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</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font: 1pt Times New Roman, Times, Serif; border-top: Black 2pt solid; border-bottom: Black 1pt solid"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></div></div><!-- Field: /Rule-Page --><div>

</div><p style="font-family: Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>UNITED
STATES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>SECURITIES
AND EXCHANGE COMMISSION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>WASHINGTON,
D.C. 20549</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>FORM
<ix:nonNumeric contextRef="c0" name="dei:DocumentType">20-F</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>(Mark
One)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:DocumentRegistrationStatement">&#9744;</ix:nonNumeric>
<b>STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:DocumentAnnualReport">&#9746;</ix:nonNumeric>
<b>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">For
the fiscal year ended <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:DocumentPeriodEndDate"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-en" name="dei:CurrentFiscalYearEndDate">December 31</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:DocumentFiscalYearFocus">2022</ix:nonNumeric></ix:nonNumeric>.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:DocumentTransitionReport">&#9744;</ix:nonNumeric>
<b>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:DocumentShellCompanyReport">&#9744;</ix:nonNumeric>
<b>SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Date
of event requiring this shell company report</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">For
the transition period from&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Commission
File Number: <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-38799</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><span style="-sec-ix-hidden: hidden-fact-0">SCIENJOY
HOLDING CORPORATION</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(Exact
name of Registrant as specified in its charter)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>N/A</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(Translation
of Registrant&#8217;s name into English)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:edgarprovcountryen" name="dei:EntityIncorporationStateCountryCode"><span style="font-family: Times New Roman, Times, Serif"><b>British
Virgin Islands</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(Jurisdiction
of incorporation or organization)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1">RM
1118, 11<sup>th </sup>Floor, Building 3, No. 99 Wangzhou Rd</ix:nonNumeric>., <ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine2">Liangzhu St</ix:nonNumeric>.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine3">Yuhang
District</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">Hangzhou</ix:nonNumeric>, Zhejiang Province, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressPostalZipCode">311113</ix:nonNumeric>,</b>&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><b>China</b></ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>(86)
0571 8858 6668</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(Address
of principal executive offices)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName"><span style="font-family: Times New Roman, Times, Serif"><b>Xiaowu
He</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Chief
Executive Officer</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1">RM
1118, 11<sup>th </sup>Floor, Building 3, No. 99 Wangzhou Rd</ix:nonNumeric>., <ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine2">Liangzhu St</ix:nonNumeric>.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine3">Yuhang
District</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown">Hangzhou</ix:nonNumeric>, Zhejiang Province, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressPostalZipCode">311113</ix:nonNumeric>,</b>&#160;<ix:nonNumeric contextRef="c1" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><b>China</b></ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><ix:nonNumeric contextRef="c1" name="dei:CityAreaCode">(86)</ix:nonNumeric>
<ix:nonNumeric contextRef="c1" name="dei:LocalPhoneNumber">0571 8858 6668</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Email:
<ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelEmailAddress">xiaowu.he@scienjoy.com</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">Securities
registered or to be registered pursuant to Section 12(b) of the Act:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 32%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Title of each class</b></span></td> <td style="font-family: Times New Roman, Times, Serif; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 32%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Trading Symbol</b></span></td> <td style="font-family: Times New Roman, Times, Serif; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 32%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name of each exchange on which registered</b></span></td></tr> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF"> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class A Ordinary shares, no par value</span></ix:nonNumeric></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:TradingSymbol"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SJ</span></ix:nonNumeric></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c0" format="ixt-sec:exchnameen" name="dei:SecurityExchangeName">Nasdaq</ix:nonNumeric> Capital Market</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Securities
registered or to be registered pursuant to Section 12(g) of the Act:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>None</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Class
A Ordinary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Warrants</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
the number of outstanding shares of each of the issuer&#8217;s classes of capital stock or common stock as of the close of business covered
by the annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b><ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">36,684,668</ix:nonFraction>
Class A ordinary shares and <ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">2,925,058</ix:nonFraction> Class B ordinary shares were issued and outstanding as of December&#160;31,&#160;2022.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule&#160;405 of the Securities Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9744;&#160;Yes&#160;&#160;&#160;&#160;&#160;&#9746;
<ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section&#160;13
or 15(d)&#160;of the Securities Exchange Act of 1934.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9744;&#160;Yes&#160;&#160;&#160;&#160;&#160;&#9746;
<ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note
    &#8211;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Checking
    the box above will not relieve any registrant required to file reports pursuant to Section&#160;13 or 15(d) of the Securities Exchange
    Act of 1934 from their obligations under those Sections.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant: (1)&#160;has filed all reports required to be filed by Section&#160;13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2)&#160;has been subject to such filing requirements for the past 90 days.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9746;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric>&#160;&#160;&#160;&#160;&#160;&#9744;
No</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (&#167;232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9746;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric>&#160;&#160;&#160;&#160;&#160;&#9744;
No</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a&#160;non-accelerated filer, or an emerging
growth company. See definition of &#8220;accelerated filer and large accelerated filer&#8221; and &#8220;emerging growth company&#8221;
in Rule 12b-2 of the Exchange Act. (Check one):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 25%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 22%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated file</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 22%; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated filer</span></ix:nonNumeric></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; width: 25%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company</span></td></tr> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top"> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></ix:nonNumeric></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards&#8224; provided
pursuant to Section&#160;13(a) of the Exchange Act. <ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8224;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    term &#8220;new or revised financial accounting standard&#8221; refers to any update issued by the Financial Accounting Standards
    Board to its Accounting Standards Codification after April 5, 2012.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant has filed a report on and attestation to its management&#8217;s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:IcfrAuditorAttestationFlag">&#9744;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font-family: Times New Roman, Times, Serif; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="-sec-ix-hidden: hidden-fact-1">U.S. GAAP</span></span></td> <td style="font-family: Times New Roman, Times, Serif; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; width: 76%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">International Financial Reporting Standards as issued by the International Accounting Standards Board</span></td> <td style="font-family: Times New Roman, Times, Serif; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other</span></td></tr> <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top"> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
&#8220;other&#8221; has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9744;&#160;Item
17&#160;&#160;&#160;&#160;&#160;&#9744;&#160;Item 18</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9744;
Yes&#160;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany">&#9746;</ix:nonNumeric> No</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">(APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d)&#160;of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#9744;
Yes&#160;&#160;&#160;&#160;&#160;&#9744; No</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></p><div>

</div><!-- Field: Rule-Page --><div style="font-family: Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font: 1pt Times New Roman, Times, Serif; border-top: Black 1pt solid; border-bottom: Black 2pt solid"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></p><div>

</div><!-- Field: Page; Sequence: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Table
of Contents</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td colspan="3" style="font: 10pt Times New Roman, Times, Serif"><a href="#b_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INTRODUCTION</b></span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>iii</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td colspan="3" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td colspan="3" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_003"><b>FORWARD-LOOKING
    INFORMATION</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>vii</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td colspan="3" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_004"><b>PART
    I</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 12%; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
    1.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 77%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_005"><b>IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
    2.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_006"><b>OFFER
    STATISTICS AND EXPECTED TIMETABLE</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
    3.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_007"><b>KEY
    INFORMATION</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_008">[Reserved]</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_009"><b>Capitalization
    and Indebtedness</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_010"><b>Reasons
    for the Offer and Use of Proceeds</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_011"><b>Risk
    Factors.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
    4.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_012"><b>INFORMATION
    ON THE COMPANY</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">45</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_013"><b>History
    and Development of the Company</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">45</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_014"><b>Business
    Overview</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">48</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_015"><b>Organizational
    Structure</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">83</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_016"><b>Property,
    Plants and Equipment</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
    4A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_017"><b>UNRESOLVED
    STAFF COMMENTS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
    5.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_018"><b>OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS </b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_019"><b>Operating
    Results</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_020"><b>Liquidity
    and Capital Resources</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">95</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_021"><b>Research
    and Development, Patents and Licenses, etc.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">97</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_022"><b>Trend
    Information</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">97</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_023"><b>Critical
    Accounting Estimates</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">97</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_024"><b>ITEM
    6.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_024"><b>DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_025"><b>Directors
    and Executive Officers</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_026"><b>Compensation
    of Directors and Executive Officers</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">107</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_027"><b>Board
    Practices</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">108</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_028"><b>Employees</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">109</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_029"><b>Share
    Ownership</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">109</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_030"><b>Disclosure
    of a Registrant&#8217;s Action to Recover Erroneously Awarded Compensation</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_031"><b>ITEM
    7.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_031"><b>MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_032"><b>Major
    Shareholders</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_033"><b>Related
    Party Transactions</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_034"><b>Interests
    of Experts and Counsel</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">116</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_035"><b>ITEM
    8.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_035"><b>FINANCIAL
    INFORMATION</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">116</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_078"><b>Consolidated
    Statements and Other Financial Information</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">116</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_079"><b>Significant
    Changes</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">116</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_036"><b>ITEM
    9.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_036"><b>THE
    OFFER AND LISTING</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_037"><b>Offer
    and Listing Details</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_038"><b>Plan
    of Distribution</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_039"><b>Markets</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_040"><b>Selling
    Shareholders</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_041"><b>Dilution</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_042"><b>Expenses
    of the Issue</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 3; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 12%; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_043"><b>ITEM
    10.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 77%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_043"><b>ADDITIONAL
    INFORMATION</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_044"><b>Share
    Capital</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_045"><b>Memorandum
    and Articles of Association</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">118</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_046"><b>Material
    Contracts</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">129</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_047"><b>Exchange
    Controls</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">129</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_048"><b>Taxation</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">129</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_049"><b>Dividends
    and Paying Agents</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>G.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_050"><b>Statement
    by Experts</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>H.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_051"><b>Documents
    on Display</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>I.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_052"><b>Subsidiary
    Information</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>J.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_053"><b>Annual
    Report to Security Holders</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_054"><b>ITEM
    11.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_054"><b>QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_055"><b>ITEM
    12.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_055"><b>DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_056"><b>Debt
    Securities</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_057"><b>Warrants
    and Rights</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_058"><b>Other
    Securities</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_059"><b>American
    Depositary Shares</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_060"><b>PART
    II</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">136</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_061"><b>ITEM
    13.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_061"><b>DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">136</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_062"><b>ITEM
    14.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_062"><b>MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">136</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_063"><b>ITEM
    15.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_063"><b>CONTROLS
    AND PROCEDURES</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">136</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_064"><b>ITEM
    16.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_064"><b>Reserved</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">137</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_065"><b>ITEM
    16.A.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_065"><b>AUDIT
    COMMITTEE FINANCIAL EXPERT</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">137</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_066"><b>ITEM
    16.B.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_066"><b>CODE
    OF ETHICS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">137</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_067"><b>ITEM
    16.C.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_067"><b>PRINCIPAL
    ACCOUNTANT FEES AND SERVICES</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">137</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_068"><b>ITEM
    16.D.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_068"><b>EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">138</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_069"><b>ITEM
    16.E.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_069"><b>PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">138</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_070"><b>ITEM
    16.F.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_070"><b>CHANGE
    IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">138</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_071"><b>ITEM
    16.G.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_071"><b>CORPORATE
    GOVERNANCE</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">139</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_072"><b>ITEM
    16.H.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_072"><b>MINE
    SAFETY DISCLOSURE</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">139</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_073"><b>ITEM
    16.I.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_073"><b>DISCLOSURE
    REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">139</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_074"><b>PART
    III</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">140</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_075"><b>ITEM
    17.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_075"><b>FINANCIAL
    STATEMENTS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">140</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_076"><b>ITEM
    18.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_076"><b>FINANCIAL
    STATEMENTS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">140</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_077"><b>ITEM
    19.</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#b_077"><b>EXHIBITS</b></a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">140</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 4; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->ii<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>INTRODUCTION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 7, 2020, Scienjoy Holding Corporation, formerly known as Wealthbridge Acquisition Limited (&#8220;Wealthbridge&#8221;), consummated
the transactions contemplated by the Share Exchange Agreement (the &#8220;Share Exchange Agreement&#8221;), dated as of October 28, 2019,
by and among Scienjoy Holding Corporation (&#8220;SHC&#8221;), formerly known as Wealthbridge Acquisition Limited, Scienjoy Inc., Lavacano
Holdings Limited (&#8220;Lavacano&#8221;), and WBY Entertainment Holdings Ltd. (&#8220;WBY&#8221;, together with Lavacano, the &#8220;Sellers&#8221;),
pursuant to which SHC acquired 100% the issued and outstanding equity interests of Scienjoy Inc. from the Sellers and changed its name
to Scienjoy Holding Corporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 5; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iii<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>USE
OF CERTAIN TERMS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
used in this annual report, unless the context otherwise requires, references to the terms &#8220;Company,&#8221; &#8220;we,&#8221; &#8220;us&#8221;
and &#8220;our&#8221; refer to Scienjoy Holding Corporation and, where applicable, our wholly-owned subsidiaries. Unless otherwise indicated
and except where the context otherwise requires, references in this annual report to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Active broadcasters&#8221;
    refers to the hosts perform live music, dancing and other entertaining performance in front of the audience through the screens on
    the mobile platform;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;active users&#8221;
    refers to users who visited our platforms at least once in a given period;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;ARPPU&#8221; refers
    to average live streaming revenue per paying user in a given period;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;BeeLive Acquisition&#8221;
    refers to the Company&#8217;s acquisition of the BeeLive businesses and related transactions;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Business Combination&#8221;
    refers to the Company&#8217;s acquisition of Scienjoy Inc. on May 7, 2020 and related transactions;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;CDN&#8221; refers
    to content delivery network;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;CDZH&#8221; refers
    to Chuangda Zhihui (Beijing) Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;CAGR&#8221; refers
    to compound annual growth rate;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;China&#8221; and
    the &#8220;PRC&#8221; refer to the People&#8217;s Republic of China, including Hong Kong and Macau;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Golden Shield&#8221;
    refers to Golden Shield Enterprises Limited;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Heshine&#8221; refers
    to Heshine Holdings Limited;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;HKD&#8221; refers
    to Hong Kong Dollar, the official currency of the Hong Kong Special Administrative Region;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Holgus X&#8221;
    refers to Holgus Sixiang Information Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Holgus H&#8221;
    refers to Holgus Sixiang Haohan Internet Technology Co., Ltd.;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Hong Kong&#8221;
    refers to the Hong Kong Special Administrative Region of the People&#8217;s Republic of China;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;HX&#8221; refers
    to Hai Xiu (Beijing) Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;HYDC&#8221; refers
    to Beijing Huayi Dongchen Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;HYHF&#8221; refers
    to HuaYuHeFeng (Qingdao) Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;HZ&#8221; refers
    to Sixiang Huizhi (Beijing) Technology Culture Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Kashgar Times&#8221;
    refers to Kashgar Sixiang Times Internet Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Kashgar Lehong&#8221;
    refers to Kashgar Sixiang Lehong Information Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Lavacano&#8221;
    refers to Lavacano Holdings Limited;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 6; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iv<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;LH&#8221; refers
    to Beijing Le Hai Technology Co., Ltd.;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Macau&#8221; refers
    to the Macau Special Administrative Region of the People&#8217;s Republic of China; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;MF&#8221; refers
    to Sixiang Mifeng (Tianjin) Technology Co., Ltd.;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;our PRC subsidiaries&#8221;
    refer to our WFOEs, i.e. Sixiang Infinite (Beijing) Technology Co., Ltd. (&#8220;WXBJ&#8221;), and Sixiang Infinite (Zhejiang) Culture
    Technology Co., Ltd. (&#8220;WXZJ&#8221;), Scienjoy International Limited, and Scienjoy BeeLive Limited and their respective subsidiaries.
    WXBJ&#8217;s subsidiaries &#160;include Sixiang Zhihui (Beijing) Technology Co., Ltd. (&#8220;ZH&#8221;), <span>Sixiang
    Yingyue (Shanghai) Technology Co., Ltd. (&#8220;SXYY&#8221;), </span>Holgus Sixiang Information Technology Co., Ltd. (&#8220;Holgus
    X&#8221;), Kashgar Sixiang Times Internet Technology Co., Ltd. (&#8220;Kashgar Times&#8221;), Kashgar Sixiang LeHong Information
    Technology Co., Ltd. (&#8220;Kashgar Lehong&#8221;), Sixiang ZhiHui (HaiNan) Investment (&#8220;ZHHN&#8221;), and Holgus Sixiang
    Haohan Internet Technology Co., Ltd. (&#8220;Holgus H&#8221;), WXZJ&#8217;s subsidiary includes Sixiang Zhihui (Zhejiang) Culture
    Technology Co., Ltd. (&#8220;ZHZJ&#8221;);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;paying user&#8221;
    refers to a registered user that has purchased virtual currency on our platforms at least once during the relevant period;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;paying ratio&#8221;
    for a given period is calculated by dividing (i) the sum of paying users in such period, by(ii) the total active users in such period;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Purchase Agreement&#8221;
    refers to Common Stock Purchase Agreement, entered between the Company and White Lion Capital on February 23, 2021;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;QAU&#8221; refers
    to the number of active users in a given quarter;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#8220;QY&#8221; or &#8220;Zhihui Qiyuan&#8221; refers to Zhihui Qiyuan (Beijing) Technology Co., Ltd.;</span></p>
                                                                                <p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;QYHN&#8221; refers
    to ZhiHui Qiyuan (Hainan) Investment Co., Ltd.;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;QYHZ&#8221; or &#8220;Sixiang
    Qiyuan&#8221; refers to Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;registered user&#8221;
    refers to a user that has registered and logged onto our platform at least once since registration;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;RMB&#8221; or &#8220;Renminbi&#8221;
    refers to the legal currency of the People&#8217;s Republic of China;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Scienjoy HK&#8221;
    refers to Scienjoy International Limited;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SG&#8221; refers
    to Beijing Sixiang Shiguang Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Share Exchange Agreement&#8221;
    refers to the Share Exchanged Agreement, dated October 28, 2019, by and among Scienjoy Inc., the Company, Lavacano Holdings Limited,
    and WBY Entertainment Holdings Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SH&#8221; refers
    to ShiHuai (Beijing) Technology Co. Ltd.;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SHC&#8221; refers
    to Scienjoy Holding Corporation, a British Virgin Islands holding company;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SHWL&#8221; refers
    to ShanHaiWeiLan (Beijing) Technology Co., Ltd.;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Sixiang Qiyuan VIEs&#8221;
    refer to Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. (&#8220;QYHZ&#8221;) and its subsidiaries, including Xiuli (Zhejiang)
    Culture Technology Co., Ltd. (&#8220;XL&#8221;), Leku (Zhejiang) Culture Technology Co., Ltd. (&#8220;LK&#8221;), Haifan (Zhejiang)
    Culture Technology Co., Ltd. (&#8220;HF&#8221;), Xiangfeng (Zhejiang) Culture Technology Co., Ltd. (&#8220;XF&#8221;) and Hongren
    (Zhejiang) Culture Technology Co., Ltd. (&#8220;HR&#8221;), each such company formed under PRC Laws;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SY&#8221; refers
    to Tianjin Sihui Peiying Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;TF&#8221; refers
    to Tongfang Investment Fund Series SPC;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;US$&#8221;, &#8220;USD&#8221;
    &#8220;dollars&#8221; or &#8220;U.S. dollars&#8221; refers to the legal currency of the United States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;U.S. GAAP&#8221;
    are to accounting principles generally accepted in the United States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;variable interest
    entity,&#8221; &#8220;VIEs&#8221; or &#8220;VIE entities&#8221; refer to the variable interest entities, including Zhihui Qiyuan
    VIEs and Sixiang Qiyuan VIEs.&#160;&#160;Each of the VIEs is consolidated into our consolidated financial statements in accordance
    with U.S. GAAP as if they were its wholly-owned subsidiaries;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 7; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->v<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;WBY&#8221; refers
    to WBY Entertainment Holdings Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Wealthbridge&#8221;
    refers to Wealthbridge Acquisition Limited;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;White Lion Capital&#8221;
    refers to White Lion Capital LLC;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;WLT&#8221; or &#8220;Weiliantong&#8221;
    refers to Beijing Weiliantong Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;WXBJ&#8221;&#160;refers
    to Sixiang Wuxian (Beijing) Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;WXZJ&#8221; refers
    to Sixiang Wuxian (Zhejiang) Culture Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;WFOEs&#8221; or
    &#8220;our WFOEs&#8221; refer to our wholly foreign owned entities in China, which include WXBJ and WXZJ;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;ZH&#8221; refers
    to Sixiang Zhihui (Beijing) Technology Co., Ltd.;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;ZHHN&#8221; refers
    to Sixiang Zhihui (Hainan) Technology Co., Ltd.; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;ZHZJ&#8221; refers
    to Sixiang Zhihui (Zhejiang) Culture Technology Co., Ltd; and </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Zhihui Qiyuan VIEs&#8221;
    refer to Zhihui Qiyuan (Beijing) Technology, Co., Ltd. and its subsidiaries, including Zhihui Qiyuan (Beijing) Technology, Co. Ltd.
    (&#26234;&#27719;&#21551;&#28304;(&#21271;&#20140;)&#31185;&#25216;&#26377;&#38480;&#20844;&#21496;) or Zhihui Qiyuan, a limited
    liability company organized and existing under the laws of the PRC, and Zhihui Qiyuan&#8217;s subsidiaries, including Hai Xiu (Beijing)
    Technology Company Co. Ltd. (&#8220;HX&#8221;), Beijing Le Hai Technology Co. Ltd. (&#8220;LH&#8221;), Beijing Sixiang Shiguang Technology
    Co. Ltd. (&#8220;SG&#8221;), Sixiang Mifeng (Tianjin) Technology Co., Ltd (formerly known as Tianjin Guangju Dingfei Technology Co.,
    Ltd.) (&#8220;MF&#8221;), Changxiang Infinite Technology (Beijing) Co., Ltd. (&#8220;CX&#8221;), ZhiHui QiYuan (HaiNan) Investment
    Co., Ltd. (&#8220;QYHN&#8221;),&#160;&#160;HuaYuHeFeng (Qingdao) Technology Co., Ltd. (&#8220;HYHF&#8221;), Beijing Weiliantong Technology
    Co., Ltd (&#8220;WLT&#8221;). Chuangda Zhihui (Beijing) Technology Co., Ltd (&#8220;CDZH&#8221;), Hongcheng Huiying (Zhejiang) Technology
    Industry Development Co., Ltd. (&#8220;HCHY&#8221;), and Beijing Huayi Dongchen Technology Co., Ltd. (&#8220;HYDC&#8221;), each such
    company formed under PRC Law.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Translations
of balances in our consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB
into USD (or &#8220;US$&#8221;) as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were
calculated at the rate of US$1.00 = RMB 6.8972, representing the noon buying rate in The City of New York for cable transfers of RMB
as certified for customs purposes by the Federal Reserve Bank of New York on the last trading day of December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">No
representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that
rate, or at any other rate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 8; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->vi<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>FORWARD-LOOKING
INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Certain
statements in this annual report may constitute &#8220;forward-looking statements&#8221; for purposes of the federal securities laws.
Our forward-looking statements include, but are not limited to, statements regarding our or our management team&#8217;s expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words
&#8220;anticipate,&#8221; &#8220;believe,&#8221; &#8220;continue,&#8221; &#8220;could,&#8221; &#8220;estimate,&#8221; &#8220;expect,&#8221;
&#8220;intends,&#8221; &#8220;may,&#8221; &#8220;might,&#8221; &#8220;plan,&#8221; &#8220;possible,&#8221; &#8220;potential,&#8221; &#8220;predict,&#8221;
&#8220;project,&#8221; &#8220;should,&#8221; &#8220;would&#8221; and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this annual report may
include, for example, statements about:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the goals and strategies
    of the VIEs and the Company as a whole;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the VIEs&#8217; ability
    to attract new users and talent to our platform;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the future business development,
    financial condition and results of operations of the VIEs and the Company as a whole; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the expected growth in,
    and market size of, the mobile live streaming platforms;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">expected changes in our
    revenue, costs or expenditures of the VIEs and the Company as a whole;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the VIEs&#8217; ability
    to continue to source and offer new and attractive products and services;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the expectations regarding
    demand for and market acceptance of our brands, platforms and services;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the expectations regarding
    growth in our user base and level of user engagement;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the VIEs&#8217; ability
    to attract, retain and monetize users;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the VIEs&#8217; ability
    to continue to develop new technologies and/or upgrade our existing technologies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">growth of and trends of
    competition in mobile live streaming industry;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">government policies and
    regulations relating to mobile live streaming industry; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">general economic and business
    conditions in the markets the VIEs have businesses.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
preceding list is not intended to be an exhaustive list of all of our forward-looking statements. In particular, for additional information
regarding known material factors that could affect our operating results and performance, please read the section entitled &#8220;Risk
Factors&#8221; in this annual report. Should one or more of the risks or uncertainties described in this annual report made in connection
therewith occur, or should underlying assumptions prove incorrect, actual results and plans could different materially from those expressed
in any forward-looking statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 9; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->vii<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>PART
I</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
3. KEY INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_008"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>[Reserved] </b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_009"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Capitalization and Indebtedness</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_010"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reasons for the Offer
    and Use of Proceeds</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_011"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risk Factors.</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Summary
of Risk Factors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">An
investment in our securities involves significant risks. Below is a summary of material risks that we face, organized under relevant
headings. These risks are discussed fully in &#8220;Item 3. Key Information&#8212;D. Risk Factors.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17pt"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17pt"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Factors Relating to Our Business and Industry</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may fail to retain our
    existing users, keep them engaged or further grow our user base.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our revenue growth is primarily
    dependent on paying users and revenue per paying user. If we fail to continue to grow or maintain our paying user base or fail to
    continue to increase revenue per paying user, our live streaming revenue may not increase, which may materially and adversely affect
    our results of operations and financial condition.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We rely on a single monetization
    model.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may fail to offer attractive
    content on our platforms.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Failure to attract, cultivate,
    and retain top broadcasters may materially and negatively affect our user engagement and thus our business and operations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If we fail to implement
    an effective revenue sharing fee policy, we may lose our broadcasters and our results of operations and financial condition may be
    materially and negatively affected.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We partner with various
    talent agencies to manage our broadcasters. If we are not able to maintain our relationship with talent agencies, our operations
    may be materially and adversely affected.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may fail to successfully
    implement our monetization strategies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our business depends on
    a strong brand, and any failure to maintain, protect, and enhance our brand would hurt our ability to retain or expand our user base,
    or our ability to increase their level of engagement.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our core values of focusing
    on user experience and user satisfaction first and acting for the long-term may conflict with the short-term operating results of
    our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If we fail to obtain or
    maintain the required licenses and approvals or if we fail to comply with laws and regulations applicable to our industry, our business,
    results of operations, and financial condition may be materially and adversely affected.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may be subject to intellectual
    property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked
    to our platforms, or distributed to our users, or for proprietary information appropriated by former employees, which may materially
    and adversely affect our business, financial condition and prospects.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unauthorized use of our
    intellectual property and the expenses incurred in protecting our intellectual property rights may materially and adversely affect
    our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our content monitoring
    system may not be effective in preventing misconduct by our users and misuse of our platforms.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may be held liable for
    information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if such content is deemed
    to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The complexity, uncertainties,
    and changes in PRC regulation of the Internet industry and companies may materially and adversely affect our business and financial
    condition.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concerns about the collection,
    use, and disclosure of personal data and other privacy-related and security matters could deter customers and users from using our
    services and adversely affect our reputation and business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Continuing efforts of our
    executive officers, key employees, and qualified personnel are essential to our business and the loss of their services may adversely
    and negatively impact our business and results of operations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We are subject to risks
    relating to litigation.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The appointed Temporary
    Receiver of Link Motion Inc. (f/k/a NQ Mobile Inc.) may bring an action to restore Link Motion Inc.&#8217;s senior position in the
    Showself businesses, which may result in claims against us.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Contractual disputes with
    our talent agencies may harm our reputation, and may be costly or time-consuming to resolve.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Key performance metrics
    used by us, such as QAUs, paying users, ARPPU and paying ratio, may overstate the number of our active and paying users, which may
    lead to an inaccurate interpretation of our revenue metrics and our business operations by our management and by investors, and may
    even misleadingly affect management&#8217;s business judgment of our operations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restrictions on virtual
    currency may adversely affect our revenues.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our results of operations
    are subject to quarterly fluctuations due to seasonality.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We do not currently have
    business insurance to cover our main assets and business. Any uninsured occurrence of business disruption, litigation, or natural
    disaster could expose us to significant costs, which could have an adverse effect on our results of operations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Failure to achieve and
    maintain effective internal and disclosure controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a
    material adverse effect on our business and share price.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">COVID-19 pandemic may have
    an adverse impact on our results of operations and financial condition for the fiscal year 2023.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"></p><div>

</div><!-- Field: Page; Sequence: 11; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Risks
Related to Our Corporate Structure</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
and the VIEs are also subject to risks and uncertainties related to our corporate structure, including, but not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We conduct our business
    through the VIEs by means of contractual arrangements. PRC laws and regulations governing our businesses and the validity of certain
    of our contractual arrangements are uncertain. If the PRC courts or administrative authorities determine that these contractual arrangements
    do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected.
    In addition, changes in such PRC laws and regulations may materially and adversely affect our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantial uncertainties
    exist with respect to whether the foreign investor&#8217;s controlling PRC onshore variable interest entities via contractual arrangements
    will be recognized as &#8220;foreign investment&#8221; and how it may impact the viability of our current corporate structure and
    operations. Also, our VIE structure may be inquired or challenged by relevant PRC governmental authorities when SHC issues additional
    securities for future financing in a public market under certain PRC laws and rules.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We depend upon the contractual
    arrangements in conducting our business in China, which may not be as effective as direct ownership in providing operational control.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may lose the ability
    to use and enjoy assets held by the VIEs that are important to our business if the VIEs declare bankruptcy or become subject to a
    dissolution or liquidation proceeding.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Contractual arrangements
    may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial
    condition and the value of your investment.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may rely on dividends
    paid by our PRC subsidiaries to fund cash and financing requirements. Any limitation on the ability of our PRC subsidiaries to pay
    dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our
    Class A ordinary shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Risks
Related to Doing Business in China</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
WFOEs and the VIEs are based in China and have the majority of the operations in China, so we and the VIEs face risks and uncertainties
related to doing business in China in general, including, but not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Uncertainties in the interpretation
    and enforcement of PRC laws and regulations could limit the legal protections available to you and us.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regulation and censorship
    of information disseminated over the mobile and Internet in China may adversely affect our business and subject us to liability for
    streaming content or content posted on our platforms.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adverse changes in global
    or China&#8217;s economic, political or social conditions or government policies could have a material adverse effect on our business,
    results of operations and financial condition.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The PRC government&#8217;s
    significant oversight over our business operation could result in a material adverse change in the operations of the VIEs and our
    company as a whole and the value of our Class A ordinary shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60.5pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rules and regulations in
    China can change quickly with little or no advance notice and their interpretation and the implementation involve uncertainty, which
    could materially and adversely affect the operations of the VIEs and our company as a whole and the value of our securities.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60.5pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our shares may be delisted
    and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors
    for two consecutive years. The delisting and the cessation of trading of our shares, or the threat of their being delisted and prohibited
    from being traded, may materially and adversely affect the value of your investment.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60.5pt; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The filling requirements
    of the CSRC will be required in connection with an offering under PRC rules, regulations or policies, and, if required, we shall
    further obtain approval or confirmation from other PRC governmental authorities with respect to future offering, and we cannot predict
    how soon we will be able to complete such filings in CSRC or whether obtain such approvals from other PRC governmental authorities.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The VIEs may be subject
    to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable
    laws and obligations could have a material and adverse effect on the business, financial condition and results of operations of the
    VIEs and our company, and future offerings in a public market as a whole.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 12; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It may be difficult for
    overseas shareholders and/or regulators to conduct investigation or collect evidence within China.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Failure to comply with
    laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause us to lose
    customers or otherwise harm our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may rely on dividends
    and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements we may have, and any
    limitation on the ability of our Chinese subsidiaries to make payments to us could have a material and adverse effect on our ability
    to conduct our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Uncertainties exist with
    respect to the interpretation and implementation of Anti-Monopoly Guidelines for Internet Platforms and how it may impact the business
    operations of the VIEs.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The recent joint statement
    by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S. House of Representatives,
    all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties
    to our future offerings, business operations share price and reputation.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently, there is no
    law or regulation specifically governing virtual asset property rights and therefore it is not clear what liabilities, if any, live
    streaming platform operators may have for virtual assets.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under the PRC enterprise
    income tax law, we may be classified as a PRC &#8220;resident enterprise,&#8221; which could result in unfavorable tax consequences
    to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC regulations relating
    to offshore investment activities by PRC residents may limit the ability of WXBJ and WXZJ (our indirect wholly-owned subsidiaries
    in China) to increase our registered capital or distribute profits to us or otherwise expose us to liability and penalties under
    PRC law.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Governmental control of
    currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
related to Investment in our Class A Ordinary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We are an &#8220;emerging
    growth company&#8221; and the reduced disclosure requirements applicable to emerging growth companies may make our securities less
    attractive to investors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Heshine will control the
    outcome of our shareholder actions.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We are a &#8220;controlled
    company&#8221; within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate
    governance requirements that provide protection to shareholders of other companies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our dual-class share structure
    with different voting rights and conversion of certain ordinary shares will limit your ability to influence corporate matters and
    could discourage others from pursuing any change of control transactions that holders of ordinary shares may view as beneficial.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fluctuations in exchange
    rates could have a material adverse effect on our results of operations and the value of your investment.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain provisions of the
    Fourth Amended and Restated Memorandum and Articles of Association may be deemed to have an antitakeover effect.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We are a foreign private
    issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S.
    domestic public companies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NASDAQ may apply additional
    and more stringent criteria for our continued listing.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 13; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Factors Relating to Our Business and Industry</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may fail to retain our existing users, keep them engaged or further grow our user base.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
revenue primarily derives from live streaming services, and therefore our ability to maintain and increase the size of our user base
and user engagement level is critical to our success. If our user base becomes smaller or our users become less active, it is possible
that there would be less spending on the virtual gifts on our platforms. Smaller user base or lower user engagement would make it difficult
to retain top broadcasters. Consequently, our financial condition would suffer a decline in revenue, and our business and results of
operations will be materially and adversely impacted.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">To
continue to maintain and improve our existing user base and user engagement, we must ensure that we adequately and timely identify and
respond to changes in user preferences, attract and retain enough popular broadcasters, and offer new and attractive features and content.
There is no guarantee that we could meet all of these goals. A number of factors could negatively affect user growth, and engagement,
including if:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we fail to deliver our
    services or address users&#8217; requests in a rapid and reliable manner and therefore the user experience is adversely affected;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we fail to innovate the
    content on our platforms that keeps users interested and engaged;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we fail to retain popular
    broadcasters who are able to keep users engaged;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we are unable to combat
    spam on or inappropriate or abusive use of our platforms, which may lead to negative public perception of us and our brand;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we fail to address users&#8217;
    concerns related to privacy and communication, safety, security or other factors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">there are adverse changes
    in our services; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the growth of the number
    of mobile users in China does not continue to increase.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
revenue growth is primarily dependent on paying users and revenue per paying user. If we fail to continue to grow or maintain our paying
user base or fail to continue to increase revenue per paying user, our live streaming revenue may not increase, which may materially
and adversely affect our results of operations and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Whether
we can continue to increase our paying ratio amongst our users or revenue per paying user depends on many factors, and many of them are
out of our control. We expect that our business will continue to be heavily dependent on revenue collected from paying users in the near
future. Any decline in the number of paying users or revenue per paying user may materially and adversely affect our results of operations
and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
rely on a single monetization model.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Mobile
live streaming platforms use three basic categories of revenue sharing models to monetize their live streaming operations: gift model,
advertise model, and shopping model. We currently mainly use the gift model, generating our revenue from virtual gifts purchased by our
users. Although we intend to diversify our revenue sharing models, such as by generating revenue from advertisement, there is no guarantee
we will succeed. Therefore, decreases in revenues generated from the gift model will materially and adversely affect our business, results
of operations and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may fail to offer attractive content on our platforms.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">High
quality live streaming content is important for us to attract, maintain and increase our user base and user engagement. Our content library
is constantly evolving and growing. However, if we fail to expand and diversify our content offerings, identify trending and popular
genres, or maintain the quality of our content, we may experience decreasing viewership and user engagement, which may materially and
adversely affect our financial conditions and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, we largely rely on our broadcasters to create high-quality and fun live streaming content. We have in place a comprehensive
incentive mechanism to encourage broadcasters and talent agencies to supply content that is attractive to viewers. Also, talent agencies
cooperating with us may guide or influence broadcasters to develop content that is well received by viewers. However, if we fail to identify
the latest trends and timely guide broadcasters and talent agencies accordingly, our viewer number may decline and our results of operations
and financial condition may be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Failure
to attract, cultivate, and retain top broadcasters may materially and negatively affect our user engagement and thus our business and
operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
majority of our revenue is from sale of virtual gifts to users. The charisma and the high-quality content of top broadcasters are primary
contributors to user stickiness, and is difficult to be replicated by other less popular broadcasters.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Although
we have made efforts to support top broadcasters in order to retain them, there is no guarantee that they will choose to stay with us.
