Youxin Technology Ltd Reports Financial Results for Fiscal Year 2024

Youxin Technology Ltd (Nasdaq: YAAS) (the “Company” or “Youxin Technology”), a software as a service (“SaaS”) and platform as a service (“PaaS”) provider committed to helping retail enterprises digitally transform their businesses, today announced its financial results for the fiscal year ended September 30, 2024.

Mr. Shaozhang Lin, Chief Executive Officer of Youxin Technology Ltd, commented, “The past year underscores our diligent strategic adjustments and significant efforts to enhance operational efficiency amid macroeconomic headwinds and challenges in China. We successfully improved our gross margins by 5% to 66% overall in fiscal year 2024 from 61% in fiscal year 2023, despite a decline in revenue due to our strategic shift from developing the customized CRM systems toward developing and marketing our third-generation PaaS platform. As PaaS products generally feature more functionalities in contrast to the more hands-on personnel efforts required for customized CRM development services, we managed to reduce operating expenses and increase efficiency. This improvement reflects better cost control, reduced focus on less profitable service lines, and a pivot toward an upgraded portfolio of solutions. Overall, we reduced our net loss by 45.3%, from $2.34 million in fiscal year 2023 to $1.28 million in fiscal year 2024, while maintaining adequate cash reserves to support product development and strategic execution. We remain optimistic about the growth potential and profitability outlook of our third-generation PaaS platform, which is poised for significant enhancements through AI integration in 2025.”

Mr. Lin continued, “Looking ahead, we are confident that our strategic shift, supported by substantial investment, positions us for a turnaround and long-term growth. Our prudent planning, disciplined management, and strict cost controls will further enhance our operational efficiency and financial stability, ultimately delivering long-term value for the Company and our shareholders.”

Fiscal Year 2024 Financial Overview

— Revenue was $521,241 in fiscal year 2024, compared to $895,978 in fiscal year 2023.

— Gross profit was $341,593 in fiscal year 2024, compared to $543,302 in fiscal year 2023.

— Gross margin was 66% in fiscal year 2024, an increase from 61% in fiscal year 2023.

— Net loss was $1.3 million in fiscal year 2024, compared to $2.3 million in fiscal year 2023.

Fiscal Year 2024 Financial Results

Revenues

Total revenues were $521,241 in fiscal year 2024, or a decrease of 42% from $895,978 in fiscal year 2023.The decrease was mainly because the Company gradually reduced operating the customized CRM system development services.

For the years ended September 30, 2024 2023($) Revenue Cost of Gross Revenue Cost of Gross Revenue Margin Revenue MarginProfessional 275,314 158,880 42 % 548,822 318,439 42 %servicesPayment channel 206,526 – 100 % 291,643 – 100 %servicesOthers 39,401 20,768 47 % 55,513 34,237 38 %Total 521,241 179,648 66 % 895,978 352,676 61 %

Revenue from professional services was $275,314 in fiscal year 2024, or a decrease of 50% from $548,822 in fiscal year 2023.

— The Company did not generate revenue from customized CRM system development services in fiscal year 2024. Revenue from customized CRM system development services was $134,768 in fiscal year 2023. The decrease was mainly due to the Company gradually reducing operating Customized CRM system development service.

— Revenue from the additional function development services was $42,758 in fiscal year 2024, or a decrease of 73% from $155,904 in fiscal year 2023. The decrease was mainly due to the less new needs of the function development from the existing clients for fiscal year 2024.

— Revenue from subscription services was $232,556 in fiscal year 2024, or a decrease of 10% from $258,150 in fiscal year 2023. The decrease was mainly due to the decreasing customized CRM system development services from 2023, which led to the Company to provide less subscription service in the following periods.

Cost of Revenues

Cost of revenues was $179,648 in fiscal year 2024, a decrease of 49% from $352,676 in fiscal year 2023.

Gross Profit

Gross profit was $341,593 in fiscal year 2024, compared to $543,302 in fiscal year 2023.

Gross margin was 66% in fiscal year 2024, an increase from 61% in fiscal year 2023.

Operating Expenses

Operating expenses were $1.7 million in fiscal year 2024, compared to $3.0 million in fiscal year 2023.

— Selling expenses were $94,481 in fiscal year 2024, a decrease of 58% from $225,926 in fiscal year 2023. The decrease was mainly due to the decrease in headcount and salaries and welfare. The decrease of salaries and welfare by 59% was primarily due to a decrease in headcount and pay cuts for fiscal year 2024, compared to fiscal year 2023.

— General and administrative expenses were $496,006 in fiscal year 2024, a decrease of 16% from $589,372 in fiscal year 2023. The decrease was primarily due to a decrease in salaries and welfare of 46% compared to fiscal year 2023 as decrease in headcount and pay cuts.

