks through productivity improvements and cost-containment measures. We do not believe that inflation risk is material to our business or our financial position, results of operations or cash flows at this time.

Related Party Transactions

The Predecessor is a 0.6% shareholder of the Company’s main operating subsidiary, Yongye Nongfeng, and is Yongye Nongfeng’s only vendor that provided $6,128,774 (100%) of the Company’s purchased finished goods for the three months period ended September 30, 2008 and $23,597,523 for the nine months period ended September 30, 2008. As of September 30, 2008, due from related party represents the prepayment the Company made to the Predecessor as of September 30, 2008 for future purchases of inventory from the Predecessor. According to the contract, the Predecessor sells to us at fixed prices of RMB 350 per case for plant products and RMB 120 per case for animal products.

As of September 30, 2008, the Company has borrowed $1,636,282 from Ms. Yin, the wife of CEO Mr. Zishen Wu of Inner Mongolia Yongye Nongfeng, and $10,000 from a director of the Company, Kim McElroy. These funds are interest free with no specific terms of repayment. As of December 31, 2007, the Predecessor had borrowed $2,507,371 from stockholders. These loans are short term in nature, unsecured and non-interest bearing. Also, at December 31, 2007 the Predecessor had $12,153 of long-term, unsecured and non-interest bearing loans from shareholders.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as defined by standards issued by the Financial Accounting Standards Board, and accordingly, no such arrangements are likely to have a current or future effect on our financial position, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Item 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of the quarterly report on Form 10-Q/A for the quarter ended September 30, 2008, we carried out a re-evaluation of the effectiveness of our disclosure controls and procedures, which are defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act of 1934 (the “Act”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this re-evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2008 because of the material weakness described under “Management’s Report on Internal Control over Financial Reporting” in our amended Annual Report on Form 10-K/A filed with the SEC on November 9, 2009.

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Changes in Internal Controls over Financial Reporting

Except as otherwise discussed herein, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Act that occurred during the quarter ended September 30, 2008 that has materially affected, or is reasonably likely to materially, affect, our internal control over financial reporting.

30

ITEM 6           EXHIBITS

Exhibit No.	Description
31.1	Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

31

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Yongye International, Inc.
Dated: November 9, 2009	By:	/s/ Zishen Wu
	Name: Zishen Wu
	Title: Chief Executive Officer and President
	By:	/s/ Sam Yu
	Name: Sam Yu
	Title: Chief Financial Officer

32

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Rule 13A-14(A)/15D-14(A)

of the Securities Exchange Act of 1934

1. I have reviewed this quarterly report on Form 10-Q/A for the period ended September 30, 2008 of Yongye International, Inc.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;

(b) designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 9, 2009	By:	/s/ Zishen Wu
		Zishen Wu
		President and CEO (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Principal Financial OfficerPursuant to Rule 13A-14(A)/15D-14(A)of the Securities Exchange Act of 1934

I, Sam Yu, certify that:

1.  I have reviewed this quarterly report on Form 10-Q/A for the period ended September 30, 2008 of Yongye International, Inc.

2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.  Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 9, 2009	By:	/s/ Sam Yu
		Sam Yu
		Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350 AND EXCHANGE ACT RULES 13a-14(b) AND 15d-14(b)

(Section 906 of the Sarbanes-Oxley Act of 2002)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Yongye International, Inc. (the “Company”), does hereby certify, to such officer's knowledge, that:

The Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2008 of the Company fully complies, in all material respects, with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 9, 2009	By:	/s/ Zishen Wu
		Zishen Wu
		President and CEO
Dated: November 9, 2009	By:	/s/ Sam Yu
		Sam Yu
		Chief Financial Officer