Top broadcasters tend to receive more offers with attractive terms than the other broadcasters and some of them may choose to move to
other platforms. Their departure may cause a corresponding decline in our user base.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Sometimes
we may face legal disputes with competing platforms from which we attract some top broadcasters. Although we are not the primary target
of these legal disputes, broadcasters involved may be subject to fines or even injunctions, which may render our investment in recruiting
them meaningless. Conversely, some of our top broadcasters have left our platforms for competing platforms despite still being in a contractual
relationship with us, which have raised legal disputes. Even if we prevail in all such legal disputes, the departures of any top broadcaster
may still have a negative impact on our user engagement and reputation. To retain top broadcasters, we must devise better compensation
schemes, improve our monetization capabilities, and help the top broadcasters reach a wider audience. Although we strive to improve in
these respects, there is no guarantee that the broadcasters will not leave our platforms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
terms of broadcaster cultivation, we cannot guarantee that the performance metrics we use to track promising broadcasters will enable
us to identify future top broadcasters. Some of the broadcasters we identify as promising may turn out to be underperforming, and we
may also fail to spot truly promising broadcasters in the early stages of their career. In addition to a waste of resources, either one
of these scenarios could prevent us from cultivating top broadcasters, which could weaken our core competitive strength against competing
platforms and thus cause an outflow of users to those platforms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
we fail to implement an effective revenue sharing fee policy, we may lose our broadcasters and our results of operations and financial
condition may be materially and negatively affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
pay revenue sharing fees to the broadcasters and talent agencies as compensation, which are determined based on a percentage of revenue
from virtual gift sales that are attributed to the broadcasters&#8217; live streaming performance. Failure to implement a satisfactory
revenue sharing fee policy may result in undesired departures of broadcasters. For example, in 2018 we lowered our revenue sharing percentage
for our broadcasters, resulting in departures of a large number of our broadcasters from our platforms. As a result, our revenue was
adversely affected. Since then, we adjusted our revenue sharing fee policy to increase the sharing percentage for broadcasters. However,
there is no guarantee that our current and future revenue sharing fee policy will keep our broadcasters satisfied over an extended period
of time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
partner with various talent agencies to manage our broadcasters. If we are not able to maintain our relationship with talent agencies,
our operations may be materially and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
work with talent agencies to manage and organize broadcasters on our platforms. Cooperation with talent agencies increases our operational
efficiency in terms of discovering, supporting, and managing broadcasters in a more organized and structured manner, and turning amateur
broadcasters into full-time broadcasters. If we fail to maintain our relationship with many of the talent agencies we are currently working
with, we may not be able to retain or attract broadcasters.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Failure
to effectively manage our growth and control our periodic spending to maintain such growth may materially and adversely affect our brand,
and our business and results of operations may be materially and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
rapid growth has placed, and continues to place, a significant strain on our management and resources. We may need to establish and expand
our capacities in all aspects of our business, such as operations, research and development, sales and marketing, and general administration,
in order to meet the increasing needs from a rapidly evolving market. We cannot assure you that our current level of growth will be sustainable.
We believe that our continued growth will depend on our ability to attract and retain viewers and top broadcasters, to develop an infrastructure
to service and support an expanding body of viewers and broadcasters, to explore new monetization avenues, and to convert non-paying
users to paying users and increase user engagement levels. We cannot assure you that we will be successful in any of the above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
expect our costs and expenses to continue to increase in the future as we anticipate that we will need to continue to implement, from
time to time, a variety of new and upgraded operational, informational and financial systems, procedures and controls on an as-needed
basis, including the continued improvement of our accounting and other internal management systems. We will also need to expand, train,
manage and motivate our workforce and manage our relationships with viewers, talent agencies, broadcasters, and other business partners.
All of these endeavors involve risks and will require substantial management efforts and skills and significant additional expenditures.
We expect to continue to invest in our infrastructure in order to provide our services rapidly and reliably to viewers and broadcasters.
Continued growth could end up straining our ability to maintain reliable service levels for all of our viewers and broadcasters, to develop
and improve our operational, financial, legal and management controls, and to enhance our reporting systems and procedures. Managing
our growth will require significant expenditures and the allocation of valuable management resources. If we fail to achieve the necessary
level of efficiency in our organization as we grow, our business, results of operations, and financial condition could be harmed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may fail to successfully implement our monetization strategies.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
streaming platforms are free to access, and we generate revenues primarily from live streaming and sales of virtual gifts. As a result,
our revenue is affected by our ability to increase user engagement and convert non-paying users into paying users, which in turn depends
on our ability to retain quality broadcasters, innovate attractive content, and offer virtual gifts and other services. If we are not
successful in enhancing our ability to monetize our existing services or developing new approaches to monetization, we may not be able
to maintain or increase our revenues and profits or recover any associated costs. We monitor market developments and may adjust our monetization
strategies accordingly from time to time, which may result in decreases of our overall revenue or revenue contributions from some monetization
channels. In addition, we may in the future introduce new services to diversify our revenue streams, including services with which we
have little or no prior development or operating experience. If these new or enhanced services fail to engage customers or platform partners,
we may fail to generate sufficient revenues to justify our investments, and our business and operating results and financial condition
may suffer as a result.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
past growth may not be indicative of our future performance due to our limited operation history with a relatively new business model
in a relatively new market.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
commenced business operations in 2012 and has experienced growth in the number of active and paying users and total revenue since 2014
(despite a decline in 2018 due to our lowering our revenue sharing percentage for our broadcasters). However, our past growth may not
be indicative of our future performance, as the markets for our live streaming platforms and the related products and services are relatively
new and rapidly developing. We must adapt ourselves to overcome challenges in a constantly evolving new market, especially in terms of
converting non-paying users to paying users, maintaining a stable paying user base and attracting new paying users. Our business plan
relies heavily upon an expanding user base and the resulting increased revenue from live streaming, as well as our ability to explore
other monetization avenues. However, our past experience and performance would not guarantee any future success if we are not able to
adapt rapidly to the evolving market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
live streaming industry in China is relatively young, there are few proven methods of projecting user demand or available industry standards
on which we can rely. Currently we derive our revenue primarily from sales of virtual gifts on our platforms. Although we intend to expand
our monetization avenue, we cannot assure you that our attempts to monetize our viewers and broadcasters will continue to be successful,
profitable or accepted, and therefore the income potential of our business is difficult to gauge.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
growth prospects should be considered in light of the risks and uncertainties that fast-growing early-stage companies with limited operating
histories in evolving industries may encounter, including, among others, risks and uncertainties regarding our ability to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">develop new virtual gifts
    that are appealing to users;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">attract, retain, and cultivate
    quality broadcasters;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintain stable relationships
    with talent agencies; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">expand to new geographic
    markets with a suitable environment for the development of live-streaming business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Addressing
these risks and uncertainties will require significant capital expenditures and allocation of valuable management and employee resources.
If we fail to successfully address any of the above risks and uncertainties, the size of our user base, our revenue and operating margin
may decline.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
mainly compete with other established entertainment live streaming platforms. If we are unable to compete effectively, our business and
operating results may be materially and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Since
running a successful live streaming platform requires capital outlay and a large team of quality broadcasters who remain in short supply
due to the fact that most have signed contracts with existing platforms, there are high entry barriers for the entertainment live streaming
industry. As a result, our major competitors are streaming platforms with an established presence in the industry. We must compete with
these established players for user traffic and quality broadcasters and the competition remains intense.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
order to remain competitive, we may be required to spend additional resources, which may adversely affect our profitability. We believe
that our ability to compete effectively depends upon many factors both within and beyond our control, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the popularity, usefulness,
    ease of use, performance and reliability of our services compared to those of our competitors, and our research and development abilities
    compared to our competitors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our ability to timely respond
    to and adapt to industry trends, market development and users&#8217; preferences;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our brand recognition in
    the market;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes mandated by legislation,
    regulations or government policies, some of which may have a disproportionate effect on us; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">acquisitions or consolidation
    within the industry, which may result in more formidable competitors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Furthermore,
if we involved in disputes with any of our competitors that result in negative publicity to us, such disputes, regardless of their veracity
or outcome, may harm our reputation or brand image and in turn lead to reduced number of viewers and broadcasters. Our competitors may
unilaterally decide to adopt a wide range of measures targeted at us, including approaching our top broadcasters or attacking our platforms.
Any legal proceedings or measures we take in response to competition and disputes with our competitors may be expensive, time-consuming,
and disruptive to our operations and divert our management&#8217;s attention.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
we fail to compete effectively against other entertainment medium, our results of operations and financial condition may be materially
and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
users have a vast array of entertainment choices. Other forms of entertainment, such as traditional PC and console games, online video
services, social media, as well as more traditional mediums such as television, movies, and sports events, are much more well-established
in mature markets and may be perceived by users to offer greater variety, affordability, interactivity, and enjoyment. Our platforms
compete against these other forms of entertainment for discretionary time and spending of our users. If we are unable to sustain sufficient
interest of users in our platforms in comparison to other forms of entertainment, including new forms of entertainment that may emerge
in the future, our business model may no longer be viable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may fail to expand our business into overseas markets successfully.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
business objective includes expanding our business into overseas markets in Southeast Asia, the Middle East and South America. As we
continue to expand our international footprint, it will be increasingly susceptible to the risks associated with international operations.
We have a limited operating history outside of China and the ability to manage our international operations successfully requires significant
resources and management attention and is subject to particular challenges of supporting a rapidly growing business in an environment
of diverse cultures, languages, customs, legal systems, alternative dispute systems and economic, political and regulatory systems. In
addition, we expect to incur significant costs associated with expanding our international operations, including hiring personnel internationally.
The risks and challenges associated with doing business internationally and our international expansion include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">uncertain political and
    economic climates;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lack of familiarity and
    burdens of complying with foreign laws, accounting and legal standards, regulatory requirements, tariffs and other barriers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 17; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">unexpected changes in regulatory
    requirements, taxes, tariffs, export quotas, custom duties or other trade restrictions;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lack of experience in connection
    with the localization of our applications, including translation into foreign languages and adaptation for local practices, and associated
    expenses and regulatory requirements;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulties in adapting
    to differing technology standards;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulties in managing
    and staffing international operations, including differing legal and cultural expectations for employee relationships and increased
    travel, infrastructure and legal compliance costs associated with international operations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">fluctuations in exchange
    rates that may increase the volatility of our foreign-based revenue and expenses;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">potentially adverse tax
    consequences, including the complexities of foreign value-added tax, goods and services tax and other transactional taxes;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulties in managing
    and adapting to differing cultures and customs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">data privacy laws which
    require that customer data be stored and processed in a designated territory subject to laws different than China;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">new and different sources
    of competition as well as laws and business practices favoring local competitors and local employees;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">increased financial accounting
    and reporting burdens and complexities; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">restrictions on the repatriation
    of earnings.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
business depends on a strong brand, and any failure to maintain, protect, and enhance our brand would hurt our ability to retain or expand
our user base, or our ability to increase their level of engagement.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
operate six platforms under the brands &#8220;Showself&#8221; (&#31168;&#33394;&#30452;&#25773;),&#8220;Lehai&#8221;(&#20048;&#21992;)
and &#8220;Haixiu&#8221; (&#21992;&#31168;), BeeLive Chinese (&#8220;MiFeng&#8221; &#34588;&#30127;&#30452;&#25773;), BeeLive International
and Hongle.tv(&#8220;Hongle&#8221;&#32418;&#20154;&#30452;&#25773;). Our business and financial performance is highly dependent on the
strength and the market perception of our brands and services. A well-recognized brand is critical to increasing our user base and, in
turn, facilitating our efforts to monetize our services and enhancing our attractiveness to users. From time to time, we conduct marketing
activities across various media to enhance our brand image and to guide public perception of our brands and services. In order to create
and maintain brand awareness and brand loyalty, to influence public perception and to retain existing and attract new mobile users, customers
and platform partners, we may need to substantially increase our marketing expenditures. Since we operate in a highly competitive market,
brand maintenance and enhancement directly affect our ability to maintain our market position. In addition, we must exercise strict quality
control of our platforms to ensure that our brand image is not tarnished by substandard products or services. Any misuse of our platforms
and any governmental adverse actions against our platforms may harm our brand and reputation.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
must also find ways to distinguish our platforms from those of our competitors. If for any reason we are unable to maintain and enhance
our brand recognition, or if we incur excessive expenses in this effort, our business, results of operations, and prospects may be materially
and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
core values of focusing on user experience and user satisfaction first and acting for the long-term may conflict with the short-term
operating results of our business.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">At
this time we are mainly focusing on user experience and satisfaction, which we believe is essential to our success and serves the best,
long-term interests of our company and our shareholders. We may adopt strategies that we think will benefit our users, even if such strategies
may negatively impact our operating results in the short-term. We believe that a high quality user experience on our platforms helps
us expand and maintain our current user base and create better monetizing potential in the long-term.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
we fail to obtain or maintain the required licenses and approvals or if we fail to comply with laws and regulations applicable to our
industry, our business, results of operations, and financial condition may be materially and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
order to conduct and develop business in China, we have obtained the following valid licenses through our PRC variable interest entities:
ICP License for provision of Internet information services, Internet Culture Operation License for online performance and music, entertainment
and game product provision, Commercial Performance License for providing streamer agency services and License for producing radio and
television program.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">However,
the Internet industry is highly regulated in China. Due to the uncertainties of interpretation and implementation of existing and future
laws and regulations, the licenses we currently hold may be deemed insufficient by governmental authorities. In addition, as all licenses
are subject to periodic renewal, even though we have successfully renewed such licenses in the past, there is no guarantee that we will
be able to continue to do so in the future. These uncertainties may in the future restrain our ability to expand our business scope and
may subject us to fines or other regulatory actions by relevant regulators if our practice is deemed as violating relevant laws and regulations.
As we develop and expand our business scope, we may need to obtain additional qualifications, permits, approvals, or licenses. Moreover,
we may be required to obtain additional licenses or approvals if the PRC government adopts more stringent policies or regulations for
our industry. If we fail to obtain, hold, or maintain any of the required licenses or permits or fail to make the necessary filings on
time or at all, we may be subject to various penalties, such as confiscation of the net revenues that have been generated through the
deemed unlicensed activities, the imposition of fines, and the discontinuation or restriction of our operations. Any such penalties may
disrupt our operations and materially and adversely affect our results of operations and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may be subject to intellectual property infringement claims or other allegations by third parties for information or content displayed
on, retrieved from or linked to our platforms, or distributed to our users, or for proprietary information appropriated by former employees,
which may materially and adversely affect our business, financial condition and prospects.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Companies
in the Internet, technology, and media industries are frequently involved in intellectual property infringement litigation. In China,
the validity, enforceability, and scope of protection of intellectual property rights in Internet-related industries, especially in the
evolving live streaming industry, are uncertain. We have been and may in the future be subject to intellectual property infringement
claims or other allegations by third parties for information or content displayed on, retrieved from or linked to, recorded, stored or
make accessible on our platforms, or otherwise distributed to our users, including in connection with the music, movies, video and games
played, recorded or make accessible on our platforms during streaming. For example, we face, from time to time, allegations that we have
featured pirated or illegally downloaded music and movies on our platforms, and that we have infringed on the trademarks and copyrights
of third parties, including our competitors, or allegations that we are involved in unfair trade practices. As we face increasing competition
and as litigation becomes a more common method for resolving commercial disputes in China, we face a higher risk of being the subject
of intellectual property infringement claims or other legal proceedings.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
permit broadcasters to upload text and graphics to our platforms and permit our users to share them. Our platforms also permit broadcasters
or users to choose their username and profile photo. Under relevant PRC laws and regulations, online service providers, which provide
storage space for users to upload content or links to other services or content, could be held liable for copyright infringement under
various circumstances, including situations where the online service provider knows or should reasonably have known that the relevant
content uploaded or linked to on our platforms infringes upon the copyright of others and the online service provider failed to take
necessary actions to prevent such infringement.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have implemented internal control measures to ensure that the design of our platforms and the content that is streamed on our platforms
does not infringe on valid intellectual properties, such as patents and copyrights held by third parties. We also license certain intellectual
properties from third parties to implement certain functions available on our platforms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Some
of our employees were previously employed at other competing companies, including our current and potential competitors. To the extent
that these employees are involved in the development of content or technology similar to ours at their former employers, we may become
subject to claims that such employees or we may have appropriated proprietary information or intellectual properties of the former employers
of our employees. If we fail to successfully defend such claims, our results of operations may be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Defending
claims is costly and can impose a significant burden on our management and employees, and there can be no assurances that favorable final
outcomes will be obtained in all cases. Such claims, even if they do not result in liability, may harm our reputation. Any resulting
liability or expenses, or changes required to our platforms to reduce the risk of future liability, may have a material adverse effect
on our business, financial condition and prospects.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Unauthorized
use of our intellectual property and the expenses incurred in protecting our intellectual property rights may materially and adversely
affect our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
consider our copyrights, trademarks, and other intellectual properties to be critical to our success, and rely on a combination of trademark
and copyright laws, trade secrets protection, restrictions on disclosure and other agreements that restrict the use of our intellectual
property to protect these rights. Although we enter into confidentiality agreements and intellectual property ownership agreements with
our employees, these confidentiality agreements could be breached and we might not have adequate remedies for any breach. As a result,
our proprietary technology, know-how or other intellectual property could otherwise become known to third parties. In addition, third
parties may independently discover trade secrets and proprietary information, limiting our ability to assert any trade secret rights
against such parties.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
measures we use to protect our proprietary rights may not be adequate to prevent the infringement or misappropriation of our intellectual
property. In addition, we cannot assure you that any of our trademark applications will ultimately proceed to registration or will result
in registration with adequate scope for our business. Some of our pending applications or registrations may be successfully challenged
or invalidated by others. If our trademark applications are not successful, we may have to use different marks for affected products
or services, or seek to enter into arrangements with any third parties who may have prior registrations, applications, or rights, which
might not be available on commercially reasonable terms, if at all.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Enforcement
of intellectual property laws in China has historically been lacking, primarily because of ambiguities in the laws and difficulties in
enforcement. Accordingly, intellectual property rights protection in China may not be as effective as in other jurisdictions with a more
developed legal framework regulating intellectual property rights. Policing unauthorized use of our proprietary technology, trademarks,
and other intellectual property is difficult and expensive, and litigation may be necessary in the future to enforce our intellectual
property rights. Future litigation could result in substantial costs and diversion of our resources, and could disrupt our business,
as well as materially adversely affect our results of operations and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Some
of our products and services contain open source software, which may pose a particular risk to our proprietary software, products, and
services in a manner that negatively affects our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
use open source software in some of our products and services and will continue to use open source software in the future. There is a
risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability
to provide or distribute our products or services. Additionally, we may face claims from third parties claiming ownership of, or demanding
release of, the open source software or derivative works that we have developed using such software. These claims could result in litigation
and could require us to make our software source code freely available, purchase a costly license, or cease offering the implicated products
or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional
research and development resources, and we may not be able to complete it successfully.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Furthermore,
because any software source code we contribute to open source projects is publicly available, our ability to protect our intellectual
property rights with respect to such software source code may be limited or lost entirely. As a result, we may be unable to prevent our
competitors or others from using such software source code contributed by us.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
content monitoring system may not be effective in preventing misconduct by our users and misuse of our platforms.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
operate entertainment live streaming platforms that provide real-time streaming and interactions. Because we do not have full control
over how and what broadcasters or viewers will use our platforms to communicate, our platforms may be misused by individuals or groups
of individuals to engage in immoral, disrespectful, fraudulent or illegal activities. We have implemented control procedures to detect
and block illegal or inappropriate content and illegal or fraudulent activities conducted through the misuse of our platforms, but such
procedures may not prevent all such content from being broadcasted or posted or activities from being carried out. Moreover, real time
streaming renders it harder for us to filter illegal or inappropriate speeches, conduct, and behavior from our platforms prior to airing.
As a result, we may face civil lawsuits or other actions initiated by the affected viewer, or governmental or regulatory actions against
us. In response to allegations of illegal or inappropriate activities conducted through our platforms, PRC government authorities may
intervene and hold us liable for non-compliance with PRC laws and regulations concerning the dissemination of information on the Internet
and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some of the features and
services provided on our websites and mobile applications, or even revoke our licenses or permits to provide Internet content services.
We endeavor to ensure all broadcasters are in compliance with relevant regulations, but we cannot guarantee that all broadcasters will
comply with all PRC laws and regulations. Therefore, our live streaming service may be subject to investigations or subsequent penalties
if content displayed on our platforms is deemed to be illegal or inappropriate under PRC laws and regulations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
of the date of this annual report, our platform &#8220;Showself&#8221; (&#31168;&#33394;&#30452;&#25773;) has, since our operation commencement
in 2014, received 7 administrative penalties from Beijing Cultural Market Administrative Enforcement Department, all of which are minor
penalties of fine, for the inappropriate conducts of broadcasters. The other 2 platforms of our, &#8220;Haixiu&#8221; (&#21992;&#31168;&#31168;&#22330;)
and &#8220;Lehai&#8221; (&#20048;&#21992;&#31168;&#22330;), each received 2 administrative penalties, respectively, from the same Department
for the same reason. Beelive Chinese version (&#8220;Mifeng&#8221; &#34588;&#30127;&#30452;&#25773;) received 2 administrative penalty
from Beijing Cultural Market Administrative Enforcement Department and 1 administrative penalty from Beijing Haidian Security Bureau.
Hongle.tv (&#8220;Hongle&#8221; &#32418;&#20154;&#30452;&#25773;) received 2 administrative penalties from Beijing Cultural Market Administrative
Enforcement Department and 1 administrative penalty from Beijing Municipal Tax Bureau. All above mentioned defects have been timely remedied
by the platforms and all remedial measures have been reported to the Department for its review and approval.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may be held liable for information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if
such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
users are able to exchange information, generate content and engage in various other online activities on our live streaming platforms.
We require our broadcasters and users to agree to our terms of use upon account registration. The terms of use set out types of content
strictly prohibited on our platforms. However, signing the terms of use does not guarantee the broadcasters and users will comply with
these terms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, because a majority of the video and audio communications on our platforms is conducted in real time, the content generated
by our broadcasters and users on air cannot be filtered before they are streamed on our platforms. Therefore, users may engage in illegal
conversations or activities, including the publishing of inappropriate or illegal content on our platforms that may be unlawful under
PRC laws and regulations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Although
we have also developed a robust content monitoring system and use our best efforts to monitor content on our platforms, we cannot detect
every incident of inappropriate content on our platforms due to the immense quantity of user-generated content. As such, government authorities
may hold us liable for inappropriate or illegal content on our platforms and may subject us to fines or other disciplinary actions, including
in serious cases suspension or revocation of the licenses necessary to operate our platforms, if we are deemed to have facilitated the
appearance of inappropriate content placed by third parties on our platforms under PRC laws and regulations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Application
stores may temporarily take down our applications if the content was deemed to violate relevant PRC laws or regulations.</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Meanwhile,
we may face claims for defamation, libel, negligence, copyright, patent or trademark infringement, other unlawful activities or other
theories and claims based on the nature and content of the information delivered on or otherwise accessed through our platforms. Defending
any such actions could be costly and require significant time and attention of the management and other resources, which would materially
and adversely affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
complexity, uncertainties, and changes in PRC regulation of the Internet industry and companies may materially and adversely affect our
business and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Internet industry is highly regulated in China, including foreign ownership of, and the licensing and permit requirements pertaining
to, companies in the Internet industry. These Internet-related laws and regulations are relatively new and evolving, and their interpretation
and enforcement involve significant uncertainty. As a result, sometimes it may be difficult to evaluate the legal risks involved in certain
actions or omissions. Issues, risks, and uncertainties relating to PRC regulation of the Internet business include, but are not limited
to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
    are uncertainties relating to the regulation of the Internet business in China, including evolving licensing practices and the requirement
    for real-name registrations. Permits, licenses, or operations at some of our subsidiaries and PRC variable interest entity levels
    may be subject to challenge. We may not be able to timely obtain or maintain all the required licenses or approvals, permits, or
    to complete filing, registration or other formalities necessary for our present or future operations, and we may not be able to renew
    certain permits or licenses or renew certain filing or registration or other formalities. In addition, although we are not currently
    required by PRC law to ask all users for their real name and personal information when they register for a user account, PRC regulators
    could require us to implement compulsory real-name registration for all users on our platforms in the future. In late 2011, for example,
    the Beijing municipal government required micro bloggers in China to implement real-name registration for all of their registered
    users. If we are required to implement real-name registration for users on our platforms, we may lose a large number of registered
    user accounts for various reasons, including, for example, because users may not be able to maintain multiple accounts and some users
    may dislike giving out their private information.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">New
    regulatory agencies may be established under the evolving PRC regulatory system for the Internet industry. Such new agencies may
    issue new policies or new interpretations of existing laws and regulations. We are unable to determine what policies may be issued
    by any such new agencies in the future or how existing laws, regulations, and policies will be interpreted by such new agencies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">New
    laws, regulations or policies may be promulgated or announced that will regulate Internet activities, including online video and
    online advertising businesses. If these new laws, regulations, or policies are promulgated, additional licenses may be required for
    our operations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    interpretation and application of existing PRC laws, regulations, and policies and possible new laws, regulations, or policies relating
    to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments
    in, and the businesses and activities of, Internet businesses in China. There are also risks that we may be found to violate the
    existing or future laws and regulations given the uncertainty and complexity of China&#8217;s regulation of Internet business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Increases
in the costs of content on our platforms may have an adverse effect on our business, results of operations, and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">To
maintain and increase user base and user paying ratio, we must continue offering attractive and engaging content on our platforms. We
provide such content mainly through our broadcasters. In order to attract and retain top broadcasters, we need to have an attractive
revenue sharing policy and provide marketing resources to support them. If competitor platforms offer higher compensation, our costs
to retain our broadcasters may increase. As our business and user base further expand, we also need to continue updating and producing
content and activities to meet the more diversified interest of a larger user group. We also need to innovate the content on our platforms
to capture and follow the market trends, resulting in higher costs of the contents on our platforms. If we are not able to continue to
retain our broadcasters and produce high quality content on our platforms at commercially acceptable costs, our business, financial condition,
and results of operations would be adversely impacted.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
failure to anticipate or successfully implement new technologies could render our proprietary technologies or platforms unattractive
or obsolete, and reduce our revenues and market share.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
technological capabilities and infrastructure underlying our live streaming platforms are critical to our success. The Internet industry
is subject to rapid technological changes and innovation. We need to anticipate the emergence of new technologies and assess their market
acceptance. We also need to invest significant resources, including financial resources, in research and development to keep pace with
technological advances in order to make our development capabilities, our platforms and our services competitive in the market. However,
development activities are inherently uncertain, and we might encounter practical difficulties in commercializing our development results.
Our significant expenditures on research and development may not generate corresponding benefits. Given the fast pace with which the
Internet technology has been and will continue to be developed, we may not be able to timely upgrade our streaming technology, our engines
or the software framework for our platforms&#8217; development in an efficient and cost-effective manner, or at all. New technologies
in programming or operations could render our technologies, our platforms or products or services that we are developing or expect to
develop in the future obsolete or unattractive, thereby limiting our ability to recover related product development costs, outsourcing
costs and licensing fees, which could result in a decline in our revenues and market share.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
proper functioning of our platforms is essential to our business. Any disruption to our IT systems could materially affect our ability
to maintain the satisfactory performance of our platforms.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Disruptive
and malfunctioned platforms will drive away frustrated users of ours and reduce our user base. Smooth and proper functioning of our platforms
relies on our IT systems. However, our technology or infrastructure may not function properly at all times. Any system interruptions
caused by telecommunications failures, computer viruses, hacking or other attempts to harm our systems could result in the unavailability
or slowdown of our platforms and limit the attractiveness of content provided on our platforms. Our servers may also be vulnerable to
computer viruses, physical or electronic break-ins and similar disruptions, which could lead to system interruptions, website or mobile
app slowdown or unavailability or loss of data. Any of such occurrences could cause severe disruption to our daily operations. As a result,
our business and results of operations may be materially and adversely affected and our market share could decline.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Any
compromise to the cyber security of our platforms could materially and adversely affect our business, reputation, and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 7, 2016, the Standing Committee of the National People&#8217;s Congress released the PRC Cyber Security Law, which took effect
on June 1, 2017. The PRC Cyber Security Law requires network operators to fulfill certain obligations to safeguard security in the cyberspace
and enhance network information management.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
products and services are generally provided through the Internet and involve the storage and transmission of users&#8217; information.
Any security breach would expose us to a risk of loss of information and result in litigation and potential liability. As the techniques
used to obtain unauthorized access, disable or degrade Internet services or sabotage operating systems change frequently and often are
not recognized until launched against a target, we may not be able to anticipate such techniques or implement adequate preventative measures.
Upon a security breach, our technical team will be notified immediately and coordinate with the local support staff to diagnose and solve
the technical problems. As of the date of this annual report, we have not experienced any material incidents of security breach.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Despite
the security measures we have implemented, our facilities, systems, procedures, and those of our third-party providers, may be vulnerable
to security breaches, act of vandalism, software viruses, misplaced or lost data, programming or human errors or other similar events
which may disrupt our delivery of services or expose the confidential information of our users and others. If an actual or perceived
breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed, and we may lose current
and potential users and be exposed to legal and financial risks, including legal claims, regulatory fines and penalties, which in turn
could adversely affect our business, reputation, and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Concerns
about the collection, use, and disclosure of personal data and other privacy-related and security matters could deter customers and users
from using our services and adversely affect our reputation and business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Concerns
about our practices with regard to the collection, use, or disclosure of personal information or other privacy-related and security matters,
even if unfounded, could damage our reputation and operations. The PRC Constitution, the PRC Criminal Law, the General Principles of
the PRC Civil Law and the PRC Cyber Security Law protect individual privacy in general, which require certain authorization or consent
from Internet users prior to collection, use, or disclosure of their personal data and also protection of the security of the personal
data of such users. In particular, Amendment 7 to the PRC Criminal Law prohibits institutions, companies, and their employees in the
telecommunications and other industries from selling or otherwise illegally disclosing a citizen&#8217;s personal information obtained
during the course of performing duties or providing services. Our internal policy requires our employees to protect the personal data
of our users, and employees who violate such policy are subject to disciplinary actions, including dismissal. While we strive to comply
with all applicable data protection laws and regulations, as well as our own privacy policies, any failure or perceived failure to comply
may result in proceedings or actions against us by government entities or private individuals, which could have an adverse effect on
our business. Moreover, failure or perceived failure to comply with applicable laws and regulations related to the collection, use, or
sharing of personal information or other privacy-related and security matters could result in a loss of confidence in us by customers
and users, which could adversely affect our business, results of operations and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China, which may experience
unexpected system failure, interruption, inadequacy, or security breaches.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Almost
all access to the Internet in China is maintained through state-owned telecommunication operators under the administrative control and
regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. Moreover, we primarily rely on a limited
number of telecommunication service providers to provide us with data communications capacity through local telecommunications lines
and Internet data centers to host our servers. We have limited access to alternative networks or services in the event of disruptions,
failures or other problems with China&#8217;s Internet infrastructure or the fixed telecommunications networks provided by telecommunication
service providers. Web traffic in China has experienced significant growth during the past few years. Effective bandwidth and server
storage at Internet data centers in large cities such as Beijing are scarce. With the expansion of our business, we may be required to
upgrade our technology and infrastructure to keep up with the increasing traffic on our platforms. We cannot assure you that the Internet
infrastructure and the fixed telecommunications networks in China can support the demands associated with the continued growth in Internet
usage. If we cannot increase our capacity to deliver our online services, we may not be able to satisfy the increases in traffic we anticipate
from our expanding user base, and the adoption of our services may be hindered, which could adversely impact our business and profitability.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, we have no control over the costs of the services provided by telecommunication service providers. If the prices we pay for
telecommunications and Internet services rise significantly, our results of operations may be materially and adversely affected. Furthermore,
if Internet access fees or other charges to Internet users increase, some users may be prevented from accessing the mobile Internet and
thus cause the growth of mobile Internet users to decelerate. Such deceleration may adversely affect our ability to continue to expand
our user base.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
use third-party services and technologies in connection with our business, and any disruption to the provision of these services and
technologies to us could result in adverse publicity and a slowdown in the growth of our users, which could materially and adversely
affect our business, results of operations, and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
business depends upon services and software provided by third parties. For example, our user data is encrypted and saved on the storage
cloud provided by a third-party cloud services company. We are relying on the security measures of such third party cloud services company
for data protection, and our disaster recovery system to minimize the possibility of data loss or breach ability. If such third-party
cloud services company has a system disruption and is not able to recover quickly, our business and operations may be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
overall network relies on broadband connections provided by third-party operators and we expect this dependence on third parties to continue.
The networks maintained and services provided by such third parties are vulnerable to damage or interruption, which could impact our
results of operations. See &#8220;&#8212;Our operations depend on the performance of the Internet infrastructure and fixed telecommunications
networks in China, which may experience unexpected system failure, interruption, inadequacy or security breaches.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
also sell a significant portion of our products and services through third-party online payment systems. If any of these third-party
online payment systems suffers security breaches, users may lose confidence in such payment systems and refrain from purchasing our virtual
gifts online, in which case our results of operations would be negatively impacted.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
exercise no control over the third parties with whom we have business arrangements. For some of services and technologies such as online
payment systems, we rely on a limited number of third-party providers with limited access to alternative networks or services in the
event of disruptions, failures, or other problems. If such third parties increase their prices, fail to provide their services effectively,
terminate their service or agreements, or discontinue their relationships with us, we could suffer service interruptions, reduced revenues
or increased costs, any of which may have a material adverse effect on our business, results of operations, and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>User
growth and engagement depend upon effective interoperation with operating systems, networks, mobile devices, and standards that we do
not control.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
offer access to our platforms across a variety of PC and mobile operating systems and devices. We are dependent on the interoperability
of our services with popular mobile devices and mobile operating systems that we do not control, such as Windows, Android, and iOS. Any
such operating systems or devices that decide to degrade the functionality of our services or give preferential treatment to competitive
services could adversely affect usage of our services. In order to deliver high quality services, it is important that our services work
well across a range of mobile operating systems, networks, mobile devices, and standards that we do not control. We may not be successful
in developing relationships with key participants in the mobile industry or in developing services that operate effectively with these
operating systems, networks, devices and standards. Any difficulties for users and broadcasters in accessing and using our platforms
would harm our user growth and user engagement and in turn would adversely affect our results of operations and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
rely on our mobile application and PC application to provide services to our users and broadcasters which, if inaccessible, may have
material adverse impact on our business and results of operations.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
rely on third-party mobile application and PC application distribution channels such as Apple&#8217;s App Store, various Android application
stores, and websites to distribute our applications to users and broadcasters. We expect a substantial number of downloads of our mobile
applications and PC applications will continue to be derived from these distribution channels. The promotion, distribution, and operation
of our applications are subject to such distribution platforms&#8217; standard terms and policies for application developers, and such
distribution channels have discretion to determine whether we comply with their terms and policies. If any of such distribution channels
determines to take down our applications or terminate the relationship with us, our business, results of operations, and financial condition
may be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Continuing
efforts of our executive officers, key employees, and qualified personnel are essential to our business and the loss of their services
may adversely and negatively impact our business and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
future success depends substantially on the continued efforts of our executive officers and key employees. If one or more of our executive
officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in
a timely manner, or at all. Since live streaming industry is characterized by high demand and intense competition for talent, we cannot
assure you that we will be able to attract or retain qualified staffs or other highly skilled employees. In addition, as we are relatively
young, our ability to train and integrate new employees into our operations may not meet the growing demands of our business, which may
materially and adversely affect our ability to grow our business and hence our results of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
any of our executive officers or key employees joins a competitor or forms a competing company, we may lose users, know-how and key professionals
and staff members. Each of our executive officers and key employees has entered into an employment agreement and a non-compete agreement
with us. However, certain provisions under the non-compete agreement may be deemed invalid or unenforceable under PRC law. If any dispute
arises between our executive officers and key employees and us, we cannot assure you that we would be able to enforce these non-compete
agreements in China, where these executive officers reside, in light of uncertainties with China&#8217;s legal system.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are subject to risks relating to litigation.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have been involved in and may be subject to litigation and claims of various types, including litigation alleging infringement of intellectual
property rights and unfair competition, claims and disputes involving broadcasters, customers, our employees and suppliers. Litigation
is expensive, subjects us to the risk of significant damages, requires significant management time and attention and could have a material
and adverse effect on our business, results of operations, and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may be the subject of allegations, harassing, or other detrimental conduct by third parties, which could harm our reputation and cause
it to lose market share, users, and customers.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have been subject to allegations by third parties, negative Internet postings and other adverse public exposure on our business, operations
and staff compensation. We may also become the target of harassment or other detrimental conduct by third parties or disgruntled former
or current employees. Such conduct may include complaints, anonymous or otherwise, to regulatory agencies, media or other organizations.
We may be subject to government or regulatory investigation or other proceedings as a result of such third-party conduct and may be required
to spend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that we will be
able to conclusively refute each of the allegations within a reasonable period of time or at a commercially reasonable cost, or at all.
Additionally, allegations, directly or indirectly against us, may be posted on the Internet, including social media platforms by anyone,
whether or not related to us, on an anonymous basis. Any negative publicity on us or our management can be quickly and widely disseminated.