— Research and development expenses were $1.1 million in fiscal year 2024, a decrease of 47% from $2.2 million in fiscal year 2023. The decrease was primarily attributed to the decrease in labor related costs including salary and welfare by 47% for fiscal year 2024 compared to fiscal year 2023. Payment made to Cloud Service and other related research and development costs decreased by 43% for fiscal year 2024, which was in line with the operating of business of reducing of CRM development services.

Other Income, Net

Total net other income was $113,367 in fiscal year 2024, compared to $81,360 in fiscal year 2023.

Net Loss

Net loss was $1.3 million in fiscal year 2024, compared to a net loss of $2.3 million in fiscal year 2023.

Basic and Diluted Loss per Share

Basic and diluted loss per share was $0.04 in fiscal year 2024, compared to $0.09 in fiscal year 2023.

Financial Condition

As of September 30, 2024, the Company had cash of $18,372, compared to $399,050 as of September 30, 2023.

Net cash used in operating activities was $728,066 in fiscal year 2024, compared to $2,310,183 in fiscal year 2023.

Net cash provided by investing activities was $360 in fiscal year 2024, compared to $815 in fiscal year 2023.

Net cash provided by financing activities was $431,390 in fiscal year 2024, compared to $484,878 in fiscal year 2023.

Recent Development

The Company's Class A ordinary shares began trading on the Nasdaq Capital Market on December 20, 2024 under the ticker symbol “YAAS.” On December 23, 2024, the Company completed its initial public offering (the “Offering”) of 2,300,000 Class A ordinary shares at a public offering price of US$4.50 per Class A ordinary share. The Company received aggregate gross proceeds of US$10.35 million from the Offering, before deducting underwriting discounts and other related expenses payable by the Company.

AboutYouxin Technology Ltd

Youxin Technology Ltd is a SaaS and PaaS provider committed to helping retail enterprises digitally transform their businesses using its cloud-based SaaS product and PaaS platform to develop, use and control business applications without the need to purchase complex IT infrastructure. Youxin Technology provides a customized, comprehensive, fast-deployment omnichannel digital solutions that unify all aspects of commerce with store innovations, distributed inventory management, cross-channel data integration, and a rich set of ecommerce capabilities that encompass mobile applications, social media, and web-based applications. The Company's products allow mid-tier brand retailers to use offline direct distribution to connect the management team, distributors, salespersons, stores, and end customers across systems, apps, and devices. This provides retailers with a comprehensive suite of tools to instantly address issues using real-time sales data. For more information, please visit the Company's website:https://ir.youxin.cloud.

Cautionary Note Regarding Forward-Looking Statements

The foregoing material may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation the Company's statements regarding the Company's product development and business prospects, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

For investor and media inquiries, please contact:

Youxin Technology Ltd. Investor Relations Department Email:ir@youxin.cloud

Ascent Investor Relations LLC Tina Xiao Phone: +1-646-932-7242 Email: investors@ascent-ir.com

