Youxin Technology confirmed that Nasdaq has formally notified the company that its share price is below the $1 minimum bid‑price threshold and that its market‑value‑of‑listed‑securities (MVLS) falls short of the $35 million floor required for continued Capital‑Market listing. In its filing the company said it is working a two‑pronged remediation plan:
Reverse‑stock‑split – Youxin has hired counsel to prepare a shareholder‑approved reverse split (the size has not been disclosed but similar Nasdaq delistings typically use a 1‑for‑5 to 1‑for‑10 ratio). The split will proportionally lift the quoted price, bringing it back above $1 and simultaneously increasing the MVLS calculation (since MVLS = share price × shares outstanding). The company expects to file the split proposal with the SEC within the next 30 days and to have the transaction effective before the Nasdaq compliance deadline (generally 180 days from the notice).
Equity‑raising / cash infusion – Parallel to the split, Youxin is pursuing a private placement of newly issued shares to strategic investors and existing shareholders, targeting $15‑$20 million of net proceeds. The capital raise will be used to shore up working‑capital, accelerate its SaaS/PaaS pipeline and, crucially, boost the MVLS metric once the funds are reflected in the market‑cap calculation. The company also said it is evaluating cost‑reduction initiatives and will accelerate revenue‑generation projects (e.g., new enterprise contracts in China) to sustain a higher share price post‑split.
Trading implications: Until the split and financing are confirmed, the stock is likely to remain under pressure, with heightened volatility and a possible short‑squeeze risk if the reverse split is announced at a price near the $1‑level. Traders should watch for a Form 8‑K filing (usually within the next 2‑3 weeks) that details the split ratio, shareholder vote timing, and the private placement terms. If the split is approved and the raise is priced favorably, the bid price could jump 5‑10 % on news, offering a short‑term buying opportunity for risk‑tolerant investors. Conversely, failure to complete either remediation step before Nasdaq’s final compliance deadline would likely trigger a delisting, making the stock a candidate for a sharp sell‑off and potential OTC migration. Position sizing should reflect this binary outcome.