Social media platforms and devices immediately publish the content of their subscribers and participants post, often without filters
or checks on the accuracy of the content posted. Information posted may be inaccurate and adverse to us, and it may harm our reputation,
business or prospects. The harm may be immediate without affording us an opportunity for redress or correction. Our reputation may be
negatively affected as a result of the public dissemination of negative and potentially false information about our business and operations,
which in turn may cause us to lose market share, users or customers.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
appointed Temporary Receiver of Link Motion Inc. (f/k/a NQ Mobile Inc.) may bring an action to restore Link Motion Inc.&#8217;s senior
position in the Showself businesses, which may result in claims against us.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 13, 2018, a shareholder plaintiff filed a derivative lawsuit on behalf of, and against Link Motion Inc. (&#8220;LKM&#8221;)
and three individual defendants, including the chairman of the board of directors of LKM, in the United States District Court for Southern
District of New York. In this lawsuit, the shareholder plaintiff alleged certain wrongdoing by the individual defendants in connection
with the sales of LKM&#8217;s corporation assets, including the sale of a 65% equity interest in the Showself businesses (currently is
conducted via Zhihui Qiyuan) to Tongfang Investment Fund Series SPC (&#8220;TF&#8221;) pursuant to a share purchase agreement dated as
of March 30, 2017. On February 1, 2019, the court issued a Preliminary Injunction Order which preliminarily enjoins the defendants to
take corrective action as necessary to restore LKM&#8217;s senior position in the underlying assets of the Showself businesses and appointed
a temporary receiver for LKM during the pendency of this action. The temporary receiver has certain statutory powers and specified delineated
powers, including but not limited to, commence, continue and/or control any action on behalf of LKM in the U.S., the PRC, or elsewhere.
It is possible that we could be sued in connection with these ongoing proceedings, which could be costly to defend, and a judgment against
us could result in significant damages. As of the date of this annual report and to our knowledge, the temporary receiver has yet brought
any claims in any jurisdiction to restore LKM&#8217;s 65% equity interest in the Showself businesses. However we cannot guarantee that
such claims will not be brought in the future.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Negative
publicity may materially and adversely affect our brand, reputation, business, and growth prospects.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Negative
publicity involving us, our broadcasters, our users, our management, our live streaming platforms, or our business model may materially
and adversely harm our brand and our business. We cannot assure you that we will be able to defuse negative publicity about us, our management
and/or our services to the satisfaction of our investors, users and broadcasters, customers and platform partners. There has been negative
publicity about us and the misuse of our services, which has adversely affected our brand, public image, and reputation. Such negative
publicity, especially when it is directly addressed against us, may also require us to engage in defensive media campaigns. This may
cause us to increase our marketing expenses and divert our management&#8217;s attention and may adversely impact our business and results
of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contractual
disputes with our talent agencies may harm our reputation, and may be costly or time-consuming to resolve.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
enter into contractual arrangements with talent agencies. Pursuant to these contracts, talent agencies are responsible for recruiting
and training broadcasters and providing content for our platforms. We share with the talent agencies a certain percentage of the revenue
generated by the broadcasters they manage. Talent agencies will in turn enter into compensation arrangement with the broadcasters they
manage. From time to time, there may be contractual disputes between broadcasters and talent agencies, and/or between talent agencies
and us. Any such disputes may not only be costly and time-consuming to solve, but may also be detrimental to the quality of the content
produced by the broadcasters, or even causing broadcasters to leave our platforms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
enter into exclusivity agreements with certain of our top broadcasters, pursuant to which such top broadcasters agree not to work for
other live streaming platforms in exchange for additional support and resources from us. Although these top broadcasters are required
to pay a certain amount of fees if they breach the exclusivity agreements, we cannot guarantee that such exclusivity agreements will
be an effective measure to deter these top broadcasters from leaving our platforms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Key
performance metrics used by us, such as QAUs, paying users, ARPPU and paying ratio, may overstate the number of our active and paying
users, which may lead to an inaccurate interpretation of our revenue metrics and our business operations by our management and by investors,
and may even misleadingly affect management&#8217;s business judgment of our operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">For
performance tracking purposes, we monitor metrics such as the number of registered user accounts, active users, and paying users. We
calculate certain operating metrics in the following ways: (a) the number of registered users, which refers to the number of users that
has registered and logged onto our platforms at least once since registration; (b) the number of active users, which refers to the number
of users that has visited our platforms through PC or mobile app at least once in a given period; (c) the number of paying users, which
refers to the number of users that has purchased virtual currencies on our platforms at least once in a given period. The actual number
of individual users, however, is likely to be lower than that of registered users, active users, and paying users potentially significantly,
due to various reasons such as fraudulent representation or improper registration. Some of the user accounts may also be created for
specific purposes such as to increase virtual gifting for certain performers in various contests, but the number of registered users,
active users, and paying users do not exclude user accounts created for such purposes. We have limited ability to validate or confirm
the accuracy of information provided during the user registration process to ascertain whether a new user account created was actually
created by an existing user who is registering duplicative accounts. The respective number of our registered users, active users, and
paying users may overstate the number of individuals who register on our platforms, sign onto our platforms, purchase virtual gifts or
other products and services on our platforms, which may lead to an inaccurate interpretation of our operating metrics. Additionally,
a user needs to register a separate account for each our platform to access such platform. When calculating our total numbers of QAUS
as a whole, a user with multiple accounts with us may be counted more than once and such numbers may be higher than the actual numbers
of users. Additionally, we are able to measure unique users only to the extent that these users are registered using the same identification
method. Since we allow a user to register an account on our platforms with the user&#8217;s mobile number, Wechat account or QQ account,
our ability to identify unique users is limited.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
the tracked growth in the number of our registered users, active users, and paying users is higher than the actual growth in the number
of individuals registered, active, or paying users, our user engagement level, sales, and business may not grow as quickly as we expect.
In addition, such overstatement may cause inaccurate evaluation of our operations by our management and by investors, which may also
materially and adversely affect our business and results of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
security of operations of, and fees charged by, third-party online payment platforms may have a material adverse effect on our business
and results of operations.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Currently,
we use third-party online payment platforms, such as China UnionPay, WeChat Pay, and Alipay, to receive a large part of the cash proceeds
from sales of our products and services through direct purchases on our platforms. Any scheduled or unscheduled interruption in the ability
of our users to use these and other online payment platforms could adversely affect our payment collection, and in turn, our revenue.
In addition, in online payment transactions, secure transmission of user information, such as debit and credit card numbers and expiration
dates, personal information and billing addresses, over public networks, is essential to user privacy protection and maintaining their
confidence in our platforms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
do not have control over the security measures of our third-party payment platforms, and their security measures may not be adequate
at present or may not be adequate with the expected increased usage of online payment platforms. We could be exposed to litigation and
possible liability if online transaction safety of our users is compromised in transactions involving payments for our products and services,
which could harm our reputation and our ability to attract users and may materially adversely affect our business. We also rely on the
stability of such payment transmissions to ensure the continued payment services provided to our users. If any of these third-party online
payment platforms fails to process or ensure the security of users&#8217; payments for any reason, our reputation will be damaged and
we may lose our paying users and discourage the potential purchases, which in turn, will materially and adversely affect our business,
financial condition, and prospects.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
users may suffer third-party fraud when purchasing our virtual currency and we may suffer fraud when selling virtual currency to users.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
offer our users multiple options to purchase our virtual currency. Users can purchase these virtual currencies directly on web streaming
portal, or make in-app purchases using third-party payment channels including China Union Pay, WeChat pay, Alipay and Apple&#8217;s App
Store. Users can also purchase virtual currencies through third-party sales agencies officially authorized by us. Other than the above-mentioned
purchase channels, there are no other means to purchase our virtual currency. However, from time to time, certain third parties fraudulently
claim that they are sales agencies authorized by us and users can purchase our virtual currency through them. If our users choose to
purchase our virtual currency from such unauthorized third parties, they may suffer losses from such fraudulent activities by third parties.
Although we are not directly responsible for the losses in such case, our user experience may be adversely affected and users may choose
to leave our platforms as a result. Such fraudulent activities by third parties might also generate negative publicity, disputes, or
even legal claims. The measures we take in response to such negative publicity, disputes, or legal claims may be expensive, time consuming,
and disruptive to our operations and divert our management&#8217;s attention.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Additionally,
there is a risk that even our duly authorized third-party sales agencies may fail to deliver virtual currencies to users after users
make payment. In this case, we are responsible to deliver such virtual currencies to users. We may in turn demand payment from the authorized
third-party sale agencies but there is no guarantee that we may recover the full payment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Restrictions
on virtual currency may adversely affect our revenues.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Due
to the relatively short history of virtual currencies in China, the regulatory framework governing the industry is still under development.
On June 4, 2009, the Ministry of Culture and the Ministry of Commerce jointly issued Notice on the Strengthening of the Administration
of Online Game Virtual Currency (the &#8220;Virtual Currency Notice&#8221;), which defines what a virtual currency is and requires that
entities obtain the approval from the competent culture administrative department before issuing virtual currency and engaging in transactions
using virtual currencies in connection with online games. The Virtual Currency Notice regulates that virtual currency may only be used
to purchase services and products provided by the online service provider that issues the virtual currency, and also prohibit businesses
that issue online game virtual currency from issuing virtual currency to game players through means other than purchases with legal currency,
and from setting game features that involve the direct payment of cash or virtual currency by players for the chance to win virtual gifts
or virtual currency based on random selection through a lucky draw, wager, or lottery. These restrictions on virtual currency may result
in lower sales of online virtual currency.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Currently,
the PRC government has not promulgated any specific rules, laws, or regulations to directly regulate virtual currencies, except for the
above-mentioned Virtual Currency Notice. Although the term &#8220;virtual currency&#8221; is widely used in live streaming industry,
we believe that the &#8220;virtual currency&#8221; used in our live streaming communities does not fall into a &#8220;virtual currency&#8221;
as defined under the Virtual Currency Notice, and we are not subject to any online game virtual currency laws or regulations for our
live streaming business. We have obtained the approval from the competent culture administrative department for issuing a virtual currency
for online games (which is set forth in the Internet Culture Operation Licenses that we have acquired). So far, we have not issued any
virtual currency for online games as defined under the Virtual Currency Notice. However, due to the uncertainties of the interpretation
and implementation of the law and regulation, we cannot assure you that the PRC regulatory authorities will not take a different view,
in which case we may be required to obtain additional approvals or licenses or change our current business model and may be subject to
fines or other penalties, which could adversely affect our business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
results of operations are subject to quarterly fluctuations due to seasonality.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
experience seasonality in our business, reflecting seasonal fluctuations in Internet usage. For example, the number of active users tends
to be higher during the last quarter of the year while lower near Chinese New Year season. Furthermore, the number of paying users of
our online live streaming platforms correlate with our marketing campaigns and promotional activities, which may coincide with popular
western or Chinese festivals. As a result, comparing our operating results on a period-to-period basis may not be meaningful.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
do not currently have business insurance to cover our main assets and business. Any uninsured occurrence of business disruption, litigation,
or natural disaster could expose us to significant costs, which could have an adverse effect on our results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
currently do not have any business liability or disruption insurance to cover our operations. Any uninsured occurrence of business disruption,
litigation, or natural disaster, or significant damages to our uninsured equipment or facilities could disrupt our business operations,
requiring us to incur substantial costs and divert our resources, which could have an adverse effect on our results of operations and
financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Failure
to achieve and maintain effective internal and disclosure controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could
have a material adverse effect on our business and share price.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Effective
internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate
successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results
would be harmed. Our management has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the
Exchange Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
requirements of Section 404 of the Sarbanes-Oxley Act are ongoing and also apply to future years. We expect that our internal control
over financial reporting will continue to evolve as we continue in our efforts to transform our business. Although we are committed to
continue to improve our internal control processes and we will continue to diligently and vigorously review our internal control over
financial reporting in order to ensure compliance with the Section 404 requirements, any control system, regardless of how well designed,
operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. In addition, successful
remediation of the control deficiencies identified as of December 31, 2022 is dependent on our ability to hire and retain qualified employees
and consultants. Therefore, we cannot be certain that in the future additional material weakness or significant deficiencies will not
exist or otherwise be discovered. See &#8220;<i>Item 15-Controls and Procedures.</i>&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
continue to grant share-based awards in the future, which may result in increased share-based compensation expenses and have an adverse
effect on our future profit. Exercise of the options or restricted shares granted will increase the number of our shares in circulation,
which may adversely affect the market price of our shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
adopted an equity incentive plan on February 8, 2021, or the &#8220;<b>2021 Plan</b>&#8221;, for the purpose of providing additional
incentives to employees, directors and consultants and to promote the success of the Company&#8217;s business. The maximum aggregate
number of Class A ordinary shares we are authorized to issue pursuant to all awards under the 2021 Share Incentive Plan is 3,000,000
Class A ordinary shares. As of the date of this annual report, total of 2,115,283 restricted share units have been granted under 2021
Pan. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results
of operations. Furthermore, exercise of the awards granted under the 2021 Plan by our employees will increase the number of our shares
in circulation, which may have an adverse impact on our share price.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Non-compliance
on the part of our employees or third parties involved in our business could adversely affect our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
compliance controls, policies, and procedures may not protect us from acts committed by our employees, agents, contractors, or collaborators
that violate the laws or regulations of the jurisdictions in which we operate, which may adversely affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, our business partners or other third parties involved in our business through our business partners (such as contractors, talent
agencies, or other third parties entered into business relationship with our third- party business partners) may be subject to regulatory
penalties or punishments because of their regulatory compliance failures, which may, directly or indirectly, disrupt our business. When
we enter into a business relationship with a third party partner, we cannot be certain whether such third party business partner has
infringed or will infringe any other third parties&#8217; legal rights or violate any regulatory requirements or rule out the likelihood
of incurring any liabilities imposed on us due to any regulatory failures by such third party business partner. In addition, for those
third parties actively involved in our business through our business partners, we cannot assure you that our business partners will be
able to supervise and administrate those third parties. The legal liabilities and regulatory actions on our business partners or other
third parties involved in our business may affect our business activities and reputation and in turn, our results of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may not be able to ensure compliance with United States economic sanctions laws.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
U.S. Department of the Treasury&#8217;s Office of Foreign Assets Control, or OFAC, administers laws and regulations that generally prohibit
U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, from conducting activities or transacting
business with certain countries, governments, entities or individuals that are targets of U.S. economic sanctions. We do not and will
not use any of our funds for any activities or business with any country, government, entity, or individual in violation of U.S. economic
sanctions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">While
we believe that we have been, and that we continue to be, in compliance with applicable U.S. economic sanctions, our current safeguards
may fail to prevent broadcasters and users located in countries that are targets of U.S. economic sanctions from accessing our platforms.
Non-compliance with applicable U.S. economic sanctions could subject us to adverse media coverage, investigations, and severe administrative,
civil and possibly criminal sanctions, expenses related to remedial measures, and legal expenses, which could materially adversely affect
our business, results of operations, financial condition and reputation.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Spammers
and malicious software and applications may affect user experience, which could reduce our ability to attract users and materially and
adversely affect our business, results of operations, and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Spammers
may use our streaming platforms to send spam messages to users, which may affect user experience. As a result, users may reduce using
our products and services or stop using them altogether. In spamming activities, spammers typically create multiple user accounts for
the purpose of sending a high volume of repetitive messages. Although we attempt to identify and delete accounts created for spamming
purposes, we may not be able to effectively eliminate all spam messages from our platforms in a timely fashion. Any spamming activities
could have a material and adverse effect on our business, results of operations, and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, malicious software and applications may interrupt the operations of our websites, our PC clients or mobile apps and pass on
such malware to our users which could adversely hinder user experience. Although we have been successfully blocking these attacks in
the past, we cannot guarantee that this will always be the case, and in the incident if users experience a malware attack by using our
platforms, users may associate the malware with our websites, our PC clients or mobile apps, and our reputation, business, and results
of operations would be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
leased property interests may be defective and our right to lease the properties affected by such defects may be challenged, which could
adversely affect our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
PRC laws, all lease agreements are required to be registered with local housing authorities. We lease several premises in China. We cannot
assure whether or not all landlords of these premises have registered the relevant lease agreements with the government authorities,
or have completed registration of their ownership rights to the premises. Furthermore, we cannot assure that some of the premises do
not have a defective title. We may be subject to monetary fines due to failure by the landlords to complete the required registrations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
may also be forced to relocate our operations if the landlords do not obtain valid title to or complete the required registrations with
local housing authorities in a timely manner or at all. We might not be able to locate desirable alternative sites for our operations
in a timely and cost-effective manner which may adversely affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Future
strategic alliances or acquisitions may have a material and adverse effect on our business, reputation, and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
may enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further our
business purpose from time to time. These alliances could subject us to a number of risks, including risks associated with sharing proprietary
information,&#160;non-performance&#160;by the third party and increased expenses in establishing new strategic alliances, any of which
may materially and adversely affect our business. We may have limited ability to monitor or control the actions of these third parties
and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to
their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, when appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary
to our existing business. In addition to possible shareholders&#8217; approval, we may also have to complete filings and obtain approvals
and licenses from relevant government authorities for the acquisitions and to comply with any applicable PRC laws and regulations, including
the filling with CSRC if we issue additional securities for the acquisitions, which could result in increased delay and costs, and may
derail our business strategy if it fails to do so. Furthermore, past and future acquisitions and the subsequent integration of new assets
and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing
business, which in turn could have an adverse effect on our business operations. Acquired assets or businesses may not generate the expected
financial results. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities,
the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential
unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>COVID-19
pandemic may have an adverse impact on our results of operations and financial condition for the fiscal year 2023.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts
of the world in the first half of 2020, which has caused significant volatility in the PRC and international markets. After the initial
outbreak of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the
infections caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai
in 2022, and a series of restrictions and quarantines were implemented to contain the spread. Our Beijing and Hangzhou office did not
work at full capacity for approximately two months when these restrictive measures are in force, which negatively affected our operational
and financial results. Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread
of the COVID-19 virus have been revoked or replaced with more flexible measures since December 2022. While the revocation or replacement
of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on our normal operations, the extent of the
impact on our future financial results will be dependent on future developments such as the length and severity of the crisis, the potential
resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the
global economy and capital markets, among many other factors, all of which still remain uncertain and unpredictable. Given this uncertainty,
we are currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity
and results of operations if the current situation continues, and therefore we cannot guarantee that COVID-19 will not adversely impact
our results of operations and financial condition for the fiscal year 2023.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Risk
Factors Relating to Our Corporate Structure</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
conduct our business through the VIEs by means of contractual arrangements. PRC laws and regulations governing our businesses and the
validity of certain of our contractual arrangements are uncertain</i>. <i>If the PRC courts or administrative authorities determine that
these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could
be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Current
PRC laws and regulations place certain restrictions and conditions on foreign ownership of certain areas of businesses and accordingly
to comply with PRC laws and regulations, we conduct such business activities through the VIEs in China. For more detailed discussions,
see <i>&#8220;--Substantial uncertainties exist with respect to whether the foreign investor&#8217;s controlling PRC onshore variable
interest entities via contractual arrangements will be recognized as foreign investment and how it may impact the viability of our current
corporate structure and operations.&#8221; </i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">WXBJ
has entered into contractual arrangements with the Zhihui Qiyuan VIEs and their respective shareholders, and WXZJ has entered into contractual
arrangements with the Siixang Qiyuan VIEs and their respective shareholders. Such contractual arrangements enable us to exercise effective
control over, receive substantially all of the economic benefits of, and have an exclusive option to purchase all or part of the equity
interest and assets in the VIEs when and to the extent permitted by PRC law. We have evaluated the guidance in FASB ASC 810 and concluded
that we are the primary beneficiary of the VIEs because of these contractual arrangements. Accordingly, under U.S. GAAP, the financial
statements of the VIEs are consolidated as part of our financial statements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">However,
Scienjoy Holding Corporation is a British Virgin Islands holding company with no equity ownership in the VIEs and we conduct our operations
in China through (i) our PRC subsidiaries and (ii) the VIEs with which we have maintained contractual arrangements. Investors in our
Class A Ordinary Shares thus are not purchasing equity interest in our consolidated affiliated entities in China but instead are purchasing
equity interest in a British Virgin Islands holding company. If the PRC government deems that our contractual arrangements with the VIEs
do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation
of existing regulations change or are interpreted differently in the future, we and the VIEs could be subject to severe penalties or
be forced to relinquish our interests in those operations. Our holding company in the British Virgin Islands, the VIEs, and investors
of Scienjoy Holding Corporation face uncertainty about potential future actions by the PRC government that could affect the enforceability
of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company
as a group.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises,
or the Trial Measures, which will become effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules
No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic
Enterprises and relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC&#8217;s official
website. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic principles of the Draft Administrative
Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing
by domestic enterprises. The Trial Measures grant the CSRC the authority to regulate the overseas offering and listing of PRC companies
with VIE structures and allow filings by VIE-structured companies insofar as they comply with the relevant regulations. PRC companies
that are already listed on overseas exchanges by or before March 31, 2023 are not required to make any filings with CSRC unless they
raise additional equity financing, in which case CSRC may also consult with certain PRC governmental authorities that regulate the PRC
companies&#8217; business operations, or ask the Company to obtain approvals or confirmation from such authorities in advance.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
still remain substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited
to, the laws and regulations governing our and the VIEs&#8217; business, or the enforcement and performance of our contractual arrangements
with the VIEs and their shareholders. These laws and regulations may be subject to change, and their official interpretation and enforcement
may involve substantial uncertainty. New laws and regulations that affect existing and proposed future businesses may also be applied
retroactively. Due to the uncertainty and complexity of the regulatory environment, we cannot assure you that we and the VIEs would always
be in full compliance with applicable laws and regulations, the violation of which may have adverse effect on our and the VIEs&#8217;
business and our reputation.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Although
we believe we, our PRC subsidiaries and the VIEs are not in violation of current PRC laws and regulations, we cannot assure you that
the PRC government would agree that our contractual arrangements comply with PRC licensing, registration or other regulatory requirements,
with existing policies or with requirements or policies that may be adopted in the future. If the PRC government determines that we or
the VIEs do not comply with applicable law, it could revoke the VIEs&#8217; business and operating licenses, require the VIEs to discontinue
or restrict the VIEs&#8217; operations, restrict the VIEs&#8217; right to collect revenues, block the VIEs&#8217; websites, require the
VIEs to restructure our operations, impose additional conditions or requirements with which the VIEs may not be able to comply, impose
restrictions on the VIEs&#8217; business operations or on their customers, or take other regulatory or enforcement actions against the
VIEs that could be harmful to their business. Any of these or similar occurrences could significantly disrupt our or the VIEs&#8217;
business operations or restrict the VIEs from conducting a substantial portion of their business operations, which could materially and
adversely affect the VIEs&#8217; business, financial condition and results of operations. If any of these occurrences results in our
inability to direct the activities of any of the VIEs that most significantly impact its economic performance, and/or our failure to
receive the economic benefits from any of the VIEs, we may not be able to consolidate these entities in our consolidated financial statements
in accordance with U.S. GAAP. In addition, our shares may decline in value or become worthless if we are unable to assert our contractual
control rights over the assets of our PRC subsidiaries that conduct a significant part of our operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Substantial
uncertainties exist with respect to whether the foreign investor&#8217;s controlling PRC onshore variable interest entities via contractual
arrangements will be recognized as &#8220;foreign investment&#8221; and how it may impact the viability of our current corporate structure
and operations.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 15, 2019, the National People&#8217;s Congress of the PRC adopted the PRC Foreign Investment Law, which took force on January 1,
2020, and replaced three existing laws regulating foreign investment in China, namely the PRC Equity Joint Venture Law, the PRC Cooperative
Joint Venture Law and Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The PRC
Foreign Investment Law defines the &#8220;foreign investment&#8221; as the investment activities in China conducted directly or indirectly
by foreign investors in the following manners: (i) the foreign investor, by itself or together with other investors establishes a foreign-invested
enterprise in China; (ii) the foreign investor acquires shares, equities, asset tranches, or similar rights and interests of enterprises
in China; (iii) the foreign investor, by itself or together with other investors, invests and establishes new projects in China; (iv)
the foreign investor invests through other approaches as stipulated by laws, administrative regulations or otherwise regulated by the
State Council. The PRC Foreign Investment Law keeps silent on how to define and regulate the &#8220;variable interest entities,&#8221;
while adding a catch-all clause that &#8220;other approaches as stipulated by laws, administrative regulations or otherwise regulated
by the State Council&#8221; can fall into the concept of &#8220;foreign investment,&#8221; which leaves uncertainty as to whether the
foreign investor&#8217;s controlling PRC onshore variable interest entities via contractual arrangements will be recognized as &#8220;foreign
investment.&#8221; Pursuant to the PRC Foreign Investment Law, PRC governmental authorities will regulate foreign investment by applying
the principle of pre-entry national treatment together with a &#8220;negative list,&#8221; which will be promulgated by or promulgated
with approval by the State Council or its authorized governmental department such as Ministry of Commerce. Foreign investors are prohibited
from making any investments in the industries which are listed as &#8220;prohibited&#8221; in such negative list; and, after satisfying
certain additional requirements and conditions as set forth in the &#8220;negative list,&#8221; are allowed to make investments in the
industries which are listed as &#8220;restricted&#8221; in such negative list. For any foreign investor that fails to comply with the
negative list, the competent authorities are entitled to ban its investment activities, require such investor to take measures to correct
its non-compliance and impose other penalties.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
latest version of the &#8220;negative list,&#8221; namely, the Special Management Measures (Negative List) for the Access of Foreign
Investment (2021), which became effective on January 1, 2022, provides that foreign investment is prohibited in providing the Internet
content service, Internet audio-visual program services and online culture activities that we conduct through our consolidated variable
interest entities. These operations are subject to foreign investment restrictions/prohibitions set forth in the Special Administrative
Measures (Negative List) for the Access of Foreign Investment (2021) issued by the Ministry of Commerce.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC Foreign Investment Law leaves leeway for future laws, administrative regulations or provisions of the State Council and its departments
to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether our corporate structure will
be seen as violating foreign investment rules as we are currently using the contractual arrangements to operate certain businesses in
which foreign investors are currently prohibited from or restricted to investing. Furthermore, if future laws, administrative regulations
or provisions of the State Council and its departments mandate further actions to be taken by companies with respect to existing contractual
arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. If we fail
to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate
structure, corporate governance and business operations could be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
depend upon the contractual arrangements in conducting our business in China, which may not be as effective as direct ownership in providing
operational control.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a holding company incorporated in the British Virgin Islands. As a holding company with no material operations of our own, we conduct
a substantial majority of our operations through the VIEs in China. We entered into the VIE agreements with Zhihui Qiyuan VIEs on January
29, 2019 and entered into the VIE agreements with Sixiang Qiyuan VIEs on June 1, 2022. We generate most of our revenue from operations
of the VIEs. Our shares (include Class A ordinary shares and Class A Preferred shares) offered in this offering are shares of our offshore
holding company instead of shares of the VIEs or our PRC subsidiaries. we rely on contractual arrangements by and among WXBJ, the Zhihui
Qiyuan VIEs and their shareholders and the contractual arrangements by and among WXZJ, the Sixiang Qiyuan VIEs and their shareholders
for our business operations, and these contractual arrangements may not be as effective as direct ownership in providing us with control
over the VIEs. We rely on the performance by the VIEs and their shareholders of their obligations under the contracts to receive substantially
all of the economic benefits from the VIEs&#8217; operations and be the primary beneficiary of the VIEs for accounting purposes. The
shareholders of the VIEs may not act in the best interests of our company or may not perform their obligations under these contracts.
Such risks exist throughout the period in which we intend to operate certain portion of our business through the contractual arrangements
with the VIEs.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Any
failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material
adverse effect on our business. If the VIEs or their shareholders fail to perform their respective obligations under the contractual
arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. We may also have to
rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages. The legal environment
in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal
system could limit our ability, as a British Virgin Islands holding company, to enforce these contractual arrangements and doing so may
be quite costly, and these contractual arrangements have not been tested in a court of law.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
shareholders of the VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business and
financial condition. The shareholders of the VIEs may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual
arrangements we have with them and the VIEs, which would have a material adverse effect on our ability to effectively control the VIEs
and receive economic benefits from them. If we cannot resolve any conflict of interest or dispute between us and these shareholders,
we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty
as to the outcome of any such legal proceedings.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
the PRC government deems that the agreements that establish the structure for operating our businesses in China do not comply with PRC
regulations on foreign investment in Internet and other related businesses, or if these regulations or their interpretation change in
the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations, and may need to reorganize
our current corporate structure to comply with PRC laws and regulations. In addition, if SHC issues new securities for future financing,
the Company shall disclose the whole corporate structure including VIEs to CSRC and may be inquired by CSRC about the background of such
structure.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">PRC
laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in Internet and other
related businesses (usually defined as &#8220;value-added telecommunication business&#8221; under relevant PRC authorities), including
the provision of Internet content and online service operations, which fell under the catalogue of negative list published and updated
by PRC Ministry of Commerce from time to time. Specifically, foreign ownership is prohibited in industries of online audio and video
program services and Internet cultural business (excluding music), foreign ownership of an Internet content provider may not exceed 50%,
and the major foreign investor is required to have a record of good performance and operating experience in managing value-added telecommunications
business. We are a company registered in the British Virgin Islands and WXBJ and WXZJ (our indirect wholly-owned subsidiaries in China)
are foreign-invested enterprises (or called &#8220;wholly foreign-owned enterprises&#8221;, the &#8220;WFOEs&#8221;) under PRC laws and
regulations. To comply with PRC laws and regulations, we have to conduct our business in China mainly through WXBJ, WXZJ, Zhihui Qiyuan
VIEs, and Sixiang Qiyuan VIEs and their respective subsidiaries, based on a series of contractual arrangements by and among WXBJ, Zhihui
Qiyuan, and its registered shareholders and a series of contractual arrangements by and among WXZJ, Sixiang Qiyuan, and their respective
subsidiaries. As a result of these contractual arrangements, we exert control over the VIEs (namely, Zhihui Qiyuan VIEs and Sixiang Qiyuan
VIEs) and consolidate their financial results in our financial statements under U.S. GAAP. The VIEs (namely, Zhihui Qiyuan VIEs and Sixiang
Qiyuan VIEs) hold the licenses, approvals, and key assets that are essential for our operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
the opinion of our PRC counsel, Beijing Feng Yu Law Firm (&#21271;&#20140;&#38155;&#26161;&#24459;&#24072;&#20107;&#21153;&#25152;) (&#8220;Feng
Yu Law Firm&#8221;), based on its understanding of the relevant PRC laws and regulations, each of the contracts among WXBJ, Zhihui Qiyuan
and its registered shareholders is valid, binding, and enforceable in accordance with its terms, each of the contracts among WXZJ, Sixiang
Qiyuan and its registered shareholders is valid, binding, and enforceable in accordance with its terms. However, we have been further
advised by our PRC counsel that there are substantial uncertainties regarding the interpretation and application of current or future
relevant PRC laws and regulations. Thus, the PRC government may ultimately take a view contrary to the opinion of our PRC counsel. In
addition, PRC government authorities may deem that foreign ownership is directly or indirectly involved in each of the VIEs&#8217; shareholding
structure. If the WFOEs and its subsidiaries and the VIEs are found in violation of any PRC laws or regulations, or if the contractual
arrangements among WXBJ, Zhihui Qiyuan and its registered shareholders or the contractual arrangements among WXZJ, Sixiang Qiyuan and
its registered shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant
governmental authorities would have broad discretion in dealing with such violation, including, without limitation:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">revoking the business licenses
    and/or operating licenses of such entities;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">levying fines on our related
    PRC companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">confiscating any of our
    income that they deem to be obtained through illegal operations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discontinuing or placing
    restrictions or onerous conditions on our operations conducted by our related PRC companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">placing restrictions on
    our right to collect revenues;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">shutting down our servers
    or blocking our app/websites;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">requiring
        us to change our corporate structure and contractual arrangements;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">rejecting our future offerings
    in the public market;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">imposing additional conditions
    or requirements with which we may not be able to comply; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">taking other regulatory
    or enforcement actions against us that could be harmful to our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
imposition of any of these penalties may result in a material and adverse effect on our ability to conduct our business operations and
future financing. In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of our
consolidated affiliated entities or the right to receive their economic benefits, we would no longer be able to consolidate their financial
results.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may lose the ability to use and enjoy assets held by the VIEs that are important to our business if the VIEs declare bankruptcy or become
subject to a dissolution or liquidation proceeding.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
VIEs hold certain assets that are important to our operations, including the ICP License, SP License, the Internet Culture Operation
Permit, the Commercial Performance License, and Radio and Television Program Production and Operating Permit. Under our contractual arrangements,
the shareholders of the VIEs may not voluntarily liquidate the VIEs or approve them to sell, transfer, mortgage, or dispose of their
assets or legal or beneficial interests in the business in any manner without our prior consent. However, in the event that the shareholders
breach this obligation and voluntarily liquidate the&#160;VIEs, or the&#160;VIEs declare bankruptcy, or all or part of their assets become
subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could
materially and adversely affect our business, results of operations, and financial condition. Furthermore, if the&#160;VIEs undergo a
voluntary or involuntary liquidation proceeding, their shareholders or unrelated third-party creditors may claim rights to some or all
of its assets, hindering our ability to operate our business, which could materially and adversely affect our business, financial condition,
and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contractual
arrangements may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our
financial condition and the value of your investment.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by PRC
tax authorities. We may be subject to adverse tax consequences if the PRC tax authorities determine that the contractual arrangements
among WXBJ, Zhihui Qiyuan, and its registered shareholders or the contractual arrangements among WXZJ, Sixiang Qiyuan, and its registered
shareholders are not on an arm&#8217;s length basis and therefore constitute favorable transfer pricing. As a result, the PRC tax authorities
could require that VIEs adjust their taxable income upward for PRC tax purposes. Such an adjustment could increase VIEs&#8217; tax expenses
without reducing the tax expenses of WXBJ and/or WXZJ, subject the VIEs to late payment fees and other penalties for under-payment of
taxes, and result in the loss of any preferential tax treatment WXBJ and/or WXZJ may have. As a result, our consolidated results of operations
may be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may rely on dividends paid by our PRC subsidiaries to fund cash and financing requirements. Any limitation on the ability of our PRC
subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends
to holders of our ordinary shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
and our Hong Kong subsidiary are holding companies, and we may rely on dividends to be paid by our PRC subsidiaries for our cash and
financing requirements, including the funds necessary to pay dividends and other cash distributions to the holders of the ordinary shares
and pay back any debt it may incur. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the
debt may restrict their ability to pay dividends or make other distributions to us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
PRC laws and regulations, a wholly foreign-owned enterprise in China, such as WXBJ or WXZJ, may pay dividends only out of its accumulated
profits as determined in accordance with PRC accounting standards and regulations. In addition, according to current effective PRC laws
and regulations regarding foreign investment which may be updated following the effectiveness of PRC Foreign Investment Law, a wholly
foreign-owned enterprise is required to set aside at least 10% of its after-tax profits each year, after making up previous years&#8217;
accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such fund reaches 50% of its registered
capital. At the discretion of the board of directors of the wholly foreign-owned enterprise, it may allocate a portion of its after-tax
profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are
not distributable as cash dividends. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions
to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business,
pay dividends, or otherwise fund and conduct our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
the custodians or authorized persons of our controlling non-tangible assets, including chops and seals, fail to fulfill their responsibilities,
or misappropriate or misuse these assets, our business and operations may be materially and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature.
Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security
Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The
chops of our PRC subsidiaries and the VIEs are generally held securely by the personnel designated or approved by us in accordance with
our internal control procedures. To the extent those chops are not kept safe, are stolen, or are used by unauthorized persons or for
unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised and those corporate entities
may be bound to abide by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power
and authority to do so. If any of our authorized personnel obtains, misuses, or misappropriates our chops for whatever reason, we could
experience disruptions in our operations. We may also have to take corporate or legal action, which could require significant time and
resources to resolve while distracting management from our operations. Any of the foregoing could adversely affect our business and results
of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Risk
Factors Relating to Doing Business in China</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Uncertainties
in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC legal system is based on written statutes where prior court decisions have limited value as precedents. Our PRC subsidiaries and
the VIEs, in particular WXBJ and WXZJ, two wholly foreign-owned enterprises, are subject to laws and regulations applicable to foreign-invested
enterprises as well as various Chinese laws and regulations generally applicable to companies incorporated in China. However, since these
laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations,
and rules are not always uniform, and enforcement of these laws, regulations, and rules involves uncertainties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">From
time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative
and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult
to evaluate the outcome of administrative and court proceedings and the level of legal protection we may receive. Furthermore, the PRC
legal system is based in part on government policies and internal rules that may have retroactive effect. As a result, we may not be
aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over
the scope and effect of our contractual, property (including intellectual property) and procedural rights, could materially and adversely
affect our business and impede our ability to continue our operations.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Regulation
and censorship of information disseminated over the mobile and Internet in China may adversely affect our business and subject us to
liability for streaming content or content posted on our platforms.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Internet
companies in China are subject to a variety of existing and new rules, regulations, policies, and license and permit requirements. In
connection with enforcing these rules, regulations, policies, and requirements, relevant government authorities may suspend services
by, or revoke licenses of, any Internet or mobile content service provider that is deemed to provide illicit content online or on mobile
devices, and such activities may be intensified in connection with any ongoing government campaigns to eliminate prohibited content online.