YOUXINTECHNOLOGY LTDCONSOLIDATED BALANCE SHEETSAS OF SEPTEMBER 30, 2024 AND 2023(Expressed in U.S. dollars, except for the number of shares) September September 30, 2024 30, 2023ASSETSCURRENT ASSETSCash $ 18,372 $ 399,050Restricted cash 24,649 -Accounts receivable, net 176,607 233,481Prepaid expenses and other current assets 122,676 140,696Total current assets 342,304 773,227NON-CURRENT ASSETSProperty and equipment, net 3,948 11,696Deferred offering costs 478,108 117,215Operating lease right-of-use assets 123,170 85,662Other non-current assets 10,608 27,558Total non-current assets 615,834 242,131TOTAL ASSETS $ 958,138 $ 1,015,358LIABILITIESCURRENT LIABILITIESShort-term bank loan $ 323,472 $ 311,129Accounts payable 31,350 52,448Contract liabilities 215,768 166,628Amount due to related parties 1,067,119 274,836Operating lease liabilities – current 42,277 85,082Payroll payable 1,869,436 1,465,220Accrued expenses and other current liabilities 40,299 21,192Total current liabilities 3,589,721 2,376,535Operating lease liabilities – non-current 82,674 363Total non-current liabilities 82,674 363TOTAL LIABILITIES $ 3,672,395 $ 2,376,898COMMITMENTS AND CONTINGENCIES – -SHAREHOLDERS' DEFICITClass A ordinary shares, ($0.0001 par value, 400,000,000 shares 2,230 2,230authorized, 22,304,693 shares issued and outstanding as of September30, 2024 and 2023, respectively)Class B ordinary shares, ($0.0001 par value, 100,000,000 shares 895 895authorized, 8,945,307 shares issued and outstanding as of September 30,2024 and 2023, respectively)Share subscription receivables (3,125) (3,125)Additional paid-in capital 12,154,929 12,154,929Accumulated deficit (15,419,765) (14,139,104)Accumulated other comprehensive income 550,579 622,635Total shareholders' deficit (2,714,257) (1,361,540)TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 958,138 $ 1,015,358YOUXINTECHNOLOGY LTDCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSFOR THE YEARS ENDED SEPTEMBER 30, 2024, 2023 AND 2022(Expressed in U.S. dollars, except for the number of shares) 2024 2023 2022 Years Ended September 30, 2024 2023 2022REVENUES $ 521,241 $ 895,978 $ 1,277,066COST OF REVENUES (179,648) (352,676) (581,339)GROSS PROFIT 341,593 543,302 695,727OPERATING EXPENSESSelling expenses (94,481) (225,926) (934,744)General and administrative expenses (496,006) (589,372) (1,276,127)Research and development expenses (1,139,922) (2,152,602) (5,257,256)Total operating expenses (1,730,409) (2,967,900) (7,468,127)NET LOSS FROM OPERATIONS (1,388,816) (2,424,598) (6,772,400)OTHER INCOME, NETOther income 134,802 99,053 349,797Other expense (21,435) (17,693) (34,280)Total other income, net 113,367 81,360 315,517NET LOSS BEFORE TAXES (1,275,449) (2,343,238) (6,456,883)Income tax expense (5,212) – -NET LOSS (1,280,661) (2,343,238) (6,456,883)Accretion to redeemable preferred equity – (326,837) (605,659)Net loss attributable to ordinary shareholders (1,280,661) (2,670,075) (7,062,542)NET LOSS (1,280,661) (2,343,238) (6,456,883)Other comprehensive lossForeign currency translation (loss) income (72,056) (212,292) 895,745TOTAL COMPREHENSIVE LOSS $ (1,352,717) $ (2,555,530) $ (5,561,138)Basic and diluted loss per share $ (0.04) $ (0.09) $ (0.27)*Weighted average number of ordinary shares 31,335,616 28,204,585 25,931,452outstanding – basic and diluted

* Giving retroactive effect to the issuance of shares effected on April 21, 2023.

YOUXIN TECHNOLOGY LTDCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED SEPTEMBER 30, 2024, 2023 AND 2022(Expressed in U.S. dollars, except for the number of shares) 2024 2023 2022 Years Ended September 30 2024 2023 2022Cash flows from operating activitiesNet loss $ (1,280,661) $ (2,343,238) $ (6,456,883)Adjustments to reconcile net loss to cash used inoperating activities:Loss (gain) on disposal of property and equipment 572 (357) -Amortization of right-of-use assets 101,888 204,715 481,504Depreciation 6,816 12,293 14,717Credit loss provision 4,664 – -Loss from termination of right-of-use assets 183 369 -Changes in assets and liabilitiesAccounts receivable 52,210 94,595 (16,181)Prepaid expenses and other current assets 18,020 69,605 (87,583)Deferred contract costs – 30,192 (7,184)Other non-current assets 16,950 28,368 24,131Accounts payable (21,098) (14,007) 27,495Operating lease liabilities (100,073) (207,881) (507,521)Payroll Payable 404,216 102,096 1,040,790Accrued expenses and other current liabilities 19,107 (18,026) (4,532)Contract liabilities 49,140 (268,907) 217,491Net cash used in operating activities (728,066) (2,310,183) (5,273,756)Cash flows from investing activitiesPurchase of property and equipment – – (1,618)Proceeds from dispose of property and equipment 360 815 -Repayment from a related party – – 768,380Net cash provided by investing activities 360 815 766,762Cash flows from financing activitiesLoan from related parties 792,283 284,292 -Proceeds from short-term bank loan – 321,834 -Payment of deferred offering cost (360,893) (121,248) -Net cash provided by financing activities 431,390 484,878 -Effect of exchange rates on cash and cash equivalents (59,713) 5,194 (312,986)and restricted cashNet decrease in cash and cash equivalents and (356,029) (1,819,296) (4,819,980)restricted cashCash and cash equivalents at beginning of year 399,050 2,218,346 7,038,326Cash and cash equivalents and restricted cash at end $ 43,021 $ 399,050 $ 2,218,346of yearCash and cash equivalents 18,372 399,050 1,802,236Restricted cash 24,649 – 416,110Cash and cash equivalents and restricted cash at end 43,021 399,050 $ 2,218,346of yearCash paid for interest expenses $ 10,237 $ 257 $ -Cash paid for income tax $ – $ – $ -Supplemental disclosure of non-cash financingactivities:Accretion to redeemable preferred equity $ – $ 326,837 $ 605,659Exchange redeemable preferred equity with Class A $ – $ 12,154,929 $ -ordinary sharesOperating lease right-of-use assets obtained in exchange $ 140,844 $ – $ -for operating lease liabilities

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