For example, in 2016, the Office of the Anti-Pornography and Illegal Publications Working Group, the Cyberspace Administration of China,
the Ministry of Industry and Information Technology, the Ministry of Culture and the Ministry of Public Security jointly launched a &#8220;Clean
Up the Internet 2016&#8221; campaign. Based on publicly available information, the campaign aims to eliminate pornographic information
and content in the Internet information services industry by, among other things, holding liable individuals and corporate entities that
facilitate the distribution of pornographic information and content. Publicly traded Chinese Internet companies voluntarily initiated
self-investigations to filter and remove content from their websites and cloud servers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
endeavor to eliminate illicit content from our platforms. We have made substantial investments in resources to monitor content that broadcasters
generate on our platforms and the way in which our users engage with each other through our platforms. We use a variety of methods to
ensure our platforms remain a healthy and positive experience for our users. Although we employ these methods to filter content posted
on our platforms, we cannot be sure that our internal content control efforts will be sufficient to remove all content that may be viewed
as indecent or otherwise non-compliant with PRC law and regulations. Government standards and interpretations as to what constitutes
illicit online content or behavior are subject to interpretation and may change in a manner that could render our current monitoring
efforts insufficient. The Chinese government has wide discretion in regulating online activities and, irrespective of our efforts to
control the content on our platforms, government campaigns and other actions to reduce illicit content and activities could subject us
to negative press or regulatory challenges and sanctions, including fines, suspension or revocation of our licenses to operate in China
or a suspension or ban on our mobile or online platform, including suspension or closure of one or more parts of or our entire business.
Further, our senior management could be held criminally liable if we are deemed to be profiting from illicit content on our platforms.
Although our business and operations have not been materially and adversely affected by government campaigns or any other regulatory
actions in the past, there is no assurance that our business and operations will be immune from government actions or sanctions in the
future. If government actions or sanctions are brought against us, or if there are widespread rumors that government actions or sanctions
have been brought against us, our reputation could be harmed and we may lose users and customers. As a result, our revenues and results
of operations may be materially and adversely affected and the value of our Class A Ordinary Shares could be dramatically reduced.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Adverse
Changes in China&#8217;s political, economic social conditions or government policies could have a material adverse effect on the overall
economic growth of China, which could materially and adversely affect the growth of the business and operations of the VIES and our PRC
subsidiaries.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement,
level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented
measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and
the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still
owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development
by imposing industrial policies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
Chinese government also exercises significant control over China&#8217;s economic growth through allocating resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or
companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; ">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">While
the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various
sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws
and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely
affect the future business and operating results and the competitive position of the VIEs and our PRC subsidiaries. The Chinese government
has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit
the overall Chinese economy but may have a negative effect on the VIEs and our PRC subsidiaries. In addition, in the past the Chinese
government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures
may cause decreased economic activity in China, which may adversely affect the future business and operating results of the VIEs and
our PRC subsidiaries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
PRC government&#8217;s significant oversight over our business operation could result in a material adverse change in the operations
of the VIEs and our company as a whole and the value of our Class A ordinary shares. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
conduct our business in China primarily through our PRC subsidiaries (including WFOEs) and the VIEs, which are subject to Chinese government&#8217;s
significant oversight and discretion. The Chinese government may intervene or influence the current and future operations of our PRC
subsidiaries and the VIEs at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers
likes ourselves, which could result in a material change in our operations and the value of our securities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
the event that the Chinese government exert more oversight and control over offerings that are conducted overseas and foreign investment
in China-based issuers, relevant Chinese regulatory authorities could disallow contractual arrangement under the VIE agreements and hinder
our ability to exert contractual control over or consolidate the VIEs under US. GAAP. the VIEs, which would likely result in a material
change in operations and/or value of the Company&#8217;s securities, including that it could cause the value of such securities to significantly
decline or become worthless.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Rules
and regulations in China can change quickly with little or no advance notice and their interpretation and the implementation involve
uncertainty, which could materially and adversely affect the operations of the VIEs and our company as a whole and the value of our securities.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC government may take a series of regulatory actions and statements to regulate business operations in China from time to time with
little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based
companies listed overseas using variable interest entity structures which has been implemented by CSRC, adopting new measures to extend
the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the General Office of the
Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on
illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things,
requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance
supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the
PRC securities laws. On December 28, 2021, the Cyberspace Administration of China (&#8220;CAC&#8221;) and certain other governmental
authorities issued the Measures of Cybersecurity Review (effective as of February 15, 2022), requiring that cyberspace operators with
personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity
Review. Furthermore, on February 17, 2023, the CSRC issued Trial Administrative Measures of Overseas Securities Offering and Listing
by Domestic Enterprises (effective as of March 31, 2023), requiring the company that directly or indirectly go to public offering overseas
shall make filing with the CSRC within three days after its completion of offering. These new laws and regulations can be complex and
stringent, and many are subject to change and uncertain interpretation, which could result in claims, change to the data and other business
practices of the VIEs and our company, regulatory investigations, penalties, increased cost of operations, or declines in user growth
or engagement, or otherwise affect the business of the VIEs. As of the date of this annual report, we have not received any inquiry or
notice or any objections to this annual report from CSRC, the CAC or any other PRC governmental authorities that have jurisdiction over
our operations. However, given the current regulatory environment in China, there remains uncertainty regarding the interpretation and
enforcement of the laws of China. Any future quick changes of the laws and rules with little or no advice notice and the uncertainty
resulted therefrom could materially and adversely disrupt and affect the operation and future financing of our PRC subsidiaries, the
VIEs and our company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to
inspect our auditors for two consecutive years. The delisting and the cessation of trading of our shares, or the threat of their being
delisted and prohibited from being traded, may materially and adversely affect the value of your investment.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines
that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB
for three consecutive years beginning in 2021, the SEC shall prohibit such shares from being traded on a national securities exchange
or in the over-the-counter trading market in the U.S.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements
of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a &#8220;non-inspection&#8221;
year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA
Act, including the listing and trading prohibition requirements described above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law, would reduce
the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 5, 2021, the SEC approved Rule 6100 adopted by the PCAOB to establish a framework for the PCAOB&#8217;s determinations under
the HFCA Act that the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction
because of a position taken by an authority in that jurisdiction.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 2, 2021, the SEC issued amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission
and disclosure requirements in the HFCA Act, which require us to identify in our annual report on Form 20-F, (1) the auditors that provided
opinions to the financial statements presented in the annual report, (2) the location where the auditors&#8217; report was issued, and
(3) the PCAOB ID number of the audit firm or branch that performed the audit work. If the SEC determines that we have three consecutive
non-inspection years, the SEC will issue stop order to prohibit the trading of our shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 16, 2021, the PCAOB issued a Determination Report which reported that the PCAOB is unable to inspect or investigate completely
registered public accounting firms headquartered in: (1) mainland China of the People&#8217;s Republic of China, because of a position
taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region of the PRC, because of a position
taken by one or more authorities in Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">On
August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance
of the People&#8217;s Republic of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public
accounting firms headquartered in mainland China and Hong Kong. The Statement of Protocol gives the PCAOB sole discretion to select the
firms, audit engagements and potential violations it inspects and investigates and puts in place procedures for PCAOB inspectors and
investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed. In
addition, the Statement of Protocol grants the PCAOB direct access to interview and take testimony from all personnel associated with
the audits the PCAOB inspects or investigates. While significant, the Statement of Protocol is only a first step. Uncertainties still
exist as to whether and how this new Statement of Protocol will be implemented. The PCAOB is required to reassess its determinations
by the end of 2022 and there are uncertainties whether the PCAOB will determine it is still unable to inspect or investigate completely
registered public accounting firms in mainland China and Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public
accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations
that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and
Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting
firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our
auditor&#8217;s control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans
to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations
as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA
if needed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which, among other things, amended the HFCAA to reduce
the number of consecutive years an issuer can be identified as a Commission-Identified Issuer before the Securities and Exchange Commission
must impose an initial trading prohibition on the issuer&#8217;s securities from three years to two years. Therefore, once an issuer
is identified as a Commission-Identified Issuer for two consecutive years, the Securities and Exchange Commission is required under the
HCFAA to prohibit the trading of the issuer&#8217;s securities on a national securities exchange and in the over-the-counter market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
former auditor, Friedman LLP, as an auditor of companies that are traded publicly in the United States and a firm registered with the
PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess their compliance with
the applicable professional standards. We are not aware of any reasons to believe or conclude that Friedman LLP would not permit an inspection
by the PCAOB or that it may not be subject to such inspection. However, given the recent developments, we cannot assure you whether PCAOB
or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor&#8217;s
audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or
experience as it relates to the audit of our financial statements.&#160; Our shares could still be delisted and prohibited from being
traded over-the-counter under the HFCA Act PCAOB&#160;determines in the future that it is unable to fully inspect or investigate our
auditor&#160;which has a presence in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
current auditor, OneStop Assurance PAC, as an auditor of companies that are traded publicly in the United States and a firm registered
with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess their compliance
with the applicable professional standards. We are not aware of any reasons to believe or conclude that OneStop Assurance PAC would not
permit an inspection by the PCAOB or that it may not be subject to such inspection. However, given the recent developments, we cannot
assure you whether PCAOB or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness
of our auditor&#8217;s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources,
geographic reach or experience as it relates to the audit of our financial statements.&#160; Our shares could still be delisted and prohibited
from being traded over-the-counter under the HFCA Act PCAOB&#160;determines in the future that it is unable to fully inspect or investigate
our auditor&#160;which has a presence in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Furthermore,
there is no guarantee that future audit reports will be prepared by auditors that are completely inspected by the PCAOB, and, as such,
future investors may be deprived of such inspections, which could result in limitations or restrictions to SHC&#8217;s access of the
U.S. capital markets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
filling of the CSRC will be required and approval and/or other requirements from other PRC governmental authorities may be required in
connection with an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will
be able to complete such filing or obtain such approval.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises,
or the Trial Measures, which will become effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules
No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic
Enterprises and relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC&#8217;s official
website. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic principles of the Draft Administrative
Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing
by domestic enterprises. Under the Trial Measures and the Guidance Rules and Notice, domestic enterprises conducting overseas securities
offering and listing, either directly or indirectly, shall complete filings with the CSRC pursuant to the Trial Measures&#8217; requirements
within three working days following the submission of an application for initial public offering or listing. Starting from March 31,
2023, enterprises that have been listed overseas or satisfy all of the following conditions shall be deemed as &#8220;Grandfathered Issuers&#8221;
and are not required to complete the overseas listing filing immediately, but shall complete filings as required if they conduct refinancing
or are involved in other circumstances that require filing with the CSRC: (i) the application for indirect overseas offering or listing
shall have been approved by the relevant overseas regulatory authority or stock exchange prior to March 31, 2023 (as the SEC does not
approve or disapprove of an offering, this requirement is interpreted to be the SEC&#8217;s declaration of the registration statement
to be effective with respect to this offering), (ii) the enterprise is not required to reapply for the approval of the relevant overseas
regulatory authority or stock exchange, and (iii) such overseas securities offering or listing shall be completed before September 30,
2023. Starting from March 31, 2023, domestic enterprises that have submitted valid applications for overseas offerings and listing but
have not obtained the approval from relevant overseas regulatory authority or overseas stock exchange shall complete filings with the
CSRC prior to their overseas offering and listings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
PRC counsel, has advised us that, we will not be required to submit an application to the CSRC for the approval regarding the Company&#8217;s
listing shares on Nasdaq because the Company has already been listed before March 31, 2023. However, if the Company issues additional
securities for refinancing or acquisition of domestic assets, or go listing in other public markets, it shall make filling with the CSRC
within three days after completion of such offering, and may be subject to pre-examination, confirmation or approval from the competent
PRC authorities governing our business operation in China, such as MIIT and CAC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&amp;A Rules, purport to
require offshore special purpose vehicles that are controlled by PRC companies or individuals and that have been formed for the purpose
of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies or assets to obtain CSRC approval
prior to publicly listing their securities on an overseas stock exchange. The interpretation and application of the regulations remain
unclear, and whether such M&amp;A Rules will be abolished entirely by the authorities, or particularly, replaced partially by new regulations
such as the Trial Measures. If a governmental approval is still required, it is uncertain how long it will take for us to obtain such
approval, and, even if we obtain such approval, the approval could be rescinded. Any failure to obtain or a delay in obtaining the requisite
governmental approval or filings for an offering, or a rescission of such CSRC approval or filing if obtained by us, may subject us to
sanctions imposed by the relevant PRC regulatory authority, which could include fines and penalties on our and the VIEs&#8217; operations
in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially
and adversely affect our business, financial condition, and results of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
PRC counsel, has advised us that, based on its understanding of the M&amp;A Rules, we will not be required to submit an additional application
to the CSRC for the approval under the M&amp;A Rules for an offering. However, our PRC counsel has further advised us that there remains
some uncertainty as to how the M&amp;A Rules will be interpreted or implemented in the context of an overseas offering, especially by
such governmental authorities other than CSRC, and its opinions summarized above are subject to any new laws, rules and regulations or
detailed implementations and interpretations in any form relating to the M&amp;A Rules, if any. We cannot assure you that relevant PRC
governmental authorities, including the CSRC, would reach the same conclusion as our PRC counsel, and hence, we may face regulatory actions
or other sanctions from them. Furthermore, relevant PRC governmental authorities promulgated the Opinions on Strictly Cracking Down Illegal
Securities Activities, which provided that the administration and supervision of overseas-listed China-based companies will be strengthened,
and the special provisions of the State Council on overseas issuance and listing of shares by such companies will be revised, clarifying
the responsibilities of domestic industry competent authorities and regulatory authorities. However, the Opinions on Strictly Cracking
Down Illegal Securities Activities only provides principle rules, leaving uncertainties regarding the interpretation and implementation
of these opinions. It is possible that any new rules or regulations may impose additional requirements on us. In addition, on December
28, 2021, the Cyberspace Administration of China (&#8220;CAC&#8221;) and certain other governmental authorities issued the Measures of
Cybersecurity Review (effective as of February 15, 2022), according to which, among others, operators of &#8220;critical information
infrastructure&#8221; or data processors holding over one million users&#8217; personal information shall apply to the Cybersecurity
Review Office for a cybersecurity review before any listing on a foreign stock exchange. If it is determined in the future that CAC approval
or other procedural requirements from any other governmental authorities are required to be met for and prior to an additional offering,
it is uncertain whether we can or how long it will take us to obtain such approval or complete such procedures and any such approval
could be rescinded. Any failure to obtain or delay in obtaining such approval or completing such procedures for an offering, or a rescission
of any such approval, could subject us to sanctions by the relevant PRC governmental authorities. The governmental authorities may impose
restrictions and penalties on our operations in China, such as the suspension of our apps and services, revocation of our licenses, or
shutting down part or all of our operations, limit our ability to pay dividends outside of China, delay or restrict the repatriation
of the proceeds from an offering into China or take other actions that could have a material adverse effect on our business, financial
condition, results of operations and prospects, as well as the trading price of our Class A ordinary shares. The PRC governmental authorities
may also take actions requiring us, or making it advisable for us, to halt an offering before settlement and delivery of the Class A
ordinary shares offered hereby. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement
and delivery, you do so at the risk that settlement and delivery may not occur. In addition, if the PRC governmental authorities later
promulgate new rules or explanations requiring that we obtain their approvals for filings, registrations or other kinds of authorizations
for an offering, we cannot assure you that we can obtain the approval, authorizations, or complete required procedures or other requirements
in a timely manner, or at all, or obtain a waiver of the requisite requirements if and when procedures are established to obtain such
a waiver.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
VIEs may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply
with applicable laws and obligations could have a material and adverse effect on the business, financial condition and results of operations
of the VIEs and our company as a whole.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
VIEs are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with
applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations.
We may be subject to various risks and costs associated with the collection, use, sharing, retention, security, and transfer of confidential
and private information, such as personal information and other data. This data is wide ranging and relates to our employees, users,
anchors, contractors and other counterparties and third parties.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 10, 2021, the Standing Committee of the National People&#8217;s Congress of China promulgated the Data Security Law which shall
take effect on September 1, 2021. The Data Security Law provides for data security and privacy obligations of entities and individuals
carrying out data activities, prohibits entities and individuals in China from providing any foreign judicial or law enforcement authority
with any data stored in China without approval from the competent PRC authority, and sets forth the legal liabilities of entities and
individuals found to be in violation of their data protection obligations, including rectification order, warning, fines of up to RMB10
million, suspension of relevant business, and revocation of business permits or licenses.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 20, 2021, the Standing Committee of the National People&#8217;s Congress adopted the Personal Information Security Law, which
shall come into force as of November 1, 2021. The Personal Information Protection Law includes the basic rules for personal information
processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing
activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and
use of personal information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 28, 2021, the CAC and twelve other PRC regulatory authorities jointly revised and issued the Cyber Security Review Measures
(&#8220;the Review Measures&#8221;), which became effective on February 15, 2022. The Review Measures provides, among others, (i) the
purchase of cyber products and services by critical information infrastructure operators (the &#8220;CIIOs&#8221;) and the network platform
operators (the &#8220;Network Platform Operators&#8221;) which engage in data processing activities that affects or may affect national
security shall be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the
implementation of cybersecurity review under the CAC; and (ii) the Network Platform Operators with personal information data of more
than one million users that seek for listing in a foreign country are obliged to apply for a cybersecurity review by the Cybersecurity
Review Office. On November 14, 2021, the CAC published the Regulations on the Administration of Network Data Security (Draft for Comment)
to open for public consultation, which stipulates that if a data processor proposes to be listed abroad or provide personal information
outside the territory of PRC, it shall be subject to certain security assessment and filing requirements in CAC or competent authorities.
As advised by our PRC legal counsel, we believe that we and our PRC subsidiaries and the VIEs are not required to apply for a cyber security
review with CAC, since we listed our Ordinary Shares on the Nasdaq before the effective date of the Review Measures, and our PRC subsidiaries
and the VIEs as the &#8220;network platform operators&#8221; will not be subject to CAC&#8217;s review or approval regarding data cyber
security under other current-effective CAC rules, since that, (A) all of collection and processing of any personal information or other
data in the ordinary course of business are conducted by our PRC subsidiaries and the VIEs within the territory of PRC, (B) none of our
PRC subsidiaries or the VIEs provides any personal information or operational data outside the territory of PRC, (C) such personal information
or operational data handled by our PRC subsidiaries and the VIEs will not be construed as important data threatening China&#8217;s national
security, and (D) none of our PRC subsidiaries or the VIEs will fell under the &#8220;critical information infrastructure operators&#8221;,
which are subject to direct and more strict regulatory supervision under CAC rules. However, the Review Measures do not provide any explanation
or interpretation of &#8220;overseas listing&#8221; or &#8220;affect or may affect national security,&#8221; and Chinese government may
have broad discretion in interpreting and enforcing these laws and regulations, which may also require the Company to make filings or
obtain approval from CAC or other competent authorities with respect to its further offerings in overseas public markets. We cannot predict
the impact of the review measures, if any, at this stage, and we will closely monitor and assess the statutory developments in this regard.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.85pt"><span style="font-family: Times New Roman, Times, Serif">On
July 7, 2022, the CAC promulgated the Measures on Security Assessment of Cross-border Data Transfer, which became effective on September
1, 2022. The data export measures require that any data processor who processes or exports personal information exceeding a certain volume
threshold pursuant to the measures shall apply for a security assessment by the CAC before transferring any personal information abroad,
including the following circumstances: (i) important data will be provided overseas by any data processor; (ii) personal information
will be provided overseas by any operator of critical information infrastructure or any data processor who processes the personal information
of more than 1,000,000 individuals; (iii) personal information will be provided overseas by any data processor who has provided the personal
information of more than 100,000 individuals in aggregate or has provided the sensitive personal information of more than 10,000 individuals
in aggregate since January 1, 2021; and (iv) other circumstances where the security assessment is required as prescribed by the CAC.
A data processor shall, before applying for the security assessment of an outbound data transfer, conduct a self-assessment of the risks
involved in the outbound data transfer. The security assessment of a cross-border data transfer shall focus on assessing the risks that
may be brought about by the cross-border data transfer concerning national security, public interests, or the lawful rights and interests
of individuals or organizations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
VIEs do not collect, process or use personal information of entities or individuals other than what is necessary for our business and
do not disseminate such information. Although we believe the VIEs currently are not required to obtain clearance from the Cyberspace
Administration of China under the Measures for Cybersecurity Review or the Opinions on Strictly Cracking Down on Illegal Securities Activities,
we face uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance
can be timely obtained, or at all.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Compliance
with the PRC Cybersecurity Law, the PRC National Security Law, the Data Security Law, the Personal Information Protection Law, the Cybersecurity
Review Measures, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, including data security
and personal information protection laws, may result in additional expenses to us and subject us to negative publicity, which could harm
our reputation among users and negatively affect the trading price of our shares in the future. There are also uncertainties with respect
to how the PRC Cybersecurity Law, the PRC National Security Law and the Data Security Law will be implemented and interpreted in practice.
PRC regulators, including the Ministry of Public Security, the MIIT, the SAMR and the Cyberspace Administration of China, have been increasingly
focused on regulation in the areas of data security and data protection, including for mobile apps, and are enhancing the protection
of privacy and data security by rule-making and enforcement actions at central and local levels. We expect that these areas will receive
greater and continued attention and scrutiny from regulators and the public going forward, which could increase our compliance costs
and subject us to heightened risks and challenges associated with data security and protection. If we are unable to manage these risks,
we could become subject to penalties, including fines, suspension of business, prohibition against new user registration (even for a
short period of time) and revocation of required licenses, and our reputation and results of operations could be materially and adversely
affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>It
may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Shareholder
claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality
in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations
or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities
regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the
securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities
regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed
interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator,
such as the Department of Justice, the SEC, the PCAOB and other authorities, to directly conduct investigation or evidence collection
activities within China may further increase difficulties faced by you in protecting your interests.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation or collect evidence within
the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the
PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by
way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority
of the PRC.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Failure
to comply with laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause
us to lose customers or otherwise harm our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
PRC subsidiaries and the VIEs in China are subject to regulation by various governmental agencies in China, including agencies responsible
for monitoring and enforcing compliance with various legal obligations, such as value-added telecommunication laws and regulations, privacy
and data protection-related laws and regulations, intellectual property laws, employment and labor laws, workplace safety, consumer protection
laws, governmental trade laws, import and export controls, anti-corruption and anti-bribery laws, and tax laws and regulations. These
laws and regulations impose added costs on our business. Noncompliance with applicable regulations or requirements could subject our
PRC subsidiaries and the VIEs to:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investigations, enforcement actions, and sanctions;
    </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">mandatory changes to our network and products; </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">disgorgement of profits, fines, and damages; </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">civil and criminal penalties or injunctions; </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">claims for damages by our customers or channel partners;
    </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">termination of contracts; </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">loss of intellectual property rights; </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure to obtain, maintain or renew certain licenses,
    approvals, permits, registrations or filings </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">necessary to conduct our operations; and </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">temporary or permanent debarment from sales to public
    service organizations. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">If
any governmental sanctions are imposed, or if our PRC subsidiaries or the VIEs do not prevail in any possible civil or criminal litigation,
the business, results of operations, and financial condition of our PRC subsidiaries and the VIEs could be adversely affected. In addition,
responding to any action will likely result in a significant diversion of our management&#8217;s attention and resources and an increase
in professional fees. Enforcement actions and sanctions could materially harm the business, results of operations, and financial condition
of our PRC subsidiaries and the VIEs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Additionally,
companies in the technology industry have recently experienced increased regulatory scrutiny. Any similar reviews by regulatory agencies
or legislatures may result in substantial regulatory fines, changes to the business practices of our PRC subsidiaries and the VIEs, and
other penalties, which could negatively affect the business and results of operations of our PRC subsidiaries and the VIEs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Changes
in social, political, and regulatory conditions or in laws and policies governing a wide range of topics may cause our PRC subsidiaries
and the VIEs to change their business practices. Further, the expansion by our PRC subsidiaries and the VIEs into a variety of new fields
also could raise a number of new regulatory issues. These factors could negatively affect the business and results of operations of our
PRC subsidiaries and the VIEs in material ways.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may rely on dividends and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements
we may have, and any limitation on the ability of our Chinese subsidiaries to make payments to us could have a material and adverse effect
on our ability to conduct our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Scienjoy
Holding Corporation, the British Virgin Islands holding company, may rely on dividend payments from our PRC subsidiaries for cash and
financing requirements we may have, including the funds necessary to pay dividends and other cash distributions to our shareholders or
to service any debt we may incur. Our WFOEs receive payments from the VIEs pursuant to the VIE agreements. Our WFOEs also receive payments
from their PRC operating subsidiaries. WFOEs may make distribution of such payments to Scienjoy International Limited, our Hong Kong
subsidiary, then further distribute the funds to Scienjoy Holding Corporation through its fully owned subsidiary, Scienjoy Inc. If any
of our PRC subsidiaries or the VIEs incur debt on its own behalf in the future, the instruments governing the debt may restrict its ability
to pay dividends or make other distributions to us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">According
to the Foreign Investment Law of the People&#8217;s Republic of China and its implementing rules, which jointly established the legal
framework for the administration of foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely
transfer into or out of China its contributions, profits, capital earnings, income from asset disposal, intellectual property rights,
royalties acquired, compensation or indemnity legally obtained, and income from liquidation, made or derived within the territory of
China in RMB or any foreign currency, and any entity or individual shall not illegally restrict such transfer in terms of the currency,
amount and frequency. According to the Company Law of the People&#8217;s Republic of China and other Chinese laws and regulations, our
PRC subsidiaries may pay dividends only out of their respective accumulated profits as determined in accordance with Chinese accounting
standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax
profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered
capital. Where the statutory reserve fund is insufficient to cover any loss a PRC subsidiary incurred in the previous financial year,
its current financial year&#8217;s accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund
is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be
distributed to us as dividends. At their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on
Chinese accounting standards to a discretionary reserve fund.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
PRC subsidiaries and the VIEs receive substantially all of their revenue in Renminbi. Renminbi is not freely convertible into other currencies.
As result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use their potential future Renminbi
revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and,
in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability
of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make
other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under the
&#8220;current account,&#8221; which includes dividends, trade and service-related foreign exchange transactions, but not under the &#8220;capital
account,&#8221; which includes foreign direct investment and foreign currency debt. Currently, our PRC subsidiaries may purchase foreign
currency for settlement of &#8220;current account transactions,&#8221; including payment of dividends to us, without the approval of
SAFE by complying with certain procedural requirements. However, the relevant Chinese governmental authorities may limit or eliminate
our ability to purchase foreign currencies in the future for current account transactions. The Chinese government may continue to strengthen
its capital controls, and additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions
falling under both the current account and the capital account. Any existing and future restrictions on currency exchange may limit our
ability to utilize revenue generated in renminbi to fund our business activities outside of China or pay dividends in foreign currencies
to holders of our securities. Foreign exchange transactions under the capital account remain subject to limitations and require approvals
from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability to obtain foreign
currency through debt or equity financing for our subsidiaries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
response to the persistent capital outflow in China and renminbi&#8217;s depreciation against the U.S. dollar in the fourth quarter of
2016, the People&#8217;s Bank of China (&#8220;PBOC&#8221;) and the SAFE have promulgated a series of capital controls in early 2017,
including stricter vetting procedures for domestic companies to remit foreign currency for overseas investments, dividends payments and
shareholder loan repayments.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
Chinese government may continue to strengthen its capital controls, and more restrictions and substantial vetting processes may be put
forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability
of our Chinese subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to
grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Uncertainties
exist with respect to the interpretation and implementation of Anti-Monopoly Guidelines for Internet Platforms and how it may impact
the business operations of the VIEs.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
February 2021, the Anti-Monopoly Guidelines for Internet Platforms was promulgated by the Anti-monopoly Commission of the PRC State Council.
The Anti-Monopoly Guidelines for Internet Platforms is consistent with the Anti-Monopoly Law of PRC and prohibits monopoly agreements,
abuse of dominant position and concentration of undertakings that may have the effect of eliminating or restricting competitions in the
field of platform economy. More specifically, the Anti-Monopoly Guidelines for Internet Platforms outlines certain practices that may,
if without justifiable reasons, constitute abuse of dominant position, including without limitation, tailored pricing using big data
and analytics, actions or arrangements seen as exclusivity arrangements, using technology means to block competitors&#8217; interface,
using bundled services to sell services or products, and compulsory collection of user data. Besides, Anti-Monopoly Guidelines for Internet
Platforms expressly states that concentration involving VIEs will also be subject to antitrust filing requirements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
April 2021, the State Administration for Market Regulation (the &#8220;SAMR&#8221;), together with certain other PRC government authorities
convened an administrative guidance meeting, focusing on unfair competition acts in community group buying, self-inspection and rectification
by major internet companies of possible violations of anti-monopoly, anti-unfair competition, tax and other related laws and regulations,
and requesting such companies to comply with relevant laws and regulations strictly and be subject to public supervision. In addition,
many internet companies, including the over 30 companies which attended such administrative guidance meeting, are required to conduct
a comprehensive self-inspection and make necessary rectification accordingly. The SAMR has stated it will organize and conduct inspections
on the companies&#8217; rectification results. If the companies are found to conduct illegal activities, more severe penalties are expected
to be imposed on them in accordance with the laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "></p><div>

</div><!-- Field: Page; Sequence: 44; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">On
June 24, 2022, the Standing Committee of the National People&#8217;s Congress promulgated the Decision on Revising the Anti-monopoly Law, which
took effect on August 1, 2022. The revised Anti-Monopoly Law provides, among others, that business operators shall not abuse data, algorithms,
technology, capital advantages and platform rules to conduct monopoly activities. The revised Anti-Monopoly Law also requires relevant
government authorities to strengthen the examination of undertaking concentration in important areas and establish the hierarchical review
system of undertaking concentration, and enhances penalties for the violation of the regulations regarding undertaking concentration
and other monopoly activities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Since
the Anti-Monopoly Guidelines for Internet Platforms are relatively new, uncertainties still exist in relation to its interpretation and
implementation, although we and the VIEs do not believe we or the VIEs engage in any foregoing situations, we cannot assure you that
our business operations will comply with such regulation in all respects, and any failure or perceived failure by us to comply with such
regulation may result in governmental investigations, fines and/or other sanctions on us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;
&#160;<b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
recent joint statement by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S. House
of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments
could add uncertainties to our future offerings, business operations share price and reputation.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">U.S.
public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative
publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative
publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial
accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">On
December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their
oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman
Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the
risks associated with investing in companies based in or have substantial operations in emerging markets including China, reiterating
past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work papers in
China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice and other
U.S. regulatory actions, including in instances of fraud, in emerging markets generally.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">On
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned
or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not
subject to PCAOB inspection. If the PCAOB is unable to inspect the company&#8217;s auditors for three consecutive years, the issuer&#8217;s
securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding
Foreign Companies Accountable Act.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">On
May 18, 2021, NASDAQ filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in a &#8220;Restrictive Market,&#8221; (ii) prohibit Restrictive Market companies from directly listing on NASDAQ Capital Market, and
only permit them to list on NASDAQ Global Select or NASDAQ Global Market in connection with a direct listing and (iii) apply additional
and more stringent criteria to an applicant or listed company based on the qualifications of the company&#8217;s auditors.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">On
October&#160;4, 2021, the SEC approved NASDAQ&#8217;s revised proposals for the rule changes. As a result of such scrutiny, criticism
and negative publicity, the publicly traded stock of many U.S.&#160;listed Chinese companies sharply decreased in value and, in some
cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and
are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide&#160;scrutiny,
criticism and negative publicity will have on us, our business and our share price. If we become the subject of any unfavorable allegations,
whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations
and/or defend our Company. This situation will be costly and time consuming and distract our management from developing our growth. If
such allegations are not proven to be groundless, we and our operating subsidiary&#8217;s business operations will be severely affected
and you could sustain a significant decline in the value of our Class A ordinary share.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>You
may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions against us or our
management named in the prospectus based on foreign laws,&#160;and therefore you may not be afforded the same protection as provided
to investors in U.S. domestic companies.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; ">We
are an exempted company incorporated under the laws of the British Virgin Islands and conduct most of our revenue-generating operations
in mainland China. In addition,&#160;certain of&#160;our executive officers and directors are PRC nationals and reside within China for
a significant portion of the time. &#160;All or a substantial portion of the assets of these persons are also located outside the United
States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United
States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if
you are successful in bringing an action of this kind, the laws of the British Virgin Islands and of China may render you unable to enforce
a judgment against us, our assets, our directors and officers or their assets. Therefore, you may not be able to enjoy the same protection
provided by various U.S. authorities as it is provided to investors in U.S. domestic companies. For more information regarding the relevant
laws of the British Virgin Islands and China.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Currently,
there is no law or regulation specifically governing virtual asset property rights and therefore it is not clear what liabilities, if
any, live streaming platform operators may have for virtual assets.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">While
participating on our platforms, our users acquire, purchase, and accumulate some virtual assets, such as gifts or certain status. Such
virtual assets can be important to users and have monetary value and, in some cases, are sold for actual money. In practice, virtual
assets can be lost for various reasons, often through other users&#8217; unauthorized use of another user account and occasionally through
data loss caused by delay of network service, network crash, or hacking activities. Currently, there is no PRC law or regulation specifically
governing virtual asset property rights. As a result, there is uncertainty as to who the legal owner of virtual assets is, whether and
how the ownership of virtual assets is protected by law, and whether an operator of live streaming platform such as us would have any
liability, whether in contract, tort or otherwise, to users or other interested parties, for loss of such virtual assets. Based on recent
PRC court judgments, the courts have typically held online platform operators liable for losses of virtual assets by platform users and
ordered online platform operators to return the lost virtual items to users or pay damages and losses. In case of a loss of virtual assets,
we may be sued by our users and held liable for damages, which may negatively affect our reputation and business, results of operations,
and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Under
the PRC enterprise income tax law, we may be classified as a PRC &#8220;resident enterprise,&#8221; which could result in unfavorable
tax consequences to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the PRC enterprise income tax law that became effective on January 1, 2008 and other related rules and regulations published by PRC State
Taxation Administration, an enterprise established outside the PRC with &#8220;de facto management bodies&#8221; within the PRC is considered
a &#8220;resident enterprise&#8221; for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income
tax rate on our worldwide income. On April 22, 2009, the State Taxation Administration, or the SAT, issued the Circular Regarding the
Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprise on the Basis of De Facto Management
Bodies, or SAT Circular 82, which provides certain specific criteria for determining whether the &#8220;de facto management body&#8221;
of a PRC-controlled enterprise that is incorporated offshore is located in China. Further to SAT Circular 82, on August 3, 2011, the
State Taxation Administration issued the Administrative Measures of Enterprise Income Tax of Chinese-Controlled Offshore Incorporated
Resident Enterprises (Trial), or SAT Bulletin 45, which became effective on September 1, 2011, to provide more guidance on the implementation
of SAT Circular 82.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered a
PRC tax resident enterprise by virtue of having our &#8220;de facto management body&#8221; in China and will be subject to PRC enterprise
income tax on our worldwide income only if all of the following conditions are met: (a) the senior management and core management departments
in charge of our daily operations function have their presence mainly in the PRC; (b) our financial and human resources decisions are
subject to determination or approval by persons or bodies in the PRC; (c) our major assets, accounting books, company seals, and minutes
and files of our board and shareholders&#8217; meetings are located or kept in the PRC; and (d) not less than half of the enterprise&#8217;s
directors or senior management with voting rights habitually reside in the PRC. SAT Bulletin 45 provides further rules on residence status
determination, post-determination administration as well as competent tax authorities procedures.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Although
SAT Circular 82 and SAT Bulletin 45 apply only to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise group
and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect SAT&#8217;s general
position on how the term &#8220;de facto management body&#8221; could be applied in determining the tax resident status of offshore enterprises,
regardless of whether they are controlled by PRC enterprises, individuals, or foreigners.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
do not meet all of the conditions set forth in SAT Circular 82. Therefore, we believe that we should not be treated as a &#8220;resident
enterprise&#8221; for PRC tax purposes even if the standards for &#8220;de facto management body&#8221; prescribed in the SAT Circular
82 applied to us. For example, our minutes and files of the resolutions of our board of directors and the resolutions of our shareholders
are maintained outside the PRC.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">However,
it is possible that the PRC tax authorities may take a different view. If the PRC tax authorities determine that we or any Hong Kong
subsidiary is a PRC resident enterprise for PRC enterprise income tax purposes, our world-wide income could be subject to PRC tax at
a rate of 25%, which could reduce our net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations.
Although dividends paid by one PRC tax resident to another PRC tax resident should qualify as &#8220;tax-exempt income&#8221; under the
enterprise income tax law, we cannot assure you that dividends paid by our PRC subsidiary to us or any of our Hong Kong subsidiaries
will not be subject to a 10% withholding tax if we or our Hong Kong subsidiary were treated as a PRC resident enterprise. The PRC foreign
exchange control authorities, which enforce the withholding tax on dividends, and the PRC tax authorities have not yet issued guidance
with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income
tax purposes.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
we are treated as a resident enterprise, non-PRC resident shareholders may also be subject to PRC withholding tax on dividends paid by
us and PRC tax on gains realized on the sale or other disposition of our Class A ordinary shares, if such income is sourced from within
the PRC. The tax would be imposed at the rate of 10% in the case of non-PRC resident enterprise shareholders and 20% in the case of non-PRC
resident individual holders. In the case of dividends, we would be required to withhold the tax at source. Any PRC tax liability may
be reduced under applicable tax treaties or similar arrangements, but it is unclear whether a non-PRC shareholders company would be able
to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC
resident enterprise. Although we are incorporated in the British Virgin Islands, it remains unclear whether dividends received and gains
realized by our non-PRC resident shareholders will be regarded as income from sources within the PRC if we are classified as a PRC resident
enterprise. Any such tax will reduce the returns on your investment in us.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>There
are uncertainties with respect to indirect transfers of PRC taxable properties outside a public stock exchange.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
face uncertainties on the reporting and consequences on private equity financing transactions, private share transfers and share exchange
involving the transfer of shares in our company by non-resident investors. According to the Notice on Several Issues Concerning Enterprise
Income Tax for Indirect Share Transfer by Non-PRC Resident Enterprises, issued by the State Taxation Administration on February 3, 2015,
or SAT Circular 7, an &#8220;indirect transfer&#8221; of assets of a PRC resident enterprise, including a transfer of equity interests
in a non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct
transfer of PRC taxable properties, if such transaction lacks reasonable commercial purpose and was undertaken for the purpose of reducing,
avoiding or deferring PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and tax filing or withholding obligations may be triggered, depending on the nature of the PRC taxable properties being transferred.
According to SAT Circular 7, &#8220;PRC taxable properties&#8221; include assets of a PRC establishment or place of business, real properties
in the PRC, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being
a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. When determining if there is a &#8220;reasonable commercial
purpose&#8221; of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity
interest of the relevant offshore enterprise derives from PRC taxable properties; whether the assets of the relevant offshore enterprise
mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise
and its subsidiaries directly or indirectly holding PRC taxable properties have a real commercial nature which is evidenced by their
actual function and risk exposure; the duration of existence of the business model and organizational structure; the replicability of
the transaction by direct transfer of PRC taxable properties; and the tax situation of such indirect transfer outside China and its applicable
tax treaties or similar arrangements. In respect of an indirect offshore transfer of assets of a PRC establishment or place of business
of a foreign enterprise, the resulting gain is to be included with the annual enterprise filing of the PRC establishment or place of
business being transferred, and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer
relates to PRC real properties or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or
place of business of a non-resident enterprise, a PRC enterprise income tax at 10% would apply, subject to available preferential tax
treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the
withholding obligation. Where the payer fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the
competent tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default
interest. Currently, SAT Circular 7 does not apply to the sale of shares by investors through a public stock exchange where such shares
were acquired in a transaction on a public stock exchange.&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing and
withholding or tax payment obligations and associated penalties with respect to any internal restructuring, and our PRC subsidiary may
be requested to assist in the filing. Any PRC tax imposed on a transfer of our Class A ordinary shares not through a public stock exchange,
or any adjustment of such gains would cause us to incur additional costs and may have a negative impact on the value of your investment
in us.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Implementation
of the labor laws and regulations in China may adversely affect our business and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the labor contract law that took effect in January 2008, its implementation rules that took effect in September 2008 and its amendment
that took effect in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying
remuneration, determining the term of employees&#8217; probation and unilaterally terminating labor contracts. Due to lack of detailed
interpretative rules and uniform implementation practices and broad discretion of the local competent authorities, it is uncertain as
to how the labor contract law and its implementation rules will affect our current employment policies and practices. Our employment
policies and practices may violate the labor contract law or its implementation rules, and we may thus be subject to related penalties,
fines, or legal fees. Compliance with the labor contract law and its implementation rules may increase our operating expenses, in particular
its personnel expenses. In the event that we decide to terminate some of its employees or otherwise change its employment or labor practices,
the labor contract law and its implementation rules may limit its ability to affect those changes in a desirable or cost-effective manner,
which could adversely affect our business and results of operations. On October 28, 2010, the Standing Committee of the National People&#8217;s
Congress promulgated the PRC Social Insurance Law, or the Social Insurance Law, which became effective on July 1, 2011. According to
the Social Insurance Law and related rules and regulations, employees must participate in pension insurance, work-related injury insurance,
medical insurance, unemployment insurance, and maternity insurance and the employers must, together with their employees or separately,
pay the social insurance premiums for their employees. If the company has not fully paid such social insurance based on employee&#8217;s
actual salaries, it may face relevant authorities&#8217; investigation and examination, and subject to penalties or fines.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
expect our labor costs to increase due to the implementation of these laws and regulations, as updated from time to time. As the interpretation
and implementation of these laws and regulations are still evolving and become stricter, PRC tax authorities, for example, may become
the governmental agencies for collection and examination of each company&#8217;s withholding and payment of social insurance after 2019
according to related rules and policies. We cannot assure you that our employment practice will at all times be deemed in full compliance
with labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If our PRC subsidiaries
are deemed to have violated relevant labor laws and regulations, they can be required to provide additional compensation to their employees
and our business, results of operations, and financial condition could be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Further,
labor disputes, work stoppages or slowdowns at our company or any of our third-party service providers could significantly disrupt our
daily operation or our expansion plans and have a material adverse effect on our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>PRC
regulations relating to offshore investment activities by PRC residents may limit the ability of WXBJ and WXZJ (our indirect wholly-owned
subsidiaries in China) to increase our registered capital or distribute profits to us or otherwise expose us to liability and penalties
under PRC law.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
State Administration of Foreign Exchange (SAFE) promulgated the Circular on Relevant Issues Relating to Domestic Resident&#8217;s Investment
and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 and related rules and regulations
that require PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must
update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information
(including change of such PRC citizens or residents, name, and operation term), increases or decreases in investment amount, transfers
or exchanges of shares, or mergers or divisions. According to the Notice on Further Simplifying and Improving Policies for the Foreign
Exchange Administration of Direct Investment released on February 13, 2015 and amended on December 30, 2019 by the SAFE, local banks
will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration
and amendment registration, under SAFE Circular 37 from June 1, 2015.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
our shareholders or beneficial owners who are PRC residents or entities (as applicable) do not complete their registration with the local
SAFE branches, our PRC subsidiaries (in particular, the WFOEs) may be prohibited from distributing their profits and proceeds from any
reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to
our PRC subsidiaries (in particular, the WFOEs). Moreover, failure to comply with the SAFE registration described above could result
in liability under PRC laws for evasion of applicable foreign exchange restrictions. However, we may not at all times be fully aware
or informed of the identities of all our shareholders or beneficial owners that are required to make such registrations, and we cannot
compel our beneficial owners to comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders
or beneficial owners who are PRC residents or entities have complied with, and will in the future make or obtain any applicable registrations
or approvals required by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure
by us to amend the foreign exchange registrations of our PRC subsidiaries (in particular, the WFOEs), could subject us to fines or legal
sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries&#8217; ability to make distributions or
pay dividends or affect our ownership structure, which could adversely affect our business and prospects.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>PRC
regulation of direct investment and loans by offshore holding companies to PRC entities may delay or limit us to make additional capital
contributions or loans to our PRC subsidiaries.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are an offshore holding company conducting our operations in China through our PRC subsidiaries and the VIEs. We may make loans to our
PRC subsidiary and the VIEs or it may make additional capital contributions to our PRC subsidiaries.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Any
capital contributions or loans that we, as an offshore entity, make to our PRC subsidiaries (in particular, the WFOEs), are subject to
PRC regulations. For example, none of our loans to a PRC subsidiary (in particular, the WFOEs) can exceed the difference between our
total amount of investment and our registered capital approved under relevant PRC laws, or certain amount calculated based on elements
including capital or net assets and the cross-border financing leverage ratio and the loans must be registered with the local branch
of SAFE and the competent departments of State Development and Reform Commission in case of any external debts of more than one year.
Our capital contributions to our PRC subsidiaries (in particular, the WFOEs) must be approved by or filed with the MOFCOM, SAFE, or their
respective local counterpart.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 30, 2015, SAFE issued the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested
Enterprises, or SAFE Circular 19, which took effect on June 1, 2015 and was amended on December 30, 2019. Under SAFE Circular 19, a foreign-invested
enterprise, within the scope of business, may choose to convert its registered capital from foreign currency to RMB on a discretionary
basis, and the RMB capital so converted can be used for equity investments within PRC, provided that such usage shall fall into the scope
of business of the foreign-invested enterprise, which will be regarded as the reinvestment of foreign-invested enterprise.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies,
we cannot assure you that we will be able to complete the necessary registration or obtain the necessary approval on a timely basis,
or at all. If we fail to complete the necessary registration or obtain the necessary approval, our ability to make loans or equity contributions
to our PRC subsidiaries (in particular, the WFOEs) may be negatively affected, which could adversely affect the liquidity of our PRC
subsidiaries and their ability to fund their working capital and expansion projects and meet their obligations and commitments.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Governmental
control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency
out of China. We receive substantially all of our revenues in RMB. Under existing PRC foreign exchange regulations, payments of current
account items, including profit distributions, interest payments, and trade and service-related foreign exchange transactions, can be
made in foreign currencies without prior SAFE approval by complying with certain procedural requirements, but may be subject to internal
rules of related PRC subsidiary&#8217;s bank (in particular, the WFOEs&#8217; capital funds account open in bank), which is also under
the monitor of SAFE. Therefore, our PRC subsidiaries (in particular, the WFOEs) is able to pay dividends in foreign currencies to us
without prior approval from SAFE, but should still comply with bank&#8217;s related rules. However, approval from or registration with
appropriate government authorities (including formalities in the bank) is required where RMB is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange
control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to
pay dividends in foreign currencies to our shareholders.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Failure
to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject
the PRC plan participants or us to fines and other legal or administrative sanctions.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications
to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In the meantime,
our directors, executive officers, and other employees who are PRC citizens or who are non-PRC residents residing in PRC for a continuous
period of not less than one year, subject to limited exceptions, and who have been granted incentive share awards by us, may follow the
Circular on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas
Publicly-Listed Company, or the SAFE Circular 7, promulgated by the SAFE in 2012. Pursuant to the SAFE Circular 7, PRC citizens and non-PRC
citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas
publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could
be the PRC subsidiaries of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution
must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests.
We and our executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than
one year and who have been granted options will be subject to these regulations upon consummation of the Business Combination. Failure
to complete the SAFE registrations may subject them to fines and legal sanctions, and may also limit our ability to contribute additional
capital into our PRC subsidiaries and limit our PRC subsidiaries&#8217; ability to distribute dividends to us. We also face regulatory
uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers, and employees
under PRC law.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>A
slowdown of the Chinese economy or adverse changes in the economic and political policies of the PRC and the effects of COVID-19 government
could negatively impact China&#8217;s overall economic growth, which could materially adversely affect our business. </i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a holding company and substantially all of our operations are conducted in the PRC.&#160;Although the PRC economy has grown in recent&#160;years,
the pace of growth has slowed, and even that rate of growth may not continue. The annual rate of growth in the PRC declined from 6.9%
in 2015 to 6.7% in 2016, 6.8% in 2017 and 6.6% in 2018. The annual rate of growth further declined to 6.1% in 2019, the lowest since
1990. The annual rate of growth was 2.3% in 2020. Although the growth reached 8.1% in 2021, the growth rate of the first three quarters
of 2022 declined to 3.0%. A slowdown in overall economic growth, an economic downturn or recession, the effects of COVID-19 or other
adverse economic developments in the PRC may materially reduce the demand for the Group&#8217;s products and may have a material and
adverse effect on its business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">China&#8217;s
economy differs from the economies of most other countries in many respects, including the amount of government involvement in the economy,
the general level of economic development, growth rates and government control of foreign exchange and the allocation of resources. While
the PRC economy has grown significantly over the past few decades, this growth has remained uneven across different periods, regions
and economic sectors.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC government also exercises significant control over China&#8217;s economic growth by allocating resources, controlling the payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or
companies. Any actions and policies adopted by the PRC government could negatively impact the Chinese economy or the economy of the region
our serves, which could materially adversely affect our business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Substantial
uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations
could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of its operations
and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
business operations may be adversely affected by the current and future political environment in the PRC.&#160;The Chinese government
exerts substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in
China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government of
the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.
However, the government of the PRC may not continue to pursue these policies, or may significantly alter these policies from time to
time without notice. The Chinese economy differs from the economies of most developed countries in many respects, including the level
of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese
government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership
of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive
assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating
industry development by imposing industrial policies. The Chinese government also exercises significant control over China&#8217;s economic
growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing
preferential treatment to particular industries or companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to,
the laws and regulations governing our business, or the enforcement and performance of our arrangements with borrowers in the event of
the imposition of statutory liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate
a comprehensive system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate
organization and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of
the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not
sufficiently cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because
of the limited volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations
involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.
In addition, there have been constant changes and amendments of laws and regulations over the past 40&#160;years in order to keep up
with the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations
and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain
less developed areas causes uncertainty and may affect our business. Consequently, we cannot predict the future direction of Chinese
legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations
in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced
officials in the agencies and courts in certain areas, may cause possible problems to foreign investors.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Fluctuations
in the foreign currency exchange rate between U.S. Dollars and Renminbi could adversely affect our financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements
that we file with the SEC and provide to our shareholders are presented in U.S. Dollars. Changes in the exchange rate between the RMB
and dollar affect the value of our assets and the results of our operations in U.S. Dollars. The value of the RMB against the U.S. Dollar
and other currencies may fluctuate and is affected by, among other things, changes in the PRC&#8217;s political and economic conditions
and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely
affect our cash flows, revenue and financial condition. Further, our shares offered by this prospectus are offered in U.S. Dollars, and
we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate
between the U.S. Dollar and the RMB will affect that amount of proceeds we will have available for our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Future
inflation in China may inhibit economic activity and adversely affect our operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Chinese economy has experienced periods of rapid expansion in recent&#160;years which can lead to high rates of inflation or deflation.
This has caused the PRC government to, from time to time, enact various corrective measures designed to restrict the availability of
credit or regulate growth and contain inflation. High inflation may in the future cause the PRC government to once again impose controls
on credit and/or prices, or to take other action, which could inhibit economic activity in China. Any action on the part of the PRC government
that seeks to control credit and/or prices may adversely affect our business operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Relating to Our Class A Ordinary Shares.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>NASDAQ
may apply additional and more stringent criteria for our continued listing.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">NASDAQ
Listing Rule 5101 provides NASDAQ with broad discretionary authority over the continued listing of securities in NASDAQ and NASDAQ may
use such discretion to deny apply additional or more stringent criteria for the continued listing of particular securities, or suspend
or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of
the securities on NASDAQ inadvisable or unwarranted in the opinion of NASDAQ, even though the securities meet all enumerated criteria
for continued listing on NASDAQ. In addition, NASDAQ has used its discretion to deny continued listing or to apply additional and more
stringent criteria in the instances, including but not limited to where the company engaged an auditor that has not been subject to an
inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach,
or experience to adequately perform the company&#8217;s audit. For the aforementioned concerns, we may be subject to the additional and
more stringent criteria of NASDAQ for our continued listing.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are an &#8220;emerging growth company&#8221; and the reduced disclosure requirements applicable to emerging growth companies may make
our securities less attractive to investors.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are an &#8220;emerging growth company,&#8221; as defined in the JOBS Act. We may remain an &#8220;emerging growth company&#8221; until
the fiscal year ended February 8, 2024. However, if our non-convertible debt issued within a three-year period exceeds $1.0 billion or
an annual revenue exceeds $1.235 billion, or the market value of its Class A ordinary shares that are held by non-affiliates exceeds
$700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as
of the following fiscal year. As an emerging growth company, we are not required to comply with the auditor attestation requirements
of section 404 of the Sarbanes-Oxley Act, have reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay
the adoption of new or revised accounting standards that have different effective dates for public and private companies until those
standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company
effective dates. As a result, potential investors may be less likely to invest in our securities.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Heshine
will control the outcome of our shareholder actions.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
of April 18, 2023, Heshine holds 5,032,208 shares of Class A ordinary shares and 2,925,058 shares of Class B shares. Assuming none of
the outstanding warrants has been exercised, holds 51.22% of our aggregate voting power. Heshine&#8217;s voting power gives it the power
to control actions that require shareholder approval under British Virgin Islands law, our memorandum and articles of association and
Nasdaq requirements, including the election and removal of a majority of our board of directors, approval of significant mergers and
acquisitions and other business combinations, and changes to our memorandum and articles of association.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Heshine&#8217;s
control may cause transactions to occur that might not be beneficial to direct or indirect holders of our Class A ordinary shares and
may prevent transactions that would be beneficial to you. For example, Heshine&#8217;s voting control may prevent a transaction involving
a change of control of us, including transactions in which you as a holder of our Class A ordinary shares might otherwise receive a premium
for your securities over the then-current market price. In addition, Heshine is not prohibited from selling a controlling interest in
us to a third party and may do so without your approval and without providing for a purchase of your Class A ordinary shares. If Heshine
is acquired or otherwise undergoes a change of control, any acquirer or successor will be entitled to exercise the voting control and
contractual rights of Heshine, and may do so in a manner that could vary significantly from that of Heshine.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are a &#8220;controlled company&#8221; within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from
certain corporate governance requirements that provide protection to shareholders of other companies.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Assuming
none of the outstanding warrants has been exercised, we are a &#8220;controlled company&#8217;&#8217; as defined under the Nasdaq Stock
Market Rules because Heshine controls more than 50% of our voting rights. For so long as we remain a controlled company under that definition,
we are permitted to elect to rely, and will rely, on certain exemptions from corporate governance rules, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exemption from the rule
    that a majority of our board of directors must be independent directors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exemption from the rule
    that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exemption from the rule
    that our director nominees must be selected or recommended solely by independent directors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance
requirements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
dual-class share structure with different voting rights and conversion of certain ordinary shares will limit your ability to influence
corporate matters and could discourage others from pursuing any change of control transactions that holders of Class A ordinary shares
may view as beneficial.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a Foreign Private Issuer and we have adopted a dual-class share structure, which includes Class A ordinary shares with one vote per
share and Class B ordinary shares with ten votes per share. Currently Heshine holds 5,032,208 Class A ordinary shares and 2,925,058 Class
B ordinary shares, which accounts for 51.22 % voting power of all issued and outstanding ordinary shares. Consequently, Heshine has considerable
influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election
of directors and other significant corporate actions. Heshine may also take actions that are not in the best interest of the Company
or the Company&#8217;s other shareholders. In addition to limiting your ability to influence corporate matters, this concentration of
ownership may discourage, delay or prevent a change in control of the Company, which could have the effect of depriving the Company&#8217;s
other shareholders of the opportunity to receive a premium for their shares as part of a sale of the Company and may reduce the price
of our Class A ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Our
dual-class structure of ordinary shares may adversely affect the trading market for our Class A ordinary shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
2017, S&amp;P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies
on certain indices, including the S&amp;P 500, to exclude companies with multiple classes of shares and companies whose public shareholders
hold no more than 5% of total voting power from being added to such indices. In addition, several shareholder advisory firms have announced
their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the
inclusion of our ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate
governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a
less active trading market for our Class A ordinary shares. Any actions or publications by shareholder advisory firms critical of our
corporate governance practices or capital structure could also adversely affect the value of our Class A ordinary shares.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<b><i>Fluctuations
in exchange rates could have a material adverse effect on our results of operations and the value of your investment.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
value of the RMB against the U.S. dollar and other currencies is affected by changes in China&#8217;s political and economic conditions
and by China&#8217;s foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of
pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three
years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within
a narrow band. Since June 2010, the RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. On November
30, 2015, the Executive Board of the International Monetary Fund (IMF) completed the regular five-year review of the basket of currencies
that make up the Special Drawing Right, or the SDR, and decided that with effect from October 1, 2016, RMB is determined to be a freely
usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese yen and
the British pound. In the fourth quarter of 2016, the RMB has depreciated significantly in the backdrop of a surging U.S. dollar and
persistent capital outflows of China. With the development of the foreign exchange market and progress towards interest rate liberalization
and RMB internationalization, the PRC government may in the future announce further changes to the exchange rate system and we cannot
assure you that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult
to predict how market forces or PRC or U.S. government policies may impact the exchange rate between the RMB and the U.S. dollar in the
future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
remains significant international pressure on the Chinese government to adopt a flexible currency policy to allow the RMB to appreciate
against the U.S. dollar, especially under the current circumstance of the Sino-US trade conflicts. Significant revaluation of the RMB
may have a material adverse effect on your investment. Substantially all of our revenues and costs are denominated in RMB. Any significant
revaluation of RMB may materially and adversely affect our revenues, earnings, and financial position. To the extent that we need to
convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of the RMB against
the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion. Conversely, a significant depreciation
of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings or the US dollar amount available
to us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Very
limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into
any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging
transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge
our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict
our ability to convert RMB into foreign currency.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Certain
provisions of the Fourth Amended and Restated Memorandum and Articles of Association may be deemed to have an antitakeover effect.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Fourth Amended and Restated Memorandum and Articles of Association may have the effect of delaying, deferring or preventing or rendering
more difficult a change in control of the Company that a shareholder might consider in his or her best interest, including the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Poison Pill Defenses. Under
    the Companies Law of British Virgin Islands there are no provisions that specifically prevent the issuance of preferred shares or
    any such other &#8216;poison pill&#8217; measures. Our Fourth Amended and Restated Memorandum and Articles of Association also do
    not contain any express prohibitions on the issuance of any preferred shares. Therefore, the directors without the approval of the
    holders of Class A ordinary shares may issue preferred shares that have characteristics that may be deemed to be anti-takeover. Additionally,
    such a designation of shares may be used in connection with plans that are poison pill plans.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions
applicable to U.S. domestic public companies.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 30, 2020, we have made the determination that we qualify as a foreign private issuer under the Exchange Act and filed Form 8-K on
July 1, 2020 to announce our determination. Effective immediately after the filing of this Form 8-K, we began reporting under the Exchange
Act as a foreign private issuer. As a foreign private issuer, we are exempt from certain provisions of the securities rules and regulations
in the United States that are applicable to U.S. domestic issuers, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the rules under the Exchange
    Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the sections of the Exchange
    Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the sections of the Exchange
    Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit
    from trades made in a short period of time; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the selective disclosure
    rules by issuers of material nonpublic information under Regulation&#160;FD.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial
results and material events will also be furnished to the SEC on Form&#160;6-K. However, the information we are required to file with
or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a
U.S.&#160;domestic issuer.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may be subject to additional reporting requirements if we lose our status as a foreign private issuer.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
we lose our status as a foreign private issuer at some future time, then we will no longer be exempt from such rules and, among other
things, will be required to file periodic reports and financial statements as if we were a company incorporated in the United States.
The costs incurred in fulfilling these additional regulatory requirements could be substantial.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>As
a company incorporated in the British Virgin Islands, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from NASDAQ corporate governance listing standards; these practices may afford less protection
to shareholders than they would enjoy if we complied fully with NASDAQ corporate governance listing standards.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
a BVI company listed on NASDAQ, we are subject to NASDAQ corporate governance listing standards. However, NASDAQ rules permit a foreign
private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the
British Virgin Islands, which is our home country, may differ significantly from NASDAQ corporate governance listing standards. For example,
neither the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands nor our memorandum and articles of association
requires a majority of our directors to be independent and we could include non-independent directors as members of our compensation
committee and nominating committee, and our independent directors would not necessarily hold regularly scheduled meetings at which only
independent directors are present. To the extent we choose to follow home country practice in the future, our shareholders may be afforded
less protection than they otherwise would under NASDAQ corporate governance listing standards applicable to U.S.&#160;domestic issuers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>U.S.
holders of Class A ordinary shares may suffer adverse tax consequences if we were characterized as a passive foreign investment company.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Based
on the current composition of our gross income and assets and on reasonable assumptions and projections, we believe we should not be
treated as a passive foreign investment company (a &#8220;PFIC&#8221;), for U.S. federal income tax purposes for 2022. However, there
can be no assurance that this will be the case in 2022 or in future taxable years. If we were characterized as a PFIC, U.S. holders of
the Class A ordinary shares may suffer adverse tax consequences such as (i) having gains realized on the sale of the Class A ordinary
shares treated as ordinary income rather than capital gain, not qualifying for the preferential rate otherwise applicable to dividends
received in respect of the Class A ordinary shares by individuals who are U.S. holders, and (ii) having interest charges apply to certain
distributions by us and upon certain sales of the Class A ordinary shares.</span></p><div>

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</div><div><a id="b_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
4. INFORMATION ON THE COMPANY</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_013"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>History and Development
    of the Company</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
were originally a blank check company, known as Wealthbridge Acquisition Limited (&#8220;Wealthbridge&#8221;), incorporated in the British
Virgin Islands on May 2, 2018 with limited liability (meaning our public shareholders have no liability, as shareholders of the Company,
for the liabilities of the Company over and above the amount paid for their shares) to serve as a vehicle to effect a merger, share exchange,
asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more target businesses.
On May 7, 2020, we consummated the Business Combination contemplated by the Share Exchange Agreement with Lavacano and WBY, pursuant
to which we acquired 100% the issued and outstanding equity interests of Scienjoy Inc. and changed our name to Scienjoy Holding Corporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 16.2pt"><span style="font-family: Times New Roman, Times, Serif">Our
principal executive offices are located at RM 1118, 11th Floor, Building 3, No. 99 Wangzhou Rd., Liangzhu St, Yuhang District, Hangzhou,
Zhejiang Province, China, 311113. Our telephone number at this address is (86) 571 8858 6668. Our registered office in the British Virgin
Islands is located at Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands. Our agent for service of process in the United
States is Cogency Global Inc., located at 122 East 42<sup>nd</sup> Street, 18<sup>th</sup> Floor, New York. Our website is <i>http://www.scienjoy.com</i>.
The information on our websites should not be deemed to be part of this annual report. The SEC also maintains a website at <i>http://www.sec.gov
</i>that contains reports, proxy, and information statements, and other information regarding registration that make electronic fillings
with the SEC using the EDGAR system.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>History
of Scienjoy Inc.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Scienjoy
Inc. is a holding company incorporated under the laws of the Cayman Islands on February 23, 2017 with authorized shares of 500,000,000
shares at a par value of $0.0001.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Scienjoy
Inc., through its subsidiaries and variable interest entities, is principally engaged in operating its own live streaming platforms in
the People&#8217;s Republic of China (the &#8220;PRC&#8221;). In 2014, Scienjoy Inc.&#8217;s first live streaming APP Showself Live Streaming
was launched. Scienjoy Inc. subsequently launched &#8220;Lehai&#8221; in 2015 and &#8220;Haixiu&#8221; in 2016.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Reorganization
of Scienjoy Inc.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 1, 2018, Tongfang Investment Fund Series SPC (&#8220;TF&#8221;) completed the acquisition of a 65% equity interest in Sixiang
Times (Beijing) Technology Co., Ltd (&#8220;Sixiang Times&#8221;) from NQ Mobile Inc., Ltd. Through the acquisition of Sixiang Times,
TF acquired a controlling position in Holgus Sixiang Information Technology Co., Ltd (&#8220;Holgus X&#8221;), Kashgar Sixiang Times
Internet Technology Co., Ltd (&#8220;Kashgar Times&#8221;), Beijing Sixiang Shiguang Technology Co., Ltd. (&#8220;SG&#8221;), Hai Xiu
(Beijing) Technology Co., Ltd (&#8220;HX&#8221;) and Beijing Le Hai Technology Co., Ltd (&#8220;LH&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 18, 2017, Scienjoy Inc. established its wholly owned subsidiary in Hong Kong, Scienjoy International Limited (&#8220;Scienjoy HK&#8221;),
as a holding company holding all of the outstanding shares of Sixiang Wuxian (Beijing) Technology Co., Ltd (&#8220;WXBJ&#8221;) which
was established in PRC on October 17, 2017 under the laws of the People&#8217;s Republic of China as a holding company holding all of
the equity interest of Sixiang Zhihui (Beijing) Technology Co., Ltd. (&#8220;ZH&#8221;), which was incorporated on July 5,2018.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Scienjoy
Inc. established ZH (through WXBJ), as a holding company for purpose of holding all of the outstanding equity interest of Holgus X and
Kashgar Times, as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 18, 2018, Sixiang Times and ZH executed an equity transfer agreement with Sixiang Times. Pursuant to the agreement, 100% equity
interest in Holgus X was transferred to ZH.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 24, 2018, Sixiang Times and ZH executed an equity transfer agreement. Pursuant to the agreement, 100% equity interest in Kashgar
Times was transferred to ZH. In consideration of the transfer, Scienjoy Inc. paid RMB10,000,000 to the former shareholders of Kashgar
Times.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 16, 2018, Sixiang Times and other minority shareholders respectively entered into certain equity transfer agreements with Sixiang
Huizhi (Beijing) Technology Culture Co., Ltd. (&#8220;HZ&#8221;) and Tianjin Sihui Peiying Technology Co., Ltd. (&#8220;SY&#8221;), and
transferred 100% of the equity interest in SG to HZ, and transferred 100% of the equity interest in HX and LH to HZ and SY. Both HZ and
SY were ultimately controlled by TF.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 28, 2019, HZ and SY executed equity transfer agreement with Zhihui Qiyuan. Pursuant to the agreement, 100% of the equity interest
in SG, HX and LH was transferred to Zhihui Qiyuan, which is ultimately controlled by TF. In consideration of the transfer, Scienjoy Inc.
paid RMB 32,000,000 to HZ and SY.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 29, 2019, Scienjoy Inc., through WXBJ, entered into a series of contractual arrangements (&#8220;VIE Agreements&#8221;) with
Zhihui Qiyuan and its registered shareholders, and in substance obtained control over all equity shares, risks and rewards of SG, HX
and LH through Zhihui Qiyuan. For a description of the VIE agreements pursuant to which Scienjoy Inc. and its subsidiaries were established
as a primary beneficiary of Zhihui Qiyuan, see &#8220;Item 4. Information on the Company&#8212;C. Organizational Structure&#8212;Contracts
that give the Company effective control of the VIEs.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 10, 2020, SG consummated the acquisition of the 100% equity interest in Lixiaozhi (Chongqing) Internet Technology Co., Ltd. (&#8220;LXZ&#8221;)
from its original shareholder for a cash consideration of RMB200 (US$28). We believe the acquisition of LXZ helps to enrich our product
line, expand our user base and capitalize on the growth potential in the live streaming market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 7, 2020, the Business Combination was consummated. Following our Business Combination, we changed our name from &#8220;Wealthbridge
Acquisition Limited&#8221; to &#8220;Scienjoy Holding Corporation&#8221; and continued the listing of our Ordinary Shares on NASDAQ under
the symbol &#8220;SJ&#8221;. Our Public Warrants are traded on over the counter market under the symbol &#8220;SJOYW&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 23, 2020, we established Kashgar Sixiang Lehong Information Technology Co., Ltd. (&#8220;Kashgar Lehong&#8221;) through ZH. The
setting up of such company is for the purpose of analyzing the possibility of tax planning in such region.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 10, 2020, we signed an Equity Acquisition Framework Agreement (the &#8220;BeeLive Acquisition Agreement&#8221;) with Sciscape
International Limited, Tianjin Guangju Dingfei Technology Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co.,
Ltd.. Pursuant to the BeeLive Acquisition Agreement, we, through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International
Limited which holds the platform BeeLive International and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest
in Tianjin Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required
to pay (i) a cash consideration of RMB50.0 million and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class
A ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions and
requirements over the following three years. On August 21, 2020, all target shares were transferred to the parties designated in BeeLive
Acquisition Agreement. On September 10, 2020, we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology
Co., Ltd. and issued 3,786,719 Class A Ordinary Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently
changed its name to Sixiang Mifeng (Tianjin) Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.
BeeLive is a global live streaming platform that initially launched in China in November 2016. Since the second half of 2019, BeeLive
began expanding into international markets. To date, BeeLive International offers Arabic language live streaming product in the Middle
East and Thai language live streaming product in Southeast Asia.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
December 2020, we have set up two new subsidiary companies, Holgus Sixiang HaoHan Internet Technology Co.,Ltd. and Sixiang ZhiHui (HaiNan)
Technology Co,. Ltd., and in March 2021, QY has set up a new subsidiary named ZhiHui QiYuan (HaiNan) Investment Co., Ltd. for general
corporate purpose.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 2, 2021, QY established a wholly owned subsidiary Zhihui QiYuan(HaiNan) Investment Co,. Ltd (&#8220;QYHN&#8221;) in Hainan, PRC
to provide information technology service.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
September 2021, SG set up three subsidiaries, SH, SHWL and HYHF in an effort to enrich the product lines and expand the user base.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the &#8220;Framework Agreement&#8221;)
with Golden Shield Enterprises Limited (&#8220;Golden Shield&#8221;), Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;,
together with Golden Shield, the &#8220;Target Companies&#8221;, and each a &#8220;Target Company&#8221;), Tianjin Yieryi Technology
Co., Ltd. (&#8220;Yieryi&#8221;), Wolter Global Investment Limited (&#8220;Wolter Global&#8221;, together with Yieryi, the &#8220;Sellers&#8221;,
and each a &#8220;Seller&#8221;) and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) (&#8220;Weilaijin&#8221;),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the &#8220;Hongle Acquisition&#8221;).
Yieryi and Wolter Global are under common control. The transactions contemplated under the Framework Agreement have closed on January
1, 2022 (the &#8220;Closing&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Upon
the closing of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong
and Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the &#8220;Weilaijin Share Consideration&#8221;), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the &#8220;Wolter Global Share Consideration&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
January 2022, we have set up a new subsidiary company, Sixiang Zhihui (Zhejiang) Culture Technology Co., Ltd. (&#8220;ZHZJ&#8221;) for
general corporate purpose.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
January 2022, SG consummated the acquisition of the 100% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. (&#8220;CDZH&#8221;)
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. (&#8220;HYDC&#8221;) from its original shareholders for
a cash consideration of RMB100,000 (US$15,692). We believe the acquisition of CDZH and HYDC will help to enrich the product lines, expand
the user base and commercialize the growth potential in the live streaming market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 7, 2022, Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. <span>(&#8220;QYHZ&#8221;) and
its several wholly owned subsidiaries were set up in Zhejiang, PRC to provide information technology services.</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><span>&#160;</span></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; ">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 28, 2022, we have set up a new subsidiary company, Sixiang Wuxian (Zhejiang) Culture Technology Co., Ltd. (&#8220;WXZJ&#8221;)
for general corporate purpose.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 1, 2022, we <span>through our wholly-owned subsidiary, WXZJ, entered into a series of contractual
arrangements with Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. and its shareholders, thereby &#160;in substance obtained control
over all equity shares, risks and economic benefits of&#160; Xiuli (Zhejiang) Culture Technology Co., Ltd., Leku (Zhejiang) Culture Technology
Co., Ltd., Haifan (Zhejiang) Culture Technology Co., Ltd., Xiangfeng (Zhejiang) Culture Technology Co., Ltd. and Hongren (Zhejiang) Culture
Technology Co., Ltd. The Company will commence its operations in Hangzhou after effecting the agreements under VIE contractual arrangement.
</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 23, 2022, we changed our address of principal place of business to RM 1118, 11th Floor, Building 3, No. 99 Wangzhou Rd., Liangzhu
St., Yuhang District, Hangzhou, Zhejiang Province, 311113,&#160;China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; ">On
June 30, 2022, WXBJ&#160;incorporated a wholly owned subsidiary Sixiang Yingyue (Shanghai) Technology Co., Ltd. (&#8220;SXYY&#8221;),
in Shanghai, PRC to provide information technology service.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
July 2022, LXZ was deregistered for general corporate purpose.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 31, 2022, SHWL and SH were sold to certain third parties for a nominal consideration because SHWL and SH have not commenced
any operation since their incorporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Adoption
of Dual-class Structure and Authorization of Class A Preferred Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 8, 2021, at 10:00 a.m. local time in Beijing, China we held our 2021 annual general meeting of shareholders (the &#8220;AGM&#8221;)
at which the shareholders&#8217; resolutions approved: (i) the adoption of a dual-class share structure, pursuant to which the Company&#8217;s
authorized share capital shall be re-classified and re-designed into Class A ordinary shares and Class B ordinary shares, with each Class
A ordinary share being entitled to one (1) vote and each Class B ordinary share being entitled to ten (10) votes at a meeting of the
shareholders or on any resolution of shareholders; and (ii) the authorization to the Company to issue up to 50,000,000 Class A Preferred
Shares with such designations, powers, preferences and relative, participation, optional and other rights, if any, and such qualifications,
limitations and restrictions as the directors may determine among other matters.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Business Overview</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Mission</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are committed to establishing a mobile entertainment social community where users can enjoy interactive mobile live streaming and asynchronous
social connection.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Overview</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a leading provider of mobile live streaming platforms in China and focuses on interactive show live streaming from broadcasters to
users. We have 154,192 active show broadcasters for the year ended December 31, 2022. We had over 300 million registered users by the
end of December 31, 2022, increased from 267.0 million registered users for the year ended December 31, 2021. For the year ended December
31, 2022, the number of paying users was approximately 702,372, decreased 16.4% from 840,640 paying users in fiscal 2021. Before the
BeeLive Acquisition, we operated primarily on three platforms (Showself Live Streaming, Lehai Live Streaming and Haixiu Live Streaming).
Through the BeeLive Acquisition, we added two additional platforms (BeeLive Chinese (MiFeng) and BeeLive International) to our businesses.
Through the Hongle Acquisition, we added one additional platform (Hongle.tv) to our businesses. All our platforms are using our own mobile
applications, and have created a vibrant, interactive, and close community.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
operate a mobile live streaming business by which it provides live streaming entertainment from professional &#8220;broadcasters&#8221;
to the end-users, allowing for operation of live social video communities. Using our mobile applications, users can select broadcasters
and enter real time video rooms to interact with them. In addition to the real-time interaction, users can also view photos posted by
broadcasters in their personal pages, leave comments, and engage in private chats with broadcasters when such broadcasters are not streaming.
In addition, users can also play simple, fun games using virtual currencies within the video rooms while watching live streaming of a
broadcaster.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">While
users have free access to all real time video rooms, revenue is primarily generated through sales of our virtual currency. Users can
purchase virtual currency on our platforms and can use such virtual currency to buy virtual items for broadcasters to show their support.
We share revenues generated on the platforms with talents agencies, which in turn share revenues with broadcasters. Under the leadership
of our experienced management team, we continue to invest in technology advancement and industry collaboration to expand its user base
and improve its content. We are dedicated to achieving sustainable development and transforming the industry through its bold and creative
live streaming philosophy.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have achieved significant growth since our inception. The number of registered users of the Company&#8217;s platforms at year end has
increased from 170.7 million in 2018 to over 300 million in 2022. The platforms&#8217; annual ARPPU was RMB 1,963 and RMB2,725 for the
years ended December 31, 2021 and 2022, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Competitive Strengths</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
believe the following competitive strengths contribute to our success and differentiate us from our competitors:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Multi-Platform
Live Streaming</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Starting
in 2014 with the launch of the Showself Live Streaming platform, our user base has grown into one of the largest in China, and now we
are one of the leading show live streaming providers in China. We believe our show live streaming products satisfy users&#8217; psychological
needs and decrease users&#8217; stress, loneliness, depression, frustration etc. in the real life.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
user traffic and revenue spread across multiple products supported by multiple mobile applications. We believe this multi-product approach
increases our competitiveness by allowing us to target different sections of the population simultaneously more effectively, achieve
better traffic matching between users and broadcasters, extend the retention of broadcasters and users on our platforms, and benefit
from user traffic acquisition while mitigating risks of focusing on a single platform. We believe that our already established position
across multiple platforms provides us with the ability to compete effectively for users and a base from which we can expand, either into
additional show live streaming platforms or into other sections of the live streaming market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
a pioneer in the live streaming market, we developed our own set of end-to-end (broadcaster-to-user) mobile video solutions. Many of
the systems and technologies we have developed, including, among others, our mobile-compatible animation engine technology, event-driven
asynchronous business processing mechanism, linearly expanding deployment of its servers, modular service development and assembly, high-throughput
parallel messaging service clusters and spam filtering based on machine learning, provide us with competitive advantages. We believe
our existing systems and technologies, supported by its continuing efforts in technology innovation, including with regard to augmented
reality/virtual reality (&#8220;AR/VR&#8221;), artificial intelligence (&#8220;AI&#8221;), big data technology, machine learning and
physics engine technology, provide us with the necessary technical skills to compete and expand in this rapidly changing industry.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Innovative
Product Features and Operating Philosophy</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
product offerings include numerous innovative features designed to improve user experience, increase user-stickiness, and enhance its
monetization ability. These include, among others:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">gamified product and operating
    philosophy that enable users to enjoy the exciting alternative life in the mobile live streaming virtual world. In this virtual world,
    users can enjoy the real interactive activities with broadcasters and also build their virtual life.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a range of online games
    for users to play while watching streaming. These include simple, fun games like pet run, crazy racing and gold egg smashing. Users
    pay virtual currency to play games for a chance to hit a virtual currency jackpot or win virtual goods that they can then send to
    broadcasters who can then monetize the goods. These games enhance user engagement during live streaming and encourage and facilitate
    the use of virtual currency and virtual goods.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">both real-time streaming
    and asynchronous social functions. Users of our platforms can communicate with broadcasters and other users not only when broadcasters
    are streaming, but also afterwards through sending private texts and photos, and commenting on photos posted on the personal pages
    of specific broadcasters. This allows users to interact with broadcasters and their communities any time they wish.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Strong
Data Analytics Capabilities</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
ability to understand market traffic and pair users with suitable broadcasters and activities is key to driving user stickiness and monetization
in the mobile live streaming industry. We are able to use analytics-driven operational capabilities to understand individual user behavior
and larger industry trends. This allows us to better guide individual users to appropriate broadcasters, adjust the platform interface
to guide user traffic throughout the broadcasters while maintaining user experience, and analyze traffic on other sites such as network
alliances to select the best methods and targets for traffic acquisition. Our data insights and strong technological capabilities enable
us to innovate and optimize products on an ongoing basis and allow us to precisely operate Our platforms based on large quantities of
statistics collected and analyzed.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Experienced
Management Team and Professional Staff with Strong Operational Capabilities</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
senior management team has extensive experience working with the mobile Internet, in related computer-technology industries, big data
analysis, and cutting-edge technologies. Members of our senior management team have experience of over 20 years in various segments of
the technology, business operation, and Internet industries. Under the leadership of its senior management members, we have successfully
identified trends in mobile streaming and timely seized opportunities for growth and innovation.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
management team has extensive experience and skill in research and development, quality control, and Internet infrastructure and operations.
We believe that as mobile streaming matures, strong operational and execution capabilities will become increasingly important to remaining
competitive and our strong team with years of relevant experience will provide us with a competitive advantage.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Strategies</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
business objective is to further strengthen our position in the mobile show live streaming industry and to leverage our existing position
to expand its business into other related industries in China and oversea markets. Looking forward, we will seek to make use of &#8220;live+&#8221;,
explore entertainment online-merge-offline (OMO) models, integrate resources across the industry value chain, and build an ecosystem
of mobile live streaming, all to meet the diverse needs of users. We intend to implement the following strategies:</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Provide
More Engaging and Professional Content</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
will keep introducing more engaging content to retain users and further boost users&#8217; willingness to purchase virtual goods. Although
most broadcasters working in the live streaming industry provide various entertainments for users, the content provided is generally
not as professional as traditional performers. Therefore, there is still an opportunity for us to cooperate with more traditional artists
and to train our broadcasters to produce a more professional product.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Further
Expand Our Mobile Live Streaming Business in China and Overseas</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
intend to update our mobile applications to allow for easier content creation and sharing by our users. We believe that the convenience
offered will continue to improve user stickiness and develop into a destination for social interactions. Meanwhile, our multiple platforms
can serve a broad range of potential end markets. We plan to integrate our registered user accounts across multiple mobile applications
into a unified account system. We believe this will lead to a virtuous cycle: the resulting higher user engagement level would provide
us with more opportunities to cross-promote its products and gather incremental user data for further product optimization and development.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have plans to expand our business globally. We have obtained considerable experience in mobile live streaming industry and plans to promote
its mobile live streaming platform in Southeast Asia, Middle East and South America. On August 10, 2020, we signed an Equity Acquisition
Framework Agreement (the &#8220;BeeLive Acquisition Agreement&#8221;) with Sciscape International Limited, Tianjin Guangju Dingfei Technology
Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co., Ltd.. Pursuant to the BeeLive Acquisition Agreement, we,
through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International Limited which holds the platform BeeLive International
and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest in Tianjin Guangju Dingfei Technology Co., Ltd. which
holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required to pay (i) a cash consideration of RMB50.0 million
and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class A ordinary shares) to be issued by the Company.
30% of share consideration payments are subject to certain performance conditions and requirements over the following three years. On
August 21, 2020, all target shares were transferred to the parties designated in BeeLive Acquisition Agreement. On September 10, 2020,
we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology Co., Ltd. and issued 3,786,719 Class A Ordinary
Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently changed its name to Sixiang Mifeng (Tianjin)
Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.&#160;BeeLive is a global live streaming
platform that initially launched in China in November 2016. Since the second half of 2019, BeeLive began expanding into international
markets. To date, BeeLive International offers Arabic language live streaming product in the Middle East and Thai language live streaming
product in Southeast Asia.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the &#8220;Framework Agreement&#8221;)
with Golden Shield Enterprises Limited (&#8220;Golden Shield&#8221;), Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;,
together with Golden Shield, the &#8220;Target Companies&#8221;, and each a &#8220;Target Company&#8221;), Tianjin Yieryi Technology
Co., Ltd. (&#8220;Yieryi&#8221;), Wolter Global Investment Limited (&#8220;Wolter Global&#8221;, together with Yieryi, the &#8220;Sellers&#8221;,
and each a &#8220;Seller&#8221;) and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) (&#8220;Weilaijin&#8221;),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the &#8220;Hongle Acquisition&#8221;).
Yieryi and Wolter Global are under common control. The transactions contemplated under the Framework Agreement have closed on January
1, 2022 (the &#8220;Closing&#8221;).</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Upon
the closing of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong
and Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the &#8220;Weilaijin Share Consideration&#8221;), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the &#8220;Wolter Global Share Consideration&#8221;).</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Hongle.tv
is a similar mobile apps to our existing four platforms, &#8220;Showself&#8221; (&#31168;&#33394;&#30452;&#25773;), &#8220;Lehai&#8221;(&#20048;&#21992;),
&#8220;Haixiu&#8221; (&#21992;&#31168;), and BeeLive Chinese (&#8220;MiFeng&#8221; &#34588;&#30127;&#30452;&#25773;). Such platforms
are launched in China in Chinese language. The only differences as compared to the four said platforms are that 1) The said four platform
are viewed on the mobile apps with broadcasters occupying half of the screen at the top while comments and social chat at the bottom
while in Hongle.tv, broadcasters occupying the full page of the screen; 2) The said four platforms are targeted at general public while
Hongle.tv is focused on younger generations especially university students.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Diversify
the Live Streaming Business</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">After
years of development in the field of live video broadcasting, we have rich experience in technology, research and development, product
promotion, and other aspects of live streaming platforms operations. Since its formation, we have focused on operating show live streaming
platforms. Going forward, in addition to continuing to establish its position in this segment, we plan to leverage its relevant expertise
to expand its business into undeveloped areas based on its current user base, broadcasters, and partners.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">First,
we would like to develop our advertising business model by providing the market with comprehensive advertising proposals, combining traditional
banners and video commercials with operative events and virtual items. We plan to acquire new media advertising companies or teams to
promote our advertising business which focuses on brands suitable for our user profiles.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Secondly,
we would like to provide value-added services for our broadcasters and users. Since the inception of our business, we have partnered
with approximately 300,000 broadcasters. Many of these broadcasters desire to improve their physical looks. We find it a good business
opportunity to provide a fee-based platform which will refer broadcasters to appropriate appearance enhancement hospitals. In addition,
since we have a large number of users who live in lower tier cities and have demands in various professional area, such as investment,
high-end tourism, children&#8217;s international education and healthcare. We can build a sustainable referral business for our users
as well.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Thirdly,
we would like to build up our ecommerce business, which will be combined with our existing live streaming business. In this new business
model, our broadcasters may introduce to their viewers the products sold on our platforms. We possess comprehensive live streaming technologies,
including artificial intelligence and big data, and believe we have technical capacity and expertise to combine ecommerce business with
our live streaming business. To achieve this we have plans to strategically partner with suitable ecommerce platforms and jointly build
up our ecommerce business based on our current technologies, broadcasters&#8217; network and users base.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Explore
Technology Services Business</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
income has historically come from sales of virtual currency to users. Almost 100% of our total revenue has derived from the sale of virtual
items and virtual currency with respect to its live streaming business. Going forward, we plan to leverage our expertise and user base
to expand its revenue sources. In particular, we have plans to enter into cooperative arrangements with smaller live-streaming team,
through which we will provide such platforms with technology, operation and maintenance and promotional support services in return of
revenue sharing.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Continue
to Invest in and Develop Technologies Such as Virtual Reality (VR)/Augmented Reality (AR) and Artificial Intelligence (AI)</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
intend to continue to invest in our data analytics capabilities and cutting-edge technologies. We also plan to further develop our technology
stacks, including, but not limited to, machine learning, physics engine, AR/VR, and AI technologies to better understand and anticipate
user behavioral trends, which in turn can be applied to the development of our applications.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Tap
into the Next Phase of Explosive Industry Potential through M&amp;A</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Mergers
&amp; Acquisitions will be one of crucial strategies to expand our business swiftly, which support rapid execution of each element
of our business growth. The targeted sectors include related high-tech companies, data analysis companies, live streaming companies
(especially oversea targets), new media advertising companies, and beauty industry related companies. We have consummated the
BeeLive Acquisition in 2020 and the Hongle Acquisition recently.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Platforms</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
operate our live streaming communities through multiple platforms, each with our own mobile applications. After the recent successful
acquisition of Beelive, we currently operate primarily six platforms: Showself Live Streaming, Lehai Live Streaming, Haixiu Live Streaming,
BeeLive Live Streaming Chinese (MiFeng), BeeLive International, and Hongle Live Streaming. These platforms together make us the leading
provider of mobile show live streaming.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Showself
Live Streaming</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Showself
Live Streaming is our first live streaming platform and remains the most popular of our platforms in terms of registered users and revenue.
The platform was first launched in April 2014. Showself Live Streaming is widely accessible to most mobile internet users in China because
our live streaming-enabled features only require minimal bandwidth. The following is the typical screenshot for the mobile application
of Showself Live Streaming.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_001.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 61; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->52<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Lehai
Live Streaming</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Lehai
Live Streaming was launched in July 2015 and adheres to the concept of &#8220;having fun together.&#8221; The following is the typical
screenshot for the mobile application of Lehai Live Streaming (the iOS version may vary).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_002.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 62; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->53<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Haixiu
Live Streaming</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Haixiu
Live Streaming was launched in April 2016 and is our third platform. The following is the typical screenshot for the mobile application
of Haixiu Live Streaming (the iOS version may vary).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_003.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 63; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->54<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>BeeLive
Chinese (MiFeng)</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">BeeLive
Chinese (MiFeng) was launched in mainland China in November 2016. The following is the typical screenshot for the mobile application
of BeeLive Chinese (MiFeng) (iOS version may vary).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_004.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 64; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->55<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>BeeLive
International</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">BeeLive
International was launched in second half of 2019. It provides Arabic language service covering the Middle East and Thai language service
covering Southeast Asia and Middle East. The following are two typical screenshots for the mobile application of BeeLive International
in Arabic and Thai, respectively (iOS version may vary).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_005.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 65; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->56<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_006.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 66; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->57<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>Hongle
Live Streaming</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Hongle
Live Streaming was launched in mainland China in 2016. The company acquired such platform in January 2022. The following is the typical
screenshot for the mobile application of Hongle Live Streaming (Hongle). (iOS version may vary).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img alt="" src="image_007.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 67; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->58<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Key
Differences among the Platforms</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">All
six platforms are categorized as &#8220;show live streaming&#8221; in which professional broadcasters provide live streaming entertainment
for users primarily in the form of performances (singing, dancing, talk shows, etc.). Broadcasters on all six platforms have been trained
by broadcaster agents to provide content more professional than that of average amateur broadcasters. Due to different broadcasters,
user and geographical bases, the six platforms differ in their operation strategies, including the followings:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Showself is our largest
    platform. Because of the large number of broadcasters and users base, Showself has capacity to organize different talent shows and
    events, such as singing, poem writing and traditional Chinese opera.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As compared to Showself,
    Lehai and Haixiu have less users who are likely to spend money on live streaming shows. As such, in addition to live streaming shows,
    Lehai and Haixiu offers more free games or games that do not require much spending.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">BeeLive Chinese (MiFeng),
    compare to other Chinese platforms, focus more on the need of social communications of our users, therefore people tend to use them
    more often as a tool of communication with friends and peers.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On BeeLive International,
    more users choose to become broadcasters where they can perform talent show themselves in front of other users and in turn receive
    revenue sharing fee from them. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hongle Live Streaming,
    in comparison with our other domestic platforms, more focuses on enabling ordinary people to broadcast timely with their mobile phones.
    As a result, comparably, it has a broader mobile broadcaster base and its broadcasters tend to be much younger.&#160;&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Layout
and functions of the mobile application of our Platforms</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
layout and functions of the mobile applications of our platforms are substantially the same. The above screenshots and descriptions illustrate
the layout and some of the basic functions of the Showself Live Streaming application:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Square.
        </i></b>This page serves as a menu for currently streaming broadcasters. Users can search this page for broadcasters they want
        to watch. For users who do not already know any broadcasters or have no existing preference as to which broadcasters they want
        to watch, several groupings of broadcasters who are conducting ongoing live streaming are presented in the square under different
        headings to help viewers find a broadcaster they will enjoy. These groupings are organized under different labels, such as recommended
        broadcasters (based on comprehensive analysis and mining of user-specific data such as user&#8217;s location, login time, retention,
        daily activity, and consumer behavior), broadcasters located in the same city as the users, broadcasters currently followed by
        the user, broadcasters recently viewed by the user, and broadcaster &#8220;PK&#8221; (broadcasters currently competing against
        each other in terms of value of gifts received within ten minutes), and other labels.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Broadcasters&#8217;
    names, number of current online viewers, and grade based on the value of gifts received by such broadcaster along with a snapshot
    of the current stream are provided on the pages for viewers&#8217; use in selecting a broadcaster. These pages are updated with a
    new batch of broadcasters with every refresh by users, presenting them with a wider range of broadcasters to choose from. For new
    users, this interface provides them with an easy way to start exploring the platform. For existing users, broadcasters with closest
    relationship in terms of chat frequency and value of gifts sent are always presented in the first page of the square if the broadcaster
    is online and this makes it easier for users to closely watch live streaming of broadcasters they have followed. In all cases, clicking
    on a broadcaster&#8217;s picture will take users to a real time video room from which they can view and interact with the broadcaster.</span></p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 68; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->59<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Ranking Lists. </i></b>This
    page presents lists of top broadcasters by various criteria, including highest value of gifts received by the broadcasters (on a
    daily, weekly, monthly and all-time basis) and greatest number of virtual flowers or the specially designated weekly &#8220;star
    gifts.&#8221; Received by broadcasters. These ranking lists provide further information to viewers about broadcasters&#8217; popularity
    to help them identify top broadcasters and can also motivate users to support their favorite broadcasters on the list. This also
    promotes positive competition between broadcasters. The page also contains lists of viewers (by account name) that have spent the
    highest amount of virtual currency in the last day, week, month and all-time.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Guardian Teams. </i></b>Guardian
    teams are small groups of users organized by users with sufficient high user grades and which other users can join. This function
    allows small groups of like-minded users to interact online, form friendships, and support their favorite broadcasters as a group.
    This encourages user engagement and active participation. This also helps to improve user experience and enhance users&#8217; paying
    willingness. The guardian team page shows rankings of guardian teams by various criteria, including highest value of virtual currencies
    spent by guardian teams (on a daily and all-time basis) and the value of gifts received by the broadcasters from top guardian teams
    (on a weekly and bi-weekly basis).</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Discovery. </i></b>This
    page allows users to follow photos posted by broadcasters and activities organized by the platform. It is also the page through which
    users can purchase virtual items using &#8220;Xiu Bi,&#8221; the virtual currency used on the platform.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Me. </i></b>Users
    can check and manage their personal accounts through this page. Personal account information displayed mainly includes the broadcasters
    by such users, current virtual currency balance, virtual items purchased, guardian teams to which the users belong and intimate broadcasters
    list.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Content
on Our Platforms</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have a number of live broadcasting platforms. They provide entertainment content for users and have actively explored new entertainment,
new agency, and other fields in the upstream and downstream industry, combining entertainment, agents, and mobile Internet to create
online entertainment online-merge-offline (&#8220;OMO&#8221;). For the agents, the platforms provide support for product activities,
brand building, management empowerment, data support, and technical tools, and help it clarify its development path and strategy from
the perspective of industry analysis. For the broadcasters, the platforms have provided training through agents for items such as stage
decoration, lighting, music, attire, makeup, costumes, talent skills (such as singing, dancing, talk show and musical instruments), communication
skills, and service awareness. The platforms, agents, and broadcasters rely on each other and bridge the path for each other to build
a healthy and stable entertainment ecology.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">For
us, the establishment of a content security system is not only a means of defense but also a strong strategic offense. Through AI technology,
image recognition, big data analysis, combination of artificial audit, the platforms have a vertical monitoring system to monitor all
live streaming content 24/7 to ensure that the content is legal and in compliance, and is providing the best service to every user at
the same time, creating a refreshing and delightful user experience to increase its revenue.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Quality
and engaging content is the core of our development. One way for us to offer engaging content is to organize a variety of original shows
on our platforms, such as &#8220;Singer Alliance,&#8221; &#8220;Run Ms. Cang Run&#8221; and &#8220;King of Brain PK.&#8221; Secondly,
our platforms make efforts to support talented broadcasters by organizing special shows for these broadcasters such as &#8220;Crown of
Weekly Star&#8221; and &#8220;The Showself Voice.&#8221; Thirdly, our platforms continue to expand their shows to new areas such as traditional
opera and intangible cultural heritages. These shows include the live streaming series of &#8220;Revisiting the Intangible Cultural Heritage,&#8221;
&#8220;Beauty of Quintessential Chinese Culture,&#8221; and &#8220;I Write a Love Poem for My Hometown.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Users</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have an active and well-structured user base. In 2014, we transformed ourselves from a social network platform to a show live streaming
platform. Since then, we have experienced increased broadcasting competition and refined our operations. We have also accumulated a diversified
user group through constant innovation and promotion. Throughout December 31, 2021 up to December 31, 2022, the number of registered
users on our platforms have reached over 300 million.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
do not limit ourselves to acquiring users solely through self-growth fission or third-party marketing. Instead, we adopt the model of
win-win game to achieve stable and mutually beneficial expansion of our user base. In 2022, the number of paying users for our platforms
was 702,372 and their average revenue per paid user (ARPPU) for fiscal 2022 was RMB2,725.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">To
mitigate any concentration risks from a single user group structure, we have been working on to develop a diversified base of user groups,
which include young active users with short interest span as well as users in their thirties with high spending power. In addition, a
considerable number of our users are located in economically developed areas with more leisure life styles. These users have relatively
high disposable income and more leisure time. They tend to appreciate online entertainment more and are willing to spend money on online
entertainment.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Broadcasters</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
supply of talented and popular broadcasters is essential to us, particularly given our focus on developing professionally generated content.
Broadcasters serve as the primary interface with users and, therefore, the success of our platforms depend largely on the talent and
popularity of the broadcasters.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Engagement
of Broadcasters</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
primarily cooperate with online and offline broadcaster agents, or the talent agents, to recruit and manage broadcasters on an ongoing
basis. Each of the platforms also has an online application process for registered users to become broadcasters and we will select certain
applicants and refer them to the appropriate talent agents. As such, we enter into all contracts with the talent agents, as opposed to
with each broadcaster on an individual basis.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Before
broadcasting on the platform, all broadcasters must agree to the terms and conditions of our platforms, which includes the rules of the
platforms that the broadcasters must abide by while live streaming and also the legal consequences for violation of the rules. If any
such violations occur, we will hold the broadcasters directly liable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">For
selected broadcasters we identify as popular or having great potential or offering high-quality content, in addition to the above two
agreements, we will separately enter into an exclusivity agreement with each such broadcasters, which requires that the broadcasters
can only live stream on our platforms exclusively for a certain period of time. In return, we provide more resources and support to such
broadcasters by recommending their contents to potential interested users, increasing user traffic, and improving their popularity. We
will be entitled to sizeable liquidated damages if the broadcasters breach the exclusivity agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Cooperation
with the Talent Agencies</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Talent
agencies recruit broadcasters and provide live streaming content to us. We share revenue with the talent agencies, who pay salaries to
or share fees with their broadcasters. Talent agencies are also responsible for educating and training the broadcasters on live streaming
skills and techniques, such as dress codes, room settings and communication skills. As a result, talent agencies help broadcasters to
better present their live streaming content. The use of talent agencies also frees us from direct dealings with the broadcasters.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Monitoring
and Management of Broadcasters</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
set out rules with which broadcasters must comply with while using our platforms, including compliance with laws and regulations of the
PRC, no performances involving guns, knives or threats to lives, no infringement of legal rights of others and no pornography.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have the right to monitor and manage the performances of any broadcasters on our platforms. Appropriate measures are taken with respect
to any broadcasters that fail to comply with the above mentioned rules. Such measures range from warnings and fines to temporary or permanent
suspension from our platforms, and can be taken unilaterally by us as we deem fit. Since broadcasters are represented by agents, notice
of any illegal behavior or violations of platform rules will also be made to the relevant agent. The relevant agent is required to correct
any such violation upon receipt of the notification. If the violation is not corrected during the applicable grace period, we have the
right to terminate our cooperation with the relevant agent.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Marketing</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
marketing and promotional strategy includes, among others, the use of third-party marketing channels to both promote our platforms and
acquire users. These marketing channels primarily include advertising agencies which provide us with market visibility and numerous opportunities
to attract new users. We typically enter into one-year framework agreements with such advertising agencies which require us to purchase
a minimum aggregate amount of advertising during the terms of the agreements. The advertisements are either display-based or performance-based,
and are priced primarily based on cost-per-download, cost-per-time, cost-per-activation or cost-per-click. We are generally able to monitor
the performance and effectiveness of the advertisements directly or through the advertising agencies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
use mobile application platforms, such as the Apple App Store and Android App Download Centers, to dispense and showcases our mobile
platforms to a wide audience as well as to advertise the positive customer feedback which our platforms have received. Users can download
the apps from these application platforms for free. Users are also able to review and rate our applications through these platforms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Quality
Control and Content Monitoring</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have programmers with extensive application testing experience who systematically test our platforms to ensure that they conform to our
standards. We are also required under PRC laws and regulations, such as the Administrative Provisions on Mobile Internet Applications
Information Services, to monitor content on our platforms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have developed a comprehensive technology to screen content on our applications against a filter list, item by item. The filter list
compiles content and behaviors that we have determined, taking into account relevant PRC laws and regulations, to be likely to be indicative
of inappropriate, politically-sensitive, provocative or inflammatory language, sexually-suggestive language and body movements, full
or partial nudity or illegal content or activities, abusive language or actions towards other users, spam, scams, or acts and threats
of violence. Content identified as falling into the filter list would be blocked or removed from our platforms. In addition, we regularly
review any complaints alleging the inappropriate nature of content on our platforms and remove such content promptly.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Broadcasters
are also responsible for monitoring the content in their rooms and ensuring that their rooms comply with applicable laws and regulations
and terms of our service. Broadcasters can block users who transmit inappropriate information from posting comments in their rooms or
exclude users from their rooms. Broadcasters also have the ability to promote certain users to act as moderators to help manage rooms
in this way. We also monitor and take measures to deal with any infringements of our content policies by broadcasters.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Payment</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Users
are able to purchase virtual items we sell on our platforms by using virtual currency. Generally, users purchase virtual currency from
third-party distributors with which we have entered agreements. Users are also able to purchase virtual currency directly from our platforms
using various payment channels such as Alipay and WeChat Pay. Once users have purchased such virtual currency, they are able to purchase
virtual items. Once purchased, such virtual currency or virtual items cannot be returned in exchange for cash and we do not provide users
with a right of refund of any kind.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Technology</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
possess technological infrastructure and capacity that supports increasing operational efficiency, enabling innovations, and outperforming
our competitors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>AI And Big Data Analysis</i></b>:
    by using data and AI technology, we analyze user behavioral data. Through the results of such data analysis, we can better understand
    users&#8217; needs and know how to better match content with users. These operations help us improve our user experience as well
    as paying ratio and ARPPU.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Live Streaming Technology</i></b>:
    We have a complete peer to peer (the host starts to stream video for the user to play) live mobile video solution with independent
    intellectual property rights, and it is being constantly optimized. On the user end, we have made special optimization for video
    streaming playback processing in combination with CDN service providers, which supports fast video download and opening, reasonable
    buffering to reduce the Caton rate, so as to ensure a smooth experience for users.</span></td></tr>
  </table><div>
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  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Video Monitoring
    Technology</i></b>: this specially developed monitoring program can carry out real-time video monitoring for all video streams in
    combination with AI technology, and create a three-dimensional content monitoring system in combination with 24-hour continuous manual
    audit to discover potential violations and block applicable content.</span></td></tr>
  </table><div>
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  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Server and Infrastructure</i></b>:
    by using the situation awareness security service provided by Alibaba cloud and combined with the self-built monitoring platform,
    we can alert the system of abnormal phenomena and prevent virus and hacker intrusion.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Intellectual
Property</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
regard our software copyrights, domain names, trademarks and other intellectual property as critical to our success. As of April 18,
2023, we have registered 242 copyrights in China, 19 domain names, 10 patents for live streaming technology, and 104 trademarks including
the Showself, Haixiu, and Lehai logos.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
rely on trademark and copyright law, trade secret protection, non-competition and confidentiality and/or license agreements with our
employees, customers, partners and others to protect our intellectual property rights. In general, our employees must enter into a standard
intellectual property and confidential agreement which acknowledges that (1) all inventions, trade secrets, developments and other processes
generated by employees on our behalf are our property, and such employees are assigning to us any ownership rights they may claim in
those work; and (2) such employees undertake to keep confidential all information related to our methods, business and trade secrets
during and for a reasonable time after their employment with us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Competition</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
focus on show live stream model and in this area we face significant competition from providers of similar online streaming services.
Our competitors in the mobile live streaming market in China include other providers of show live streaming products, such as Hello Group
and JOYY, as well as other pan-entertainment streaming platforms such as Inke, Huafang, and gaming streaming DOYU and HUYA. We compete
to promote our products and gain users, to attract and hire management personnel with operational experience, and to secure diversified
marketing channels.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Legal
Proceedings</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
March 2022, Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;), one of our PRC subsidiaries was sued in a litigation
brought by certain individual (&#8220;WLT Litigation&#8221;) in Wuyuan County People&#8217;s Court, Inner Mongolia Autonomous Region,
China. In the WLT Litigation, Weiliantong was named as a joint defendant together with a broadcaster of the Hongle.tv live streaming
platform, which was operated by Weiliantong. In this case, one of the reliefs demanded by the plaintiff was a refund in the amount of
RMB2,113,879 and accrued interest to the plaintiff. On November 25, 2022, in the judgment made by the first instance trial court, the
court ruled in favor of the plaintiff and determined that Weiliantong should refund such amount of RMB2,113,879 and accrued interest
to the plaintiff. Weiliantong subsequently appealed on December 9, 2022 in Bayannur City Intermediate People&#8217;s Court, Inner Mongolia
Autonomous Region, China. Currently, this case is still in the process of the second instance trial.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Except
for above mentioned WLT Litigation, we are currently not a party to any material legal or administrative proceedings. We have been and
may become a party to a various legal or administrative proceedings arising in the ordinary course of our business, including matters
relating to contractual disputes. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to
result in substantial cost and diversion of our resources, including our management&#8217;s time and attention. See &#8220;Item 3. Key
Information&#8212;D. Risk Factors&#8212;Risk Factors Relating to Our Business and Industry&#8212;We may be held liable for information
or content displayed on, retrieved from or linked to our platforms, or distributed to our users if such content is deemed to violate
any PRC laws or regulations, and PRC authorities may impose legal sanctions on us,&#8221; and &#8220;Item 3. Key Information&#8212;D.
Risk Factors&#8212;Risk Factors Relating to Our Business and Industry&#8212;We may be subject to intellectual property infringement claims
or other allegations by third parties for information or content displayed on, retrieved from or linked to our platforms, or distributed
to our users, or for proprietary information appropriated by former employees, which may materially and adversely affect our business,
financial condition and prospects.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>REGULATIONS
IN PRC</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>This
section summarizes the principal current PRC laws and regulations relevant to our business and operations</i>.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
the live streaming industry is still at an early stage of development in China, new laws and regulations may be promulgated from time
to time to introduce new regulatory requirements, including but not limited to, requirements of obtaining new licenses and permits in
addition to those we currently have. There are substantial uncertainties with respect to the interpretation and implementation of current
and future PRC laws and regulations, including those applicable to live streaming industries and our business. This section sets forth
a summary of the most significant laws and regulations that are applicable to our current business activities in China and that affect
the dividends payment to our shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Telecommunications Services</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
September 2000, the State Council issued the Regulations on Telecommunications of China, or the Telecommunications Regulations, as amended
on July 29, 2014 and February 6, 2016, to regulate telecommunications activities in China. The Telecommunications Regulations set out
basic guidelines on different types of telecommunications business activities in China. According to the Catalog of Telecommunications
Business (2015 Amendment) implemented on March 1, 2016 (as amended on June 6, 2019), Internet information services constitute a type
of value-added telecommunications service. The Telecommunications Regulations require operators of value-added telecommunications services
to obtain value-added telecommunications business operation licenses from Ministry of Industry and Information Technology (the &#8220;MIIT&#8221;),
or its provincial branches prior to the commencement of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Regulations for the Administration of Foreign-Invested Telecommunications Enterprises, or the FITE Regulations, which took effect on
January 1, 2002 and were amended on September 10, 2008 and February 6, 2016, regulate foreign direct investment in telecommunications
companies in China. The FITE Regulations stipulate that foreign investors are generally prohibited from holding ultimately more than
50% of equity interest in a foreign-invested enterprise that provides value-added telecommunications services, including, among others,
provisions of Internet content. In addition, foreign investors are required to have sufficient experience operating value-added telecommunications
business when applying for the MIIT&#8217;s value-added telecommunications business operation license.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 13, 2006, the Ministry of Information Industry (which is the predecessor of MIIT) issued the Circular on Strengthening the Administration
of Foreign Investment in Value-added Telecommunications Services, or the MIIT Circular 2006, which provides that (a) foreign investors
can only operate a telecommunications business in China through telecommunications enterprises with a valid telecommunications business
operation license; (b) domestic license holders may not rent, transfer or sell telecommunications business operation licenses to foreign
investors in any form or provide any foreign investors with resources, venues or facilities to promote unlicensed operations of telecommunications
businesses in China; (c) value-added telecommunications service providers or their shareholders must directly own the domain names and
registered trademarks that are used in their daily operations; (d) each value-added telecommunications service provider must have necessary
facilities for its approved business operations and maintain such facilities in the geographic regions specified in its license; and
I all value-added telecommunications service providers should improve their network and information security, establish a relevant information
safety system and set up emergency plans to ensure network and information safety.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2021 version) (the &#8220;Negative List&#8221;)
promulgated jointly by the MOFCOM and the National Development and Reform Commission (the &#8220;NDRC&#8221;) on December 27, 2021, the
Foreign investors are prohibited from making any investments in the industries which are listed as &#8220;prohibited&#8221; in the Negative
List; and, after satisfying certain additional requirements and conditions as set forth in the Negative List, are allowed to make investments
in the industries which are listed as &#8220;restricted&#8221; in the Negative List. For any foreign investor that fails to comply with
the Negative List, the competent authorities are entitled to ban its investment activities, require such investor to take measures to
correct its non-compliance and impose other penalties. The internet content service, internet audio-visual program services and online
culture activities are subject to foreign investment restrictions/prohibitions set forth in the Negative List.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;<b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Internet Information Services</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Administrative Measures on Internet Information Services (the &#8220;ICP Measures&#8221;) issued by the State Council on September 25,
2000 and amended on January 8, 2011, regulate provisions of Internet information services in the PRC. According to the ICP Measures,
Internet information services refers to provisions of information through the Internet to online subscribers, including commercial and
non-commercial services. Pursuant to the ICP Measures, commercial Internet information service providers shall obtain ICP Licenses from
relevant PRC local authorities before engaging in commercial Internet information services in China. The Measures for the Administration
of Telecommunications Business Licensing issued by Ministry of Information Industry on June 21, 2017 and effective on September 1, 2017
further provides the requirements and formalities regarding application for value-added telecommunications business operation licenses,
which is also regarded as the guideline for application for ICP License in local competent authorities. In addition, according to relevant
PRC laws, administrative regulations or rules, providers of Internet information services in respect of news, publishing, education,
medical treatment, health, pharmaceuticals or medical apparatuses shall obtain consent of the relevant PRC competent authority before
applying for an operating permit or carrying out record-filing procedures.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Additionally,
the ICP Measures and other relevant measures also prohibit publication of any content that propagates, among others, obscenity, pornography,
gambling and violence, incite the commission of crimes or infringe upon the lawful rights and interests of third parties. If an Internet
information services provider detects that information transmitted on its system falls under the specified prohibition, such provider
must immediately terminate the transmission and delete the information and report it to the government authorities. Any provider&#8217;s
violation of these prohibitions, in serious cases, will lead to revocation of its ICP License and shutdown of its Internet systems.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the Online Live Streaming Regulations published by on November 06, 2016 and effective on December 01, 2016, online live streaming
service providers and online live streaming publishers that provide internet news information services without licenses, or exceeding
the scope of their licenses, are subject to punishment by the CAC and the internet information offices at the level of provinces, autonomous
regions, or municipalities directly under the Central Government in accordance with the Regulations for the Administration of Internet
News Information Services which may include an order to cease such services. Other violations of the Online Live Streaming Regulations
are subject to punishment by the national and local internet information offices in accordance with PRC laws; if such violations constitute
crime, criminal liability shall be investigated in accordance with relevant PRC law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Mobile Internet Applications Information Services</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition to the Telecommunications Regulations and other regulations above, mobile applications (the &#8220;APPs&#8221;) and the Internet
application store (the &#8220;APP Store&#8221;) are specially regulated by the Regulations for the Administration of Mobile Internet
Applications Information Services (the &#8220;APP Provisions&#8221;), which were promulgated by the Cyberspace Administration of China
(&#8220;CAC&#8221;) on June 28, 2016 and became effective on August 1, 2016.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the APP Provisions, the APP information service providers shall satisfy relevant qualifications required by laws and regulations,
strictly carry out the information security management responsibilities and fulfill their obligations in various aspects relating to
the real-name system, protection of users&#8217; information and the examination and management of information content. The APP Store
service providers shall file with the local cyberspace administration authorities within thirty (30) days after its APP Store services
have launched, and such APP Store service providers are responsible for overseeing APP providers operated on their stores.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security
and the General Office of the SAMR promulgated the Identification Method of Illegal Collection and Use of Personal Information Through
App, which provides guidance for the regulatory authorities to identify the illegal collection and use of personal information through
mobile apps, and for the app operators to conduct self-examination and self-correction and for other participants to voluntarily monitor
compliance.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 22, 2020, the MIIT issued the Notice on Carrying out Special Rectification Actions in Depth against the Infringement on Users&#8217;
Rights and Interests by Apps to urge app service providers, among others, to enhance the protection of users&#8217; personal information
in relation to the download, installing and upgrade of apps.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Online Transmission of Audio-Visual Programs and Online Living Streaming Business</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 13, 2005, the State Council promulgated the Certain Decisions on the Entry of the Non-public-owned Capital into the Cultural Industry,
according to which private capital shall not use information network to engage in audio-visual programs service. On July 6, 2005, five
PRC governmental authorities, including the Ministry of Culture (&#8220;MOC&#8221;), the State Administration of Radio, Film and Television
(&#8220;SARFT&#8221;), the General Administration of Press and Publication (&#8220;GAPP&#8221;), the National Development and Reform
Commission (&#8220;NDRC&#8221;) and the Ministry of Commerce (&#8220;MOFCOM&#8221;), jointly adopted the Several Opinions on Canvassing
Foreign Investment into the Cultural Sector. On December 20, 2007, the SARFT and the MIIT jointly promulgated the Provisions on the Administration
of Internet Audio-Visual Program Service, which took effect on January 31, 2008 and were subsequently amended on August 28, 2015, according
to which, the entities engaged in business of online audio-visual programs shall obtain the &#8220;License for Online Transmission of
Audio/Visual Program&#8221;. Under these provisions, foreign-invested companies are actually prohibited from engaging in the business
of distributing audio-visual programs and service through Internet.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Providers
of audio-visual program services through the Internet (including through mobile networks), in general, must be either state-owned or
state-controlled entities, and the business to be carried out by such providers must satisfy the overall planning and guidance catalog
for Internet audio-visual program service determined by SARFT; and such providers are required to obtain the License for Online Transmission
of Audio/Video Program issued by National Radio and Television Administration (&#8220;NRTA&#8221;), or complete certain registration
procedures with NRTA.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 28, 2008, SARFT issued a Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission of
Audio-Visual Programs, as amended on August 28, 2015, which further sets out detailed provisions concerning the application and approval
process regarding the License for Online Transmission of Audio/Video Program. The notice also stipulates that the qualified entities
for application of such license shall include the companies absolutely controlled by multiple state-owned shareholders and enterprises
relatively controlled by state-owned capital (there shall be no affiliation between non-state-owned shareholders), and exclude foreign-invested
enterprises. Further, on March 30, 2009, SARFT promulgated the Notice on Strengthening the Administration of the Content of Internet
Audio-Visual Programs, which reiterates the pre-approval requirements for the audio-visual programs transmitted through the Internet,
including through mobile networks, where applicable, and prohibits certain types of Internet audio-visual programs containing violence,
pornography, gambling, terrorism, superstition or other similarly prohibited elements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 17, 2010, the SARFT issued the Internet Audio-Visual Program Services Categories (Provisional), or the Provisional Categories,
as adjusted on April 7, 2017, which classified Internet audio/visual program services into four categories. In addition, the &#8220;Notice
concerning Strengthening the Administration of the Streaming Service of Online Audio/Visual Programs&#8221; promulgated by the State
Administration of Press, Publication, Radio, Film and Television (or the SAPPRFT, which is the predecessor of NRTA) on September 2, 2016
emphasizes that, unless a specific license is granted under the Provisional Categories, the audio/visual programs service provider is
forbidden from engaging in live streaming on major political, military, economic, social, cultural and sports events.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 6, 2012, the SARFT and the CAC issued the Notice Regarding Further Enhancement of Management of Online Audio and Video Programs
such as Online Drama Series and Microfilms, pursuant to which providers of Internet audio-visual program services which are engaged in
the production of online audio-visual programs such as online drama series and microfilms and broadcast such programs on their own websites
shall lawfully obtain the Radio and Television Program Production and Operating Permit issued by local branches of the NRTA and corresponding
License for Online Transmission of Audio/Video Program at the same time. Providers of Internet audio-visual program services shall report
the information on online audio-visual programs such as online drama series and microfilms which have been reviewed and approved to the
provincial branches of the NRTA in their domiciles for filing.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 25, 2016, the SAPPRFT promulgated the Provisions on the Administration of Private Network and Targeted Communication Audio-visual
Program Services, amended on Mar 23, 2021, which apply to the provision of radio, television programs and other audio-visual programs
to a targeted audience on television and all types of handheld electronic equipment. This provision covers the Internet and other information
networks as targeted transmission channels, including the provision of content, integrated broadcast control, transmission and distribution
and other activities conducted in such forms as Internet protocol television, private network mobile television and Internet television.
Anyone who provides private network and targeted transmission audio-visual program services must obtain a License for Online Transmission
of Audio/Video Program issued by the SARFT and operate its business pursuant to the scope as provided in such license. Foreign-invested
enterprises are not allowed to engage in the above referenced businesses.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 1, 2016, the MOC promulgated the Notice on Strengthening the Administration of Network Performance, which regulates the behavior
of entities conducting businesses related to network performance and performers. Entities operating network performances shall be responsible
for the services and content posted on their website by performers. They must refine their content management mechanism and shut down
the channel and stop the dissemination of any network performance as soon as they realize that such network performance is in violation
of relevant laws and regulations. Network performers shall be responsible for their performances and shall not perform any program containing
violence, pornography, or other similarly prohibited elements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, the SAPPRFT issued the Notice Concerning Strengthening the Administration the Streaming Service of Online Audio-Visual Programs
in September 2016, pursuant to which an Internet live-streaming service provider shall (i) equip personnel to review the content of the
live-stream; (ii) establish the technical methods and work mechanisms in order to replace the unlawful content by using the backup program;
and (iii) record the live-streaming program and keep the records for at least sixty (60) days to fulfill the inspections requirements
from the competent administrative authorities. The CAC promulgated the Regulations for the Administration of Online Live-Streaming Services,
or Internet Live-Streaming Services Provisions, on November 4, 2016, effect as of December 1, 2016, according to which, an Internet live-streaming
service provider shall (a) establish a live-streaming content review platform; (b) conduct authentication registration of Internet live-streaming
issuers based on their identity certificates, business licenses and organization code certificates; and (c) enter into a service agreement
with Internet live-streaming services user to specify both parties&#8217; rights and obligations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 16, 2018, the SAPPRFT issued the Notice on Further Regulating the Communication Order of Internet Audio-Visual Programs, which
requires that, among others, audio-visual platforms shall: (i) not produce or transmit programs intended to parody or denigrate classic
works, (ii) not re-edit, re-dub, re-caption or otherwise ridicule classic works, radio and television programs, or original Internet
audio-visual programs without authorization, (iii) not transmit re-edited programs, which unfairly distort the original content, (iv)
strictly monitor the adapted content uploaded by platform users and not provide transmission channels for illicit content, (v) immediately
take down unauthorized content upon receipt of complaints from copyright owners, radio and television stations, or film and television
production institutions, (vi) strengthen the administration of movie trailers and prevent improper broadcasting of movie clips and trailers
prior to authorized release, and (vii) strengthen the administration of sponsorship and endorsement for Internet audio-visual programs.
Pursuant to this notice, the provincial branches of the NRTA shall have the authority to supervise radio and television stations and
websites that offer audio-visual programs within its jurisdiction and require them to further improve their content management systems
and implement relevant management requirements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 18, 2019, the CAC, the Ministry of Culture and Tourism and the National Radio and Television Administration jointly issued the
Administrative Provisions on Internet Audio-Video Information Services, or the Internet Audio-Video Information Services Provisions,
which became effective on January 1, 2020. The Internet Audio-Video Information Services Provisions define &#8220;Internet audio-video
information services&#8221; as providing audio and video information production, uploading and transmission to the public via Internet
platforms such as websites and applications. Entities providing Internet audio-video information services must obtain relevant licenses
subject to applicable PRC laws and regulations and are required to authenticate users&#8217; identities based on their organizational
codes, PRC ID numbers or mobile phone numbers, etc.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
November 2020, the National Radio and Television Administration issued the Notice on Strengthening the Management of Network Live-performance
Streaming and E-Commerce Streaming, which requires a live-performance streaming platform to adopt and practically implement the real-name
registration system for the streamers and the viewers who purchase virtual gifts for streamers by taking measures including real-name
verification, face recognition and human review. Viewers who fail to pass the real-name registration shall not be allowed to purchase
virtual gifts. Live-performance streaming platforms shall block any mechanism that allows minors to purchase any virtual gifts for the
streamers. A platform shall set the limitations of maximum amount for purchasing virtual gifts for each time, each day and each month.
If a viewer making virtual gift purchases that aggregately reach the half of the daily or monthly limitations, the platform shall notify
such viewer and allow such viewer to make further purchase only when he or she confirms the payment through SMS verification or other
methods. If a viewer making virtual gift purchases that aggregately reach the full daily or monthly limitations, the platform shall suspend
purchase services to such viewer. A platform shall also adopt a delayed-fund-transfer system such that if a streamer commits illegal
activities, the purchase of virtual gifts shall be refunded to viewers. In addition, the live-performance streaming platform shall not
adopt operational strategies that encourage viewers to purchase virtual gifts irrationally. If the platform finds that any streamer or
his or her agent implies, solicits or encourages viewers to make large amount purchases by means of disseminating vulgar information,
engaging in organized publicity stunt or engaging a &#8220;water army&#8221; to purchase virtual gifts in large volumes, the platform
shall take measures against such streamer and such agent, list him or her on a watch list and report him or her to the radio and television
administration authorities. In addition, it requires live-performance streaming platforms and e-commerce streaming platforms to complete
filing with the National Information Registration Administration System of Online Audio/Video Platforms prior to November 30, 2020.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 12, 2022, the Online Audio-visual Program Management Department of NRTA and the Publishing Bureau of the Central Propaganda Department
issued the Notice on Strengthening the Management of Livestreaming of Online Games on the Online Audio-visual Program Platforms. The
Notice provides that online audio-visual program platforms, including live streaming platforms shall not (i) disseminate illegal games
on audio-visual program platforms; (ii) stream online games that have not been approved by the competent authorities; and (iii) use live
broadcast rooms and other forms to drive traffic for the illegal game content on various platforms. Further, the Notice requires live
streaming platforms to strengthen the management of game livestreaming content. For example, livestreaming platforms, in particular,
online game livestreaming platforms, shall strictly control the content setting, publicity and interactions of users and take effective
measures to strengthen the management of livestreaming of online games, such as establishing and improving the management system of information
release, follow-up comments and emergency response related to living game programs and improving the program monitoring and public opinion
monitoring mechanism. In addition, livestreaming platforms are also required to strengthen the guidance of the game anchor&#8217;s code
of conduct and establish and implement the protection mechanism for minors. The platforms that conduct livestreaming of online games
shall set up anti-addiction mechanisms for minors, take effective measures to ensure that the &#8220;teenager model&#8221; is effective,
implement the requirements of real-name system, prohibit minors from recharging and rewarding, and set up special channels for refund
of rewards given by minors. The Notice also provides that those who violate the law should not use livestreaming to make sound appearances.
In addition, online audio-visual platforms (including various domestic and overseas individual and institutional accounts opened on relevant
platforms) should not live broadcast overseas game programs or competitions with obtaining approval from relevant authorities.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;Regulations
Relating to Online Cultural Activities</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Ministry of Culture promulgated the Provisional Measures on Administration of Internet Culture firstly in 2011, as most recently amended
on December 15, 2017, and the Notice on Issues Relating to Implementing the Newly Revised Provisional Measures on Administration of Internet
Culture promulgated by the Ministry of Culture in 2011, which apply to entities that engage in activities related to &#8220;online cultural
products.&#8221; &#8220;Online cultural products&#8221; are classified as cultural products developed, published and disseminated through
the Internet which mainly include: (i) online cultural products particularly developed for publishing through the Internet, such as,
among other things, online music and video files, network games and online animation features and cartoons (including flash animation);
and (ii) online cultural products converted from audio and visual products, games, performing arts, artworks and animation features and
cartoons, and published on the Internet. Pursuant to this legislation, entities are required to obtain the Internet Culture Operation
Licenses from the applicable provincial level counterpart of the Ministry of Culture and Tourism (&#8220;MCT&#8221;, which is the predecessor
of MOC) if they intend to commercially engage in any of the following types of activities:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">production, duplication,
    import, release or broadcasting of online cultural products;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">publishing of online cultural
    products on the Internet or transmission thereof to computers, fixed-line or mobile phones, radios, television sets or game consoles
    for the purpose of browsing, reading, reviewing, using or downloading such products by online users; or</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exhibitions or contests
    related to online cultural products.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 12, 2013, the MOC issued the Administrative Measures for Content Self-Review by Internet Culture Business Entities, effective
as of December 1, 2013, which requires Internet culture business entities to review the content of products and services to be provided
prior to providing such content and services to the public. The content management system of an Internet culture business entity is required
to specify the responsibilities, standards and processes for content review as well as accountability measures, and is required be filed
with the provincial level counterpart of the MCT.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Regulations for the Administration of Audio and Video Products, as released by the State Council in December 2001 and last amended in
November 2020, require that the publication, production, duplication, importation, wholesale, retail and renting of audio and video products
are subject to a license issued by competent authorities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
September 2021, the State Council released the Opinions on Improvement of Internet Civilization, which reiterates the necessity of strengthening
the order in cyberspace and requires Internet platforms to strengthen the responsibility of network platform, strengthen the website
platform community rules, user agreement construction, and enhance national security awareness.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
September 15, 2021, the CAC released the Opinions on Further Intensifying Responsibilities of Website Platform for Information Content,
which provides specific requirements for website platforms from various aspects, such as community rules, accounts, content moderation,
content quality management, key functions, platform operation, minors&#8217; online protection and personnel management. Pursuant to
the Opinions, website platforms shall create a positive and healthy cyberspace and steer public opinion in the correct direction. Website
platform are also required to strengthen the management of pop-ups, accurately handle the procedures of sending out push notifications
to users and strictly control the frequency of push notifications.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Virtual Currency</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 25, 2007, the Ministry of Public Security, the MOC, the Ministry of Information Industry and the GAPP jointly issued a circular
regarding online gambling which has implications on the issuance and use of virtual currency. It basically bans the conversion of virtual
currency into real currency or property and prohibits transfer of virtual currency among game players.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 15, 2007, fourteen PRC regulatory authorities jointly issued a circular to further strengthen the oversight of Internet cafes
and online games. In accordance with the circular, the People&#8217;s Bank of China, or PBOC, has the authority to regulate virtual currency,
including: (a) setting limits on the aggregate amount of virtual currency that can be issued by online game operators and the amount
of virtual currency that can be purchased by an individual; (b) stipulating that virtual currency issued by online game operators can
only be used for purchasing virtual products and services within the online games and not for purchasing tangible or physical products;
(c) requiring that the price for redemption of virtual currency shall not exceed the respective original purchase price; and (d) banning
the trading of virtual currency.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 4, 2009, the MOC and the MOFCOM jointly issued a notice to strengthen the administration of online game virtual currency. The Virtual
Currency Notice requires businesses that (a) issue online game virtual currency (in the form of prepaid cards and/or pre-payment or prepaid
card points), or (b) offer online game virtual currency transaction services to apply for approval from the MCT through its provincial
branches within three (3) months after the issuance of the notice. The Virtual Currency Notice businesses that issue virtual currency
for online games are prohibited from offering services that can trade virtual currency. Any company that fails to file the necessary
application will be subject to sanctions, including but not limited to, mandatory corrective actions and fines. Based on the Virtual
Currency Notice, the MOC further promogulated a filing guideline for the &#8220;online game virtual currency distribution enterprises&#8221;
and &#8220;online game virtual currency trading enterprises&#8221; on July 20, 2009 to regulate the entities involving such virtual currency
businesses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Currently,
the PRC government has not promulgated any specific rules, laws or regulations to directly regulate virtual currency, except for the
above-mentioned online game virtual currency. To comply with the principle of above-mentioned regulations, in relation to online streaming
business, our virtual currency currently can only be used by viewers to exchange for virtual items/gifts to be used to show support for
performers or gain access to privileges and special features in the channels which are services in nature instead of &#8220;real currency
or property.&#8221; Once the virtual currency is exchanged by viewers for virtual items/gifts or the relevant privileged services, the
conversion transaction is completed and we will immediately cancel the virtual properties in our internal system. See &#8220;Item 3.
Key Information&#8212;D. Risk Factors&#8212;Risk Factors Relating to Doing Business in China&#8212;Restrictions on virtual currency may
adversely affect our revenues.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the Virtual Currency Notice, &#8220;online games virtual currency trading service provider&#8221; refers to the business that provides
platform services related to virtual trading in online games among game users. The Virtual Currency Notice further requires an online
game virtual currency transaction service provider to comply with relevant e-commerce regulations issued by the Ministry of Commerce.
According to the Guiding Opinions on Online Trading (Interim) issued by the Ministry of Commerce on March 6, 2007, online platform services
are trading services provided to online buyers and sellers through a computer information system operated by the service provider.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 31, 2018, the SCNPC promulgated the E-commerce Law, or the PRC E-commerce Law, which became effective on January 1, 2019. The
E-commerce Law clarifies on the obligations of the e-commerce platform operators. On March 15, 2021, the SAMR issued the Measures for
the Supervision and Administration of Online Transactions, or the Online Transaction Measures, which became effective on May 1, 2021
and replaced the Administrative Measures for the Online Trading promulgated on January 24, 2016. The Online Transaction Measures further
emphasize, among others, that e-commerce platform operators are required to establish a mechanism to inspect and monitor products and
services provided by the merchants, and shall submit the identity information of those merchants to the local branches of the SAMR.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Commercial Performances</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Administrative Regulations on Commercial Performances was firstly promulgated by the State Council in 2005 and most recently amended
on November 29, 2020. According to these regulations, to legally engage in commercial performances, a culture and arts performance group
shall have full-time performers and equipment in line with its performing business, and file an application with the culture administrative
department of the people&#8217;s government at the county level for approval; while a performance brokerage agency shall have three or
more full-time performance brokers and funds suitable for the relevant business, and file an application with the culture administrative
department at the provincial level. The culture administrative department shall make a decision within twenty (20) days from the receipt
of the application whether to approve the application, and upon approval, will issue a commercial performance license. Currently, there
is no related regulations or governmental interpretation to specify if above regulations apply to live streaming business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Production of Radio and Television Programs</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 19, 2004, the SARFT issued the Regulations on the Administration of Production and Operation of Radio and Television Programs, or
the Radio and TV Programs Regulations, which took effect on August 20, 2004 and was amended on August 28, 2015. The Radio and TV Programs
Regulations require any entities engaging in the production and operation of radio and television programs to obtain a license for such
businesses from the NRTA or its provincial branches. Entities with the Radio and Television Program Production and Operating Permit must
conduct their business operations strictly in compliance with the approved scope of production and operations and these entities (except
radio and TV stations) must not produce radio and TV programs regarding current political news or similar subjects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Intellectual Property Rights</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Copyright</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">China
has enacted various laws and regulations relating to the protection of copyright. China is a signatory to some major international conventions
on protection of copyright and became a member of the Berne Convention for the Protection of Literary and Artistic Works in October 1992,
the Universal Copyright Convention in October 1992 and the Agreement on Trade-Related Aspects of Intellectual Property Rights upon its
accession to the World Trade Organization in December 2001.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC Copyright Law, promulgated in 1990 and amended in 2001, 2010 and 2020, or the Copyright Law, and its related implementing regulations,
promulgated in 2002 and amended in 2013, are the principal laws and regulations governing copyright related matters. The Copyright Law
provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, enjoy copyright of their works,
which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
State Council and the National Copyright Administration have promulgated various rules and regulations relating to the protection of
software in China. According to these rules and regulations, software owners, licensees and transferees may register their rights in
software with the Copyright Protection Center of China and obtain software copyright registration certificates. Although such registration
is not mandatory under PRC law, software owners, licensees and transferees are encouraged to go through the registration process and
registered software rights may be entitled to better protection. For the number of software programs for which we had registered software
copyrights as of the date of this statement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
amended Copyright law covers Internet activities, products disseminated over the Internet and software products, among the subjects entitled
to copyright protection. Registration of copyright is voluntary, and it is administrated by the Copyright Protection Center of China.
To further clarify some key Internet copyright issues, on December 17, 2012, the PRC Supreme People&#8217;s Court promulgated the Regulation
on Several Issues Concerning Applicable Laws on Trial of Civil Disputes over the Infringement of Information Network Transmission Right,
or the 2013 Regulation. The 2013 Regulation took effect on January 1, 2013, and replaced the Interpretations on Some Issues Concerning
Applicable Laws for Trial of Disputes over Internet Copyright that was initially adopted in 2000 and subsequently amended in 2004 and
2006. On Jan. 1, 2021, 2013 Regulation was amended (2021 Regulation). Under the 2021 Regulation, where an Internet information service
provider works in cooperation with others to jointly provide works, performances, audio and video products of which the right holders
have information network transmission right, such behavior will constitute joint infringement of third parties&#8217; information network
transmission right, and the PRC court shall order such Internet information service provider to assume joint liability for such infringement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">To
address the problem of copyright infringement related to content posted or transmitted on the Internet, the National Copyright Administration
and Ministry of Information Industry jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet
on April 29, 2005. These measures, which became effective on May 30, 2005, apply to acts of automatically providing services such as
uploading, storing, linking or searching works, audio or video products, or other content through the Internet based on the instructions
of Internet users who publish content on the Internet, or the Internet Content Providers, without editing, amending or selecting any
stored or transmitted content. When imposing administrative penalties upon the act which infringes upon any user&#8217;s right of communication
through information networks, the Measures for Imposing Copyright Administrative Penalties, promulgated in 2009, shall be applied.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Where
a copyright holder finds that certain Internet content infringes upon its copyright and sends a notice to the relevant Internet information
service operator, the relevant Internet information service operator is required to (i) immediately take measures to remove the relevant
content and (ii) retain all infringement notices for six months and to record the content, display time and IP addresses or the domain
names related to the infringement for 60 days. If the content is removed by an Internet information service operator according to the
notice of a copyright holder, the content provider may deliver a counter-notice to both the Internet information service operator and
the copyright holder, stating that the removed content does not infringe upon the copyright of other parties. After the delivery of such
counter-notice, the Internet information service operator may immediately reinstate the removed content and shall not bear administrative
legal liability for such reinstatement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">An
Internet information service operator may be subject to cease-and-desist orders and other administrative penalties such as confiscation
of illegal income and fines, if it is clearly aware of a copyright infringement through the Internet or, although not aware of such infringement,
it fails to take measures to remove relevant content upon receipt of the copyright owner&#8217;s notice of infringement and, as a result,
damages public interests. Where there is no evidence to indicate that an Internet information service operator is clearly aware of the
existence of copyright infringement, or the Internet information service operator has taken measures to remove relevant content upon
receipt of the copyright owner&#8217;s notice, the Internet information service provider shall not bear the relevant administrative legal
liabilities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 18, 2006, the State Council issued the Protection of the Right of Communication through Information Network, which took effect on
July 1, 2006 and amended on January 30, 2013. Under this regulation, an internet information service provider may be exempt from indemnification
liabilities under the certain circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Patent</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
National People&#8217;s Congress adopted the PRC Patent Law in 1984 and amended it in 1992, 2000, 2008 and 2020, respectively. A patentable
invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability. Patents cannot be
granted for scientific discoveries, rules and methods for intellectual activities, methods used to diagnose or treat diseases, animal
and plant breeds or substances obtained by means of nuclear transformation. The Patent Office under the State Intellectual Property Office
is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention
and a ten-year term for a utility model or design. Except under certain specific circumstances provided by law, any third-party user
must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the
rights of the patent holder.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the PRC Patent Law, if the Patent Office finds the application of an invention conforms to the legal requirements after its preliminary
examination of such application documents, it shall publish the application promptly within eighteen (18) full months after the filing
date. According to the Guidelines of Patent Examination, the examination of a patent shall include the preliminary examination, the substantive
examination, examination of international applications entering the national phase and review. However, the above-mentioned regulations
do not explicitly state how long it takes for a patent application to be approved or denied. In practice, it generally may take up to
one year for the Patent Office to review and approve or deny applications of patents in the category of utility model or design and two
to five years in the category of invention.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Trademark</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC Trademark Law, adopted in 1982 and amended in 1993, 2001, 2013 and 2019, with its implementation rules adopted in 2014, protects
registered trademarks. The Trademark Office of National Intellectual Property Administration, or the Trademark Office handles trademark
registrations and grants a protection term of ten years to registered trademarks, which may be extended for another ten years upon request.
Trademark license agreements must be filed with the Trademark Office for record.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Domain
name</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 27, 2017, the MIIT promulgated the Notice of the Ministry of Industry and Information Technology on Regulating the Use of Domain
Names in Providing Internet-based Information Services, which became effective on January 1, 2018. Pursuant to the notice, the domain
name used by an internet-based information service provider in providing internet-based information services must be registered and owned
by such provider in accordance with the law. If the internet-based information service provider is an entity, the domain name registrant
must be the entity (or any of the entity&#8217;s shareholders), or the entity&#8217;s principal or senior manager.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 18, 2019, China Internet Network Information Center (&#8220;CNNIC&#8221;) issued the Implementing Rules for country code Top-Level
Domain, ccTLDs. On June 18, 2019 the CNNIC issued, pursuant to which the CNNIC can authorize a domain name dispute resolution institution
to decide disputes. On August 24, 2017, the MIIT promulgated the Measures for Administration of Internet Domain Names, which regulates
the registration of domain names.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Internet Infringement</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 28, 2020 the National People&#8217;s Congress promulgated the Civil Code of the People&#8217;s Republic of China, or the Civil Law, which
became effective on January 1, 2021. Under the Civil Law, an Internet user or an Internet service provider that infringes upon the civil
rights or interests of others through using the Internet assumes tort liability. If an Internet user infringes upon the civil rights
or interests of another through using the Internet, the person being infringed upon has the right to notify and request the Internet
service provider whose Internet services are facilitating the infringement to take necessary measures including the deletion, blocking
or disconnection of an Internet link. If, after being notified, the Internet service provider fails to take necessary measures in a timely
manner to end the infringement, it will be jointly and severally liable for any additional harm caused by its failure to act.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Internet Content and Information/Data Security</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Administrative Measures on Internet Information Services (effective as of January 8, 2011 and amended on January 8, 2011) specify that
Internet information services regarding news, publications, education, medical and health care, pharmaceutical and medical appliances,
among other things, are to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited
from providing services beyond those included in the scope of their ICP Licenses or filings. The PRC government has promulgated measures
relating to Internet content through a number of governmental agencies, including the MIIT, the Ministry of Culture and the General Administration
of Press and Publication. These measures specifically prohibit Internet activities, that result in the publication of any content which
is found to propagate obscenity, gambling or violence, instigate crimes, undermine public morality or the cultural traditions of the
PRC or compromise state security or secrets. Internet information providers must monitor and control the information posted on their
websites. If any prohibited content is found, they must remove the offensive content immediately, keep a record of it and report it to
the relevant authorities.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 13, 2005, the Ministry of Public Security promulgated Provisions on Technological Measures for Internet Security Protection,
or the Internet Protection Measures, which took effect on March 1, 2006. The Internet Protection Measures requires all Internet information
services operators to take proper measures including anti-virus, data back-up and other related measures, and keep records of certain
information about their users (including user registration information, log-in and log-out time, IP address, content and time of posts
by users) for at least sixty (60) days and submit the above information as required by laws and regulations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Standing Committee of National People&#8217;s Congress, China&#8217;s national legislative body, enacted the Decisions on the Maintenance
of Internet Security on December 28, 2000 and subsequently amended on August 27, 2009, that may subject any persons to criminal liabilities
in China for any attempt to: (i) gain improper entry into a computer or system of strategic importance; (ii) disseminate politically
disruptive information; leak state secrets; (iv) spread false commercial information; or (v) infringe on intellectual property rights.
The Ministry of Public Security has promulgated measures that prohibit the use of the Internet in ways which, among other things, results
in a leakage of state secrets or a spread of socially destabilizing content.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer Information Network with
International Connections (amended by the State Council of PRC. in 2011), which prohibit using the Internet in ways which, among others,
result in a leak of state secrets or a spread of socially destabilizing content. The Ministry of Public Security has supervision and
inspection powers in this regard, and relevant local security bureaus may also have jurisdiction. If an ICP License holder violates these
measures, the PRC government may revoke its ICP License and shut down its website.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
June 22, 2007, the Ministry of Public Security, the State Secrecy Bureau, the State Cipher Code Administration and the Information Office
of the State Council jointly promulgated the Circular on Printing and Distributing the Administrative Measures for the Graded Protection
of Information Security. According to the Circular, the security protection grade of an information system may be classified into five
grades. To newly build an information system of Grade II or above, its operator or user shall, within 30 days after it is put into operation,
handle the record- filing procedures at the local public security organ at the level of municipality divided into districts or above
of its locality.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 28, 2012, the Standing Committee of the National People&#8217;s Congress reiterated relevant rules on the protection of Internet
information by issuing the Decision on Strengthening the Protection of Network Information, or the 2012 Decision. The 2012 Decision distinctly
clarified certain relevant obligations of Internet information service providers. Once it discovers any transmission or disclosure of
information prohibited by the relevant laws and regulations, the Internet information service provider shall stop transmission of such
information, take measures such as elimination, keeping relevant records and reporting to relevant authorities. To comply with the above
laws and regulations, we have developed the following mechanisms to monitor the content on our platforms as AI-backed automatic detection
process, manual review, self-regulation system by streamers and room managers and report by users.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 15, 2019, the CAC promulgated the Provisions on the Ecological Governance of Network Information Contents, which became effective
on March 1, 2020. It requires network platform operators like us not to disseminate illegal content, nor to present exaggerated, sexually
suggestive, discriminative or otherwise inappropriate contents in eye-catching areas such as home page, popup and hot search list.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 1, 2015, the SCNPC issued the PRC National Security Law, which came into effect on the same day. The National Security Law provides
that the state shall safeguard the sovereignty, security and cybersecurity development interests of the state, and that the state shall
establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet
and information technology products and services, and other important activities that are likely to impact national security of China.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 30, 2021, the State Council promulgated the Regulations on Protection of Security of Critical Information Infrastructure, effective
on September 1, 2021, pursuant to which, a &#8220;critical information infrastructure&#8221; refers to critical network facilities and
information systems involved in important industries and sectors, such as public communication and information services, energy, transportation,
water conservancy, finance, public services, governmental digital services, science and technology related to national defense industry,
as well as those which may seriously endanger national security, the national economy and citizens&#8217; livelihoods or public interests
if damaged or malfunctioned, or if any leakage of data in relation thereto occurs. The appropriate governmental departments and supervision
and management departments of the aforementioned important industries will be responsible for (i) organizing the identification of critical
information infrastructures in their respective industries in accordance with relevant identification rules, and (ii) promptly notifying
the identified operators and the public security department of the State Council of the identification results. In the event of occurrence
of any major cybersecurity incident or discovery of any major cybersecurity threat for the critical information infrastructure, the operator
shall report to the protection authorities and the public security authorities as required.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 14, 2021, the CAC published Measures on Network Data Security Management (Draft for Comment), or the Draft Measures for Internet
Data Security, which provides that data processors conducting the following activities shall must for cybersecurity review: (i) merger,
reorganization or separation of Internet platform operators that have acquired a large number of data resources related to national security,
economic development or public interests affecting or possibly affecting national security; (ii) listing abroad of data processors processing
over one million users&#8217; personal information; (iii) listing in Hong Kong that affects or may affect national security; and (iv)
other data processing activities that affect or may affect national security. The Draft Measures for Internet Data Security also requires
data processors processing over one million users&#8217; personal information to comply with the regulations on important data processors,
including, among others, appointing a person in charge of data security and establishing a data security management organization, filing
with the competent authority within 15 working days after identifying its important data, formulating data security training plans and
organizing data security education and training for all staff every year, and that the education and training time of data security related
technical and management personnel shall not be less than 20 hours per year. The Draft Measures for Internet Data Security also provides
that data processors processing important data or going public overseas shall conduct an annual data security assessment by themselves
or entrust a data security service institution to do so, and submit the data security assessment report of the previous year to the local
branch of CAC before January 31 of each year. Further, the Draft Measures for Internet Data Security also require Internet platform operators
to establish platform rules, privacy policies and algorithm strategies related to data, and solicit public comments on their official
websites and personal information protection-related sections for no less than 30 working days when they formulate platform rules or
privacy policies or makes any amendments that may have significant impacts on users&#8217; rights and interests. Platform rules and privacy
policies formulated by operators of large Internet platforms with more than 100 million daily active users, or amendments to such rules
or policies by operators of large Internet platforms with more than 100 million daily active users that may have significant impacts
on users&#8217; rights and interests shall be evaluated by a third-party organization designated by the CAC and reported to local branch
of the CAC for approval.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
September 17, 2021, the CAC and other eight government authorities jointly issued the Guiding Opinions on Strengthening the Comprehensive
Governance of Network Information Service Algorithms with the aim to, within three years, gradually establish a comprehensive governance
pattern for algorithm security with a complete governance mechanism, a refined regulatory system and a standardized algorithm ecosystem.
According to the Guiding Opinions on Strengthening the Comprehensive Governance of Network Information Service Algorithms, enterprises
shall establish an algorithm security accountability system and a system for the review of scientific and technological ethics, enhance
the organizational structure for algorithm security, intensify efforts in the prevention of risks and the handling of hidden dangers,
and increase the capacity and level in handling algorithm security emergencies. Enterprises shall raise their awareness of responsibility
and assume primary responsibilities for outcomes caused by the application of algorithms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 28, 2021, the CAC and twelve other PRC regulatory authorities jointly revised and issued the Cyber Security Review Measures
(&#8220;the Review Measures&#8221;), which became effective on February 15, 2022. The Review Measures provides, among others, (i) the
purchase of cyber products and services by critical information infrastructure operators (the &#8220;CIIOs&#8221;) and the network platform
operators (the &#8220;Network Platform Operators&#8221;) which engage in data processing activities that affects or may affect national
security shall be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the
implementation of cybersecurity review under the CAC; and (ii) the Network Platform Operators with personal information data of more
than one million users that seek for listing in a foreign country are obliged to apply for a cybersecurity review by the Cybersecurity
Review Office.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Internet
companies in China are required to complete security filing procedures and regularly update information security and censorship systems
for their websites with local public security bureau. The PRC Law on Preservation of State Secrets, which became effective on October
1, 2010 requires an internet information services providers to discontinue disseminating any information that may be deemed to be leaked
state secrets and to report such incidents in a timely manner to the state security and public security authorities. Failure to do so
in a timely and adequate manner may subject the internet information services providers to liability and certain penalties given by the
Ministry of State Security, the Ministry of Public Security and/or the MIIT or their respective local branches.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Privacy Protection</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the Several Provisions on Regulating the Market Order of Internet Information Services, issued by the Ministry of Industry and Information
Technology in 2011, an ICP service operator may not collect any user personal information or provide such information to third parties
without the consent of a user. An ICP service operator must expressly inform the users of the method, content and purpose for the collection
and processing of such user personal information and may only collect such information necessary for the provision of its services. PRC
laws and regulations prohibit Internet content providers from disclosing any information transmitted by users through their networks
to any third parties without their authorization unless otherwise permitted by law. An ICP service operator is also required to properly
keep the user personal information, and in case of any leak or likely leak of the user personal information, the ICP service operator
must take immediate remedial measures and, in severe circumstances, make an immediate report to the telecommunication&#8217;s regulatory
authority. In addition, pursuant to the 2012 Decision and the Order for the Protection of Telecommunication and Internet User Personal
Information issued by the Ministry of Industry and Information Technology in July 2013, any collection and use of user personal information
must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified
purposes, methods and scope. An ICP service operator must also keep such information strictly confidential, and is further prohibited
from divulging, tampering or destroying of any such information, or selling or providing such information to other parties. If an Internet
content provider violates these regulations, the MIIT or its local bureaus may impose penalties and the Internet content provider may
be liable for damages caused to its users.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Personal Information Protection Law of the People&#8217;s Republic of China (&#8220;PIPL&#8221;) was passed on August 20, 2021 and went
into effect November 1, 2021. The PIPL generally covers all organizations operating in China processing personal information and applies
to the activities of handling the personal information of natural persons within the borders of China. Moreover, PIPL will require compliance
initiatives on the part of Chinese organizations and foreign companies operating in China. According the PIPL, Information handlers have
several responsibilities, including adopting the certain measures to ensure personal information handling conforms to the provisions
of laws and administrative regulations, and prevent unauthorized access as well as personal&#160;information leaks, distortion, or loss.
The PIPL has several enforcement mechanisms, including warnings, orders to stop illegal activity, fines, and confiscation of unlawful
income. Illegal acts may also be recorded in China&#8217;s&#160;Social Credit System. In addition, individuals can also sue handlers for violation
of their rights.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 1, 2021, the MIIT published the Notice on the Implementation of Actions to Improve the Perception of Information and Communication
Services, which stipulates that enterprises shall provide a list of personal information collected and a list of personal information
shared with third parties, and shall display such lists in the second-level menu of the APP for users&#8217; access (&#8220;Dual Lists
Obligation&#8221;). Furthermore, the Notice on the Implementation of Actions to Improve the Perception of Information and Communication
Services requires certain enterprises as enumerated in its schedule to fulfill the Dual Lists Obligation by the end of 2021, but it does
not provide a clear deadline for other enterprises.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
October 1, 2019, the Office of the Central Cyberspace Affairs Commission issued the Provisions on the Cyber Protection of Children&#8217;s
Personal Information, which requires, among others, that network operators who collect, store, use, transfer and disclose personal information
of children under the age of 14 shall establish special rules and user agreements for the protection of children&#8217;s personal information,
inform the children&#8217;s guardians in a noticeable and clear manner and shall obtain the consent of the children&#8217;s guardians.
Furthermore, the authorities issuing the circular vow to initiate a campaign to correct unlawful collection and usage of personal information
via Apps from January 2019 through December 2019. The PRC Civil Code further provides in a stand-alone chapter of right of personality
and reiterates that the personal information of a natural person shall be protected by the law. Any organization or individual shall
legitimately obtain such personal information of others in due course on a need-to-know basis and ensure the safety and privacy of such
information, and refrain from excessively handling or using such information.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the Ninth Amendment to the Criminal Law of the PRC issued by the SCNPC on August 29, 2015, effective on November 1, 2015, any Internet
service provider that fails to fulfill the obligations related to Internet information security as required by applicable laws and refuses
to take corrective measures, will be subject to criminal liability for: (i) any large-scale dissemination of illegal information; (ii)
any severe effect due to the leakage of users&#8217; personal information; (iii) any serious loss of evidence of criminal activities;
or (iv) other severe situations, and any individual or entity that (a) sells or provides personal information to others unlawfully or
(b) steals or illegally obtains any personal information will be subject to criminal liability in severe situations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 7, 2016, the SCNPC promulgated the PRC Cybersecurity Law, which came into effect on June 1, 2017. Pursuant to the Cybersecurity
Law, network operators shall follow their cybersecurity obligations according to the requirements of the classified protection system
for cybersecurity, including: (i) formulating internal security management systems and operating instructions, determining the persons
responsible for cybersecurity and implementing the responsibility for cybersecurity protection; (ii) taking technological measures to
prevent computer viruses, network attacks, network intrusions and other actions endangering cybersecurity; (iii) taking technological
measures to monitor and record the network operation status and cybersecurity incidents; (iv) taking measures such as data classification,
and back-up and encryption of important data; and (v) other obligations stipulated by laws and administrative regulations. In addition,
network operators shall follow the principles of legitimacy to collect and use personal information and disclose their rules of data
collection and use, clearly express the purposes, means and scope of collecting and using the information and obtain the consent of the
persons whose data is gathered.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 23, 2019, the Office of the Central Cyberspace Affairs Commission and other three authorities jointly issued the Circular on
the Special Campaign of Correcting Unlawful Collection and Usage of Personal Information via Apps. Pursuant to this 2019 circular: (i)
App operators are prohibited from collecting any personal information irrelevant to the services provided by such operator; (ii) information
collection and usage policy should be presented in a simple and clear way, and such policy should be consented by the users voluntarily;
(iii) authorization from users should not be obtained by coercing users with default or bundling clauses or making consent a condition
of a service. App operators violating such rules can be ordered by authorities to correct its incompliance within a given period, be
reported in public; or even quit its operation or cancel its business license or operational permits.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 26, 2021, the MIIT issued the Interim Administrative Provisions on Personal Information Protection in Internet Mobile Applications
(Draft for Comment), which sets forth two principles of collection and utilization of personal information, namely &#8220;explicit consent&#8221;
and &#8220;minimum necessity.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Internet Publication and Cultural Products</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 4, 2016, State Administration of Press, Publication, Radio, Film and Television (or the SAPPRFT, which is the predecessor of
NRTA), and the MIIT issued the Administrative Provisions on Online Publishing Services, or the Online Publishing Provisions, which took
effect on March 10, 2016. According to the Online Publishing Provisions, all online publishing services provided within the territory
of China are subject to the Online Publishing Provisions, and an online publishing services permit shall be obtained in order to provide
online publishing services. Pursuant to the Online Publishing Provisions, &#8220;online publishing services&#8221; refer to providing
online publications to the public through information networks; and &#8220;online publications&#8221; refer to digital works with publishing
features such as having been edited, produced or processed and are made available to the public through information networks, including:
(i) written works, pictures, maps, games, cartoons, audio-visual reading materials and other original digital works containing useful
knowledge or ideas in the field of literature, art, science or other fields; (ii) digital works of which the content is identical to
that of any published book, newspaper, periodical, audio-visual product, electronic publication or the like; (iii) network literature
databases or other digital works, derived from any of the aforesaid works by selection, arrangement, collection or other means; and (iv)
other types of digital works as may be determined by the SAPPRFT.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Foreign Currency Exchange and Dividend Distribution</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Foreign
currency exchange</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
core regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, as amended in August
2008, or the FEA Regulations. Certain organizations in the PRC, including foreign invested enterprises, may purchase, sell and/or remit
foreign currencies at certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. However,
approval of the State Administration of Foreign Exchange, or SAFE, is required for capital account transactions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Direct Investment,
as amended, which substantially amends and simplifies the foreign exchange procedure. Pursuant to this circular, the opening of various
special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee
accounts, the reinvestment of RMB proceeds by foreign investors in the PRC and remittance of foreign exchange profits and dividends by
a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital
accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the
Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors
and the Supporting Documents in May 2013, as amended, which specifies that the administration by SAFE or its local branches over direct
investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business
relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">After
a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, became
effective on June 1, 2015, instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and
overseas direct investment from SAFE, entities and individuals will be required to apply for such foreign exchange registrations from
qualified banks. The qualified banks, under the supervision of SAFE, directly examine the applications and conduct the registration.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 30, 2015, the SAFE issued the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital
of Foreign-Invested Enterprises, or SAFE Circular 19, effective on June 1, 2015 and amended on December 30, 2019. Under SAFE Circular
19, a foreign-invested enterprise, within the scope of business, may also choose to convert its registered capital from foreign currency
to Renminbi on a discretionary basis, and the Renminbi capital so converted can be used for equity investments within the PRC, which
will be regarded as the reinvestment of foreign-invested enterprise. Nevertheless, Circular 19 reiterates the principle that Renminbi
converted from foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes
beyond its business scope. Further, in June 2016, the SAFE issued the Circular on Reforming and Regulating Policies on the Control over
Foreign Exchange Settlement of Capital Accounts, or Circular 16, which took effect on the same day. Compared to Circular 19, Circular
16 provides that discretionary foreign exchange settlement applies to foreign exchange capital, foreign debt offering proceeds and remitted
foreign listing proceeds, and the corresponding Renminbi obtained from foreign exchange settlement are not restricted from extending
loans to related parties or repaying the intercompany loans (including advances by third parties).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness
and Compliance Verification, or Circular 3, which stipulates several capital control measures with respect to the outbound remittance
of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board
resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic
entities shall hold income to account for previous years&#8217; losses before remitting the profits. Moreover, pursuant to Circular 3,
domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions,
contracts and other proof when completing the registration procedures in connection with an outbound invest.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
October 23, 2019, SAFE issued the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or SAFE Circular 28.
Among others, SAFE Circular 28 relaxes the prior restrictions and allows the foreign-invested enterprises without equity investment as
in their approved business scope to use their capital obtained from foreign exchange settlement to make domestic equity investment as
long as the investments are real and in compliance with the foreign investment-related laws and regulations. In addition, SAFE Circular
28 stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and
overseas listing, for the purpose of domestic payments without providing authenticity certifications to the relevant banks in advance
for those domestic payments. According to the Circular on Optimizing the Administration of Foreign Exchange to Support the Development
of Foreign-related Business issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments using the
income under their capital accounts generated from their capital, foreign debt and overseas listing, without providing materials for
each transaction evidencing the authenticity in advance, provided that the capital usage is authentic and compliant with the current
capital account income usage management regulations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Dividend
distribution</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
principal regulations governing distribution of dividends paid by wholly foreign-invested enterprises include the PRC Company Law, promulgated
in 1993 and amended in 2004, 2005, 2013 and 2018, and the Foreign Investment Law and its Implementation Rules.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
these regulations, a wholly foreign-invested enterprise in China, or a WFOE, may pay dividends only out of its accumulated profits, if
any, determined in accordance with PRC accounting standards and regulations. In addition, a WFOE is required to allocate at least 10%
of its accumulated profits each year, if any, to statutory reserve funds unless its reserves have reached 50% of the registered capital
of the enterprises. These reserves are not distributable as cash dividends. The proportional ratio for withdrawal of rewards and welfare
funds for employees shall be determined at the discretion of the WFOE. Profits of a WFOE shall not be distributed before the losses thereof
before the previous accounting years have been made up. Any undistributed profit for the previous accounting years may be distributed
together with the distributable profit for the current accounting year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the SAFE&#8217;s Circular on Relevant Issues Relating to Domestic Resident&#8217;s Investment and Financing and Roundtrip Investment
through Special Purpose Vehicles, or SAFE Circular 37, issued and effective on July 4, 2014, and its appendices, PRC residents, including
PRC institutions and individuals, must register with local branches of the SAFE in connection with their direct establishment or indirect
control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents&#8217; legally owned assets
or equity interest in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a &#8220;special purpose
vehicle.&#8221; SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect
to the special purpose vehicle, including but not limited to increases or decreases of capital contributed by PRC individuals, share
transfer or exchange, merger, division or other material event.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the
PRC subsidiaries of that special purpose vehicle may be prohibited from making distributions of profit to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities and the special purpose vehicle may be restricted in their ability to
contribute additional capital into its PRC subsidiary. And, failure to comply with the various SAFE registration requirements described
above could result in liability under PRC law for foreign exchange evasion, including (i) up to 30% of the total amount of foreign exchange
remitted overseas and deemed to have been evasive and (ii) in circumstances involving serious violations, a fine of no less than 30%
of and up to the total amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons at our
PRC subsidiaries who are held directly liable for the violations may be subject to criminal sanctions. These regulations apply to our
direct and indirect shareholders who are PRC residents and may apply to any offshore acquisitions and share transfer that we make in
the future if our shares are issued to PRC residents.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Stock
Option Rules</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the Circular on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly Listed Company issued by the SAFE on February 15, 2012, or the SAFE Circular 7, employees, directors, supervisors
and other senior management participating in any stock incentive plan of an overseas publicly listed company who are PRC citizens or
who are non PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required
to register with the SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete
certain other procedures. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit
their ability to contribute additional capital into their wholly foreign-owned subsidiaries in China and limit these subsidiaries&#8217;
ability to distribute dividends to their overseas parent company. The PRC agents shall, on behalf of the PRC residents who have the right
to exercise the employee share options, apply to the SAFE or its local branches for an annual quota for the payment of foreign currencies
in connection with the PRC residents&#8217; exercise of the employee share options. The foreign exchange proceeds received by the PRC
residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies
must be remitted into the bank accounts in the PRC opened by the PRC agents before distribution to such PRC residents. In addition, the
PRC agents shall file each quarter the form for record-filing of information of the Domestic Individuals Participating in the Stock Incentive
Plans of Overseas Listed Companies with the SAFE or its local branches. We and our PRC citizen employees who are granted share options,
or PRC option holders, will be subject to the SAFE Circular 7 after we have become an overseas listed company. If PRC option holders
fail to comply with the SAFE Circular 7, we and PRC option holders may be subject to fines and other legal sanctions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, the State Administration for Taxation has issued circulars concerning employee share options, under which employees working
in the PRC who exercise share options will be subject to PRC individual income tax. our PRC subsidiaries have obligations to file documents
related to employee share options with relevant tax authorities and to withhold individual income taxes of those employees who exercise
their share options. If our employees fail to pay or if Scienjoy Inc. fail to withhold their income taxes as required by relevant laws
and regulations, we may face sanctions imposed by the PRC tax authorities or other PRC government authorities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Administration Measures on Individual Foreign Exchange Control were promulgated by the PBOC on December 25, 2006, and their Implementation
Rules, issued by the SAFE on January 5, 2007, became effective on February 1, 2007 and amended on May 29, 2016. Under these regulations,
all foreign exchange matters involved in employee stock ownership plans and stock option plans participated in by onshore individuals,
among others, require approval from the SAFE or its authorized branch.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Foreign Investment</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Foreign Investment Law of the PRC, adopted by the National People&#8217;s Congress on March 15, 2019 and its Implementing Regulation
adopted by the State Council on December 12, 2019 became effective on January 1, 2020. Pursuant to the Foreign Investment Law of the
PRC, China will grant national treatment to foreign invested entities, except for those foreign-invested entities that operate in industries
that fall within &#8220;restricted&#8221; or &#8220;prohibited&#8221; categories as prescribed in the &#8220;negative list&#8221; to
be released or approved by the State Council. On December 31, 2019, the Ministry of Commerce and the SAMR jointly promulgated the Measures
for Information Reporting on Foreign Investment, which became effective on January 1, 2020. Pursuant to the measures, where a foreign
investor directly or indirectly carries out investment activities in the PRC, the foreign investor or the foreign-invested enterprise
must submit the investment information to the competent commerce department for further handling.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 27, 2021, the Ministry of Commerce and the NDRC promulgated the Special Administrative Measures for Entrance of Foreign Investment,
or the Negative List, which came into effect on January 1, 2022. Pursuant to the Negative List, foreign investors should refrain from
making investment in any of prohibited sectors specified in the Negative List, and foreign investors are required to obtain the permit
for access to other sectors that are listed in the Negative List but not classified as &#8220;prohibited.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
December 2020, the NDRC and the Ministry of Commerce promulgated the Measures for the Security Review of Foreign Investment, which came
into effect on January 18, 2021. The NDRC and the Ministry of Commerce will establish a working mechanism office in charge of the security
review of foreign investment. Such measures define foreign investment as direct or indirect investment by foreign investors in the PRC,
which include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investment in new onshore
    projects or establishment of wholly foreign owned onshore companies or joint ventures with foreign investors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">acquiring equity or asset
    of onshore companies by merger and acquisition; and (iii) onshore investment by and through any other means. Foreign investment in
    certain key areas with national security concerns, such as important cultural products and services, important information technology
    and Internet products and services, key technologies and others which results in the acquisition of de facto control of invested
    companies, shall be filed with a specifically established office before such investment is carried out. What may constitute &#8220;onshore
    investment by and through any other means&#8221; or &#8220;de facto control&#8221; is not clearly defined under such measures, and
    could be broadly interpreted. It is likely that control through contractual arrangement be regarded as de facto control based on
    provisions applied to security review of foreign investment. Failure to make such filing may subject such foreign investor to rectification
    within a prescribed period, and the foreign investor will be negatively recorded in the relevant national credit information system,
    which would then subject such investor to joint punishment as provided by relevant rules. If such investor fails to or refuses to
    undertake such rectification, it would be ordered to dispose of the equity or asset and to take any other necessary measures so as
    to return to the status quo and to erase the impact to national security.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Protection of Minors and Real-Name Registration System</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the PRC Minors Protection Law (2020 Revision) which became effective on June 1, 2021, providers of network products and services may
not provide minors with products or services that induce addictive usage. Providers of network services such as online games, network
livestreaming, network audio and video, and social networking shall set up corresponding time management, authority management, consumption
management and other functions for minors who use their services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, pursuant to the Internet Livestreaming Services Provisions, livestreaming service providers should verify the identity of users
on a livestreaming platform with their information such as through their mobile phone number. Also, according to the Administrative Measures
for Business Activities of Online Performances issued by Ministry of Culture on December 2, 2016 and in effect as of January 1, 2017,
livestreaming service providers must require streamers on a livestreaming platform to make real-name registration.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 29, 2021, the Ministry of Culture and Tourism issued the Opinions of the General Office of the Ministry of Culture and Tourism
on Strengthening the Protection of Minors in Online Cultural Markets, which reiterates the necessity of comprehensive governance in the
field of culture and entertainment and the importance of network protection of minors. Pursuant to the opinions, (i) online cultural
service provider shall improve the ability to identify the accounts of users who are minors; (ii) online cultural service providers shall
not provide registration services for livestreaming publisher accounts for minors under the age of 16 and shall obtain prior consent
from the guardians of the users under age of 16-18 before providing account registration services to them; (iii) online cultural service
providers shall strictly protect personal information and take necessary measures in a timely manner to stop the cyberbullying and prevent
the spread of relevant information upon receiving notification from a minor who has been cyberbullying or his/her parents or other guardians;
(iv) online cultural service providers shall block harmful content to minors and prohibit live broadcast rooms from luring minors to
access harmful contents by displaying vulgar pictures, suggestive messages and private contact information such as phone numbers, WeChat
numbers and QR codes; (v) solo appearances of minors or appearances by adults of more than a certain duration and recognized as using
minors to accumulate popularity and profit by live rooms or short video accounts, or accounts that take the use of child models to attract
attention or profit from goods shall be seriously punished; (iv) online cultural service providers shall set up protection mechanisms
such as password lock, time lock, consumption limit, behavior tracking and uninstall and reinstall inheritance (anti-bypass) for minor-aged
users, to prevent loopholes such as theft, fraudulent use and borrowed accounts in time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
on Online Music</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 20, 2006, the Ministry of Culture issued the Several Opinions of the Ministry of Culture on the Development and Administration
of Online Music, or the Online Music Opinions, which became effective on the same date. The Online Music Opinions provide that, among
other things, an Internet music service provider must obtain an Internet Culture Operation License. On October 23, 2015, the Ministry
of Culture promulgated the Circular on Further Strengthening and Improving the Content Administration of Online Music, effective as of
January 1, 2016, which provides that Internet culture operating entities shall report to a nationwide administrative platform the details
of its self-monitoring activities on a quarterly basis.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 20, 2006, the Ministry of Culture issued the Several Opinions of the Ministry of Culture on the Development and Administration
of Online Music, or the Online Music Opinions, which became effective on the same date. The Online Music Opinions provide that, among
other things, an Internet music service provider must obtain an Internet Culture Operation License. On October 23, 2015, the Ministry
of Culture promulgated the Circular on Further Strengthening and Improving the Content Administration of Online Music, effective as of
January 1, 2016, which provides that Internet culture operating entities shall report to a nationwide administrative platform the details
of its self-monitoring activities on a quarterly basis.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
2010 and 2011, the Ministry of Culture greatly intensified its regulations on online music products by issuing a series of circulars
regarding online music industry, such as the Circular on Regulating the Market Order of Online Music Products and Renovating Illegal
Conducts of Online Music Websites and the Circular on Investigating Illegal Online Music Websites in 2010. In addition, the Ministry
of Culture issued the Circular on Clearing Illegal Online Music Products, which clarified that entities engaging in any of the following
conducts will be subject to relevant penalties or sanctions imposed by the Ministry of Culture: (i) providing online music products or
relevant services without obtaining corresponding qualifications; importing online music products that have not been reviewed by the
Ministry of Culture; or (iii) providing domestically developed online music products that have not been filed with the Ministry of Culture.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 8, 2015, the National Copyright Administration issued the Circular regarding Ceasing Transmitting Unauthorized Music Products by
Online Music Service Providers, which requires that (i) all unauthorized music products on the platforms of online music services providers
shall be removed prior to July 31, 2015, and (ii) the National Copyright Administration investigate and punish the online music services
providers who continue to transmit unauthorized music products following July 31, 2015.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Advertising Business</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
SAMR (formerly known as State Administration of Industry and Commerce) is the primary governmental authority regulating advertising activities
in China. Regulations that apply to the advertising business primarily include (i) the PRC Advertisement Law, promulgated by the SCNPC
on October 27, 1994 and most recently amended on April 29, 2021, and (ii) the Administrative Regulations for Advertising, promulgated
by the State Council on October 26, 1987 and which has been effective since December 1, 1987.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the above regulations, companies that engage in advertising activities must obtain, from the SAMR or its local branches, a business
license, which specifically includes operating an advertising business in its business scope. Enterprises engaged in the advertising
business with such advertising business in its business scope do not need to apply for an advertising operation license, but such enterprise
cannot be a radio station, a television station, a newspaper and magazine publishing house or any entity otherwise specified in the relevant
laws or administrative regulations. The business license of an advertising company is valid for the duration of its existence, unless
the license is suspended or revoked due to a violation of any relevant laws or regulations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">PRC
advertising laws and regulations set certain content requirements for advertisements in China, including, among other things, prohibitions
on false or misleading content, misleading wording, (or) excess wordiness, socially destabilizing content or content involving obscenities,
superstition, violence, discrimination or infringement of the public interest. Advertisers, advertising agencies and advertising distributors
are required to ensure that the content of the advertisements they prepare or distribute is true and in complete compliance with applicable
laws. In providing advertising services, advertising operators and advertising distributors must review supporting documents provided
by advertisers for advertisements and verify that the content of the advertisements complies with applicable PRC laws and regulations.
Prior to distributing advertisements that are subject to government censorship and approval, advertising distributors are obligated to
confirm that such censorship has been performed and approval has been obtained. Violation of these regulations may result in penalties,
including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement
correcting the misleading information. Where serious violations occur, the SAMR or its local branches may revoke such offenders&#8217;
licenses or permits for their advertising business operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 4, 2016, the SAMR issued the Interim Measures for the Administration of Internet Advertising, or the Internet Advertising Measures,
which became effective on September 1, 2016. According to the Internet Advertising Measures, Internet Advertising refers to commercial
advertising for direct or indirect marketing goods or services in the form of text, image, audio, video, or other means through websites,
web pages, Internet apps, or other Internet media. The Internet Advertising Measures specifically set out the following requirements:
(i) advertisements must be identifiable and marked with the word &#8220;advertisement&#8221; enabling consumers to distinguish them from
non-advertisement information; (ii) sponsored search results must be clearly distinguished from organic search results; (iii) it is forbidden
to send advertisements or advertisement links by email without the recipient&#8217;s permission or induce Internet users to click on
an advertisement in a deceptive manner; and (iv) Internet information service providers that do not participate in the operation of Internet
advertisements must stop publishing illegal advertisements if they have known or should know that the advertisements are illegal.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 9, 2020, the SAMR promulgated the Notice on the issuance of the &#8220;Key Points of the Inter-Ministry Joint Conference on Rectifying
False and Illegal Advertising in 2020&#8221; and the &#8220;Work System of the Inter-Ministry Joint Conference on Rectifying False and
Illegal Advertising.&#8221; According to the above regulations, the SAMR will study and strengthen the supervision of emerging advertising
formats, especially key platforms and key media, and supervise Internet platforms to consciously fulfill their legal obligations and
responsibilities to verify relevant certification documents and advertising contents, as well as avoiding publishing false and illegal
advertisements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
November 26, 2021, the SAMR published the Draft Administrative Measures on Internet Advertising for public comment, or the Draft Measures
on Internet Advertising, which requires that users should be able to close pop-up advertisements using one button and provide that the
pop-up advertisements shall not contain a countdown timer or require more than one click to close and shall not pop up more than once
on the same page. In addition, the Draft Measures on Internet Advertising provides that internet advertising operators and distributers
shall establish a system for registering and reviewing advertisers and advertisements and verify and update such system on a regular
basis. Platform operators that provide internet information services are required to inspect the content of advertisements displayed
and published by using their information services and cooperate with market supervision administration authorities to inspect advertisements
and provide information and evidence on alleged illegal advertisements requested by such authorities. The Draft Measures on Internet
Advertising also provides that advertising via livestreaming is subject to the new rules. Further, the Draft Measures prohibits internet
operators from publishing advertisement on after-school training for primary school and middle school students and kindergarteners and
prohibits advertisements for certain items on internet media that targets minors, including, among others, advertisements related to
online games that are harmful to the physical or mental health of minors, cosmetics, alcohol or beauty.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulation
on Tax</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
March 23, 2016, the Ministry of Finance and the SAT issued the Notice of Taxation on Implementing the Pilot Program of Replacing Business
Tax with Value-Added Tax in an All-round Manner, pursuant to which the pilot plan for the replacement of business tax with VAT was expanded
to all regions and industries as of May 1, 2016.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC enterprise income tax is calculated based on the taxable income determined under the PRC Enterprise Income Tax Law and its implementation
rules. On March 16, 2007, the National People&#8217;s Congress of China enacted the PRC Enterprise Income Tax Law, which became effective
on January 1, 2008 and was subsequently amended on February 24, 2017 and December 29, 2018. On December 6, 2007, the State Council promulgated
the implementation rules to the PRC Enterprise Income Tax Law, which was effective in 2008 and was amended in 2019.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the PRC Enterprise Income Tax Law, an enterprise established outside China with &#8220;de facto management bodies&#8221; within China
is considered a &#8220;resident enterprise&#8221; for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise
income tax rate on its worldwide income. A circular issued by the State Taxation Administration in April 2009 and amended in 2017 regarding
the standards used to classify certain Chinese invested enterprises controlled by Chinese enterprises or Chinese enterprise groups and
established outside of China as &#8220;resident enterprises,&#8221; or the SAT Circular 82, clarified that dividends and other income
paid by such PRC &#8220;resident enterprises&#8221; will be considered PRC source income and subject to PRC withholding tax, currently
at a rate of 10% when paid to non PRC enterprise shareholders. This circular also subjects such PRC &#8220;resident enterprises&#8221;
to various reporting requirements with the PRC tax authorities. Under the implementation regulations to the PRC Enterprise Income Tax
Law, a &#8220;de facto management body&#8221; is defined as a body that has material and overall management and control over the manufacturing
and business operations, personnel and human resources, finances and properties of an enterprise. On July 27, 2011, the SAT issued the
Administrative Measures of Enterprise Income Tax of Chinese-Controlled Offshore Incorporated Resident Enterprises (Trial), or SAT Bulletin
45, which became effective on September 1, 2011. Such administrative measures further provide guidance on residence status determination
and post-determination administration as well as the relevant procedures for competent tax authorities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the SAT Circular 82 and SAT Bulletin 45, a Chinese-controlled offshore-incorporated enterprise will be regarded as a PRC tax resident
by virtue of having its &#8220;de facto management body&#8221; in China and will be subject to PRC enterprise income tax on its global
income only if all of the following conditions set forth in Circular 82 are met: (i) the primary location of the day-to-day operational
management is in the PRC; (ii) decisions relating to the enterprise&#8217;s financial and human resource matters are made or are subject
to approval by organizations or personnel in the PRC; (iii) the enterprise&#8217;s primary assets, accounting books and records, company
seals and board and shareholder resolutions are located or maintained in the PRC; and (iv) 50% or more of voting board members or senior
executives habitually reside in the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
do not meet all of the conditions set forth in SAT Circular 82. Therefore, we believe that we should not be treated as a &#8220;resident
enterprise&#8221; for PRC tax purposes even if the standards for &#8220;de facto management body&#8221; prescribed in the SAT Circular
82 are applied to us. For example, certain of our minutes and files of the resolutions of our board of directors and the resolutions
of our shareholders are maintained outside the PRC. However, it is possible that the PRC tax authorities may take a different view. See
&#8220;Item 3. Key Information&#8212;3.D. Risk Factors&#8212;Risks Related to Doing Business in China&#8212;Under the PRC enterprise
income tax law, we may be classified as a PRC &#8220;resident enterprise,&#8221; which could result in unfavorable tax consequences to
us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 3, 2015, the SAT issued the Notice on Several Issues Concerning Enterprise Income Tax for Indirect Assets Transfer by Non-PRC
Resident Enterprises, as amended in 2017, or SAT Circular 7. Pursuant to SAT Circular 7, an &#8220;indirect transfer&#8221; of assets,
including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be recharacterized and treated as a direct
transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose
of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax. When determining whether there is a &#8220;reasonable commercial purpose&#8221; of the transaction arrangement, features
to be taken into consideration include, inter alia, whether the main value of the equity interest of the relevant offshore enterprise
derives directly or indirectly from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct
or indirect investment in China or if its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries
directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure.
According to SAT Circular 7, where the payor fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to
the tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest.
SAT Circular 7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired
on a public stock exchange. On October 17, 2017, the SAT issued the Circular on Issues of Tax Withholding of Income Tax of Non-resident
Enterprise at Source, or SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting
and payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation
and application of SAT Circular 7. SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions
or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
PRC resident enterprise which distributes dividends to its non-PRC shareholders should withhold PRC income tax at a rate of 10% according
to PRC law. However, pursuant to the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of
Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, if the beneficial owner of the dividends is a Hong
Kong resident enterprise, which directly holds at least 25% of the equity interest of the aforesaid enterprise (i.e., the dividend distributor),
the tax levied shall be 5% of the distributed dividends. Meanwhile, the Announcement of the State Administration of Taxation on Issues
Relating to &#8220;Beneficial Owner&#8221; in Tax Treaties has stipulated some factors that are unfavorable to the determination of &#8220;beneficial
owner,&#8221; particularly in the case of holding companies.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, pursuant to the Circular of the State Taxation Administration on Relevant Issues Relating to the Implementation of Dividend
Clauses in Tax Treaties, which was issued by the SAT on February 20, 2009, for a tax resident of the counterparty to the tax treaty to
be entitled to such tax treatment specified in the tax treaty for with respect to the dividends paid to it by a Chinese resident company,
all of the following requirements should be satisfied: (i) the tax resident who obtains dividends should be a company as provided in
the tax treaty; (ii) the equity interests and the voting shares of the Chinese resident company directly owned by such tax resident is
at least a specified percentage; and (iii) the capital ratio of the Chinese resident company directly owned by such tax resident is at
least the percentage specified in the tax treaty at any time within 12 months prior to acquiring the dividends.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Labor and Social Insurance</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
principal laws that govern employment include (i) the PRC Labor Law, promulgated by the SCNPC on July 5, 1994, which has been effective
since January 1, 1995 and most recently amended on December 29, 2018, and (ii) the PRC Labor Contract Law, promulgated by the SCNPC on
June 29, 2007 and amended on December 28, 2012.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the PRC Labor Law and the PRC Labor Contract Law, employers must execute written labor contracts with full-time employees. All employers
must compensate their employees with wages equal to at least the local minimum wage standards. All employers are required to establish
a system for labor safety and sanitation, strictly comply with state rules and standards and provide employees with workplace safety
training. Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative
penalties. For serious violations, criminal liability may arise.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, an employer is obligated to sign an indefinite term labor contract with an employee if the employer continues to employ the
employee after two consecutive fixed term labor contracts. The employer also has to pay compensation to the employee if the employer
terminates an indefinite term labor contract. Moreover, employers in China are required to provide employees with welfare schemes covering
pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to the PRC Social Insurance Law promulgated by the National People&#8217;s Congress of the PRC on October 28, 2010, effective since July
1, 2011 and amended on December 29, 2018, together with other relevant laws and regulations, an employer that fails to make social insurance
contributions may be ordered to pay the required contributions within a stipulated deadline and be subject to a late fee. If the employer
still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine
ranging from one to three times the amount overdue. According to the Regulations on Administration of Housing Fund promulgated by the
State Council on April 3, 1999 and amended in 2002 and 2019 respectively, an enterprise that fails to make housing fund contributions
may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application
may be made to a local court for compulsory enforcement.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to Anti-monopoly Matters related to Internet Platform Companies</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
PRC Anti-monopoly Law, which took effect on August 1, 2008, prohibits monopolistic conduct such as entering into monopoly agreements,
abusing market dominance and concentration of undertakings that may have the effect of eliminating or restricting competition. The PRC
Anti-monopoly Law requires that the anti-monopoly law enforcement agency be notified in advance of any transaction where the parties&#8217;
turnover in the China market and/or global market exceed certain thresholds and the buyer would obtain control of, or decisive influence
over, the target as a result of the business combination. As further clarified by the Provisions of the State Council on the Threshold
of Filings for Undertaking Concentrations issued by the State Council in 2008 and amended in September 2018, such thresholds include
(i) the total global turnover of all operators participating in the transaction exceeds RMB10 billion in the preceding fiscal year and
at least two of these operators each had a turnover of more than RMB400 million within China in the preceding fiscal year, or (ii) the
total turnover within China of all the operators participating in the transaction exceeded.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">RMB2
billion in the preceding fiscal year, and at least two of those operators that had a turnover of more than RMB400 million within China
in the preceding fiscal year. There are numerous factors the Anti-monopoly law enforcement agency considers in determining &#8220;control&#8221;
or &#8220;decisive influence,&#8221; and, depending on certain criteria, the Anti-monopoly law enforcement agency may conduct Anti-monopoly
review of transactions in respect of which it was notified.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
October 23, 2021, the SCNPC issued a discussion draft of the amended Anti-monopoly Law, which proposes that the relevant authority shall
investigate a transaction where there is any evidence that the concentration has or may have the effect of eliminating or restricting
competitions, even if such concentration does not reach the filing threshold.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
September 11, 2020, the SAMR issued the Anti-monopoly Compliance Guideline for Operators, which requires, under the PRC Anti-monopoly
Law, operators to establish Anti-monopoly compliance management systems to prevent Anti-monopoly compliance risks.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 7, 2021, the Anti-monopoly Bureau of the State Council officially promulgated the Guidelines to Anti-monopoly in the Field of
Internet Platforms, or the Anti-monopoly Guidelines on Platform Economies. Pursuant to an official interpretation from the Anti-monopoly
Bureau of the State Council, the Anti-monopoly Guidelines on Platform Economies mainly covers five aspects, including general provisions,
monopoly agreements, abusing market dominance, concentration of undertakings, and abusing of administrative powers eliminating or restricting
competition. The Anti-monopoly Guidelines on Platform Economies prohibits certain monopolistic acts of Internet platforms so as to protect
market competition and safeguard interests of users and undertakings participating in Internet platform economy, including without limitation,
prohibiting platforms with dominant position from abusing their market dominance (such as discriminating customers in terms of pricing
and other transactional conditions using big data and analytics, coercing counterparties into exclusivity arrangements, using technology
means to block competitors&#8217; interface, favorable positioning in search results of goods displays, using bundle services to sell
services or products, compulsory collection of users&#8217; unnecessary data). In addition, the Anti-monopoly Guidelines on Platform
Economies also reinforces antitrust merger review for Internet platform related transactions to safeguard market competition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 17, 2021, the SAMR issued the Provisions on Preventing Online Unfair Competition (Draft for Public Comments), or the Draft Provisions
on Preventing Online Unfair Competition, which aims to regulate the unfair competition behaviors of business operators through Internet
and other information networks. The Draft Provisions on Preventing Online Unfair Competition provides, among others, business operators
should not use any technical means to impede, interfere or conduct unfair competition behaviors.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Regulations
Relating to M&amp;A and Overseas Listings</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 8, 2006, six PRC governmental agencies jointly promulgated the Regulations on Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors, or the M&amp;A Rules, which became effective on September 8, 2006, and were amended on June 22, 2009. The M&amp;A
Rules require offshore special purpose vehicles formed to pursue overseas listing of equity interests in PRC companies and controlled
directly or indirectly by PRC companies or individuals to obtain the approval of the China Securities Regulatory Commission, or the CSRC,
prior to the listing and trading of such special purpose vehicle&#8217;s securities on any stock exchange overseas. The M&amp;A Rules
also establish procedures and requirements that could make some acquisitions of PRC companies by foreign investors more time consuming
and complex, including requirements in some instances that the Anti-monopoly law enforcement agency be notified in advance of any change-of-control
transaction in which a foreign investor takes control of a PRC domestic enterprise.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors
issued by the Ministry of Commerce in 2011 specify that mergers and acquisitions by foreign investors that raise &#8220;national defense
and security&#8221; concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic
enterprises and that raise &#8220;national security&#8221; concerns are subject to strict review by the Ministry of Commerce, and prohibit
any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control
arrangement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
July 6, 2021, the General Office of the State Council and General Office of the Central Committee of the Communist Party of China issued
Opinions on Strictly Cracking Down Illegal Securities Activities in accordance with the Law. The opinions emphasized the need to strengthen
the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed
to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced
by China-based overseas-listed companies.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises,
or the Trial Measures, which will become effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules
No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic
Enterprises and relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC&#8217;s official
website. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic principles of the Draft Administrative
Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing
by domestic enterprises. Under the Trial Measures and the Guidance Rules and Notice, domestic enterprises conducting overseas securities
offering and listing, either directly or indirectly, shall complete filings with the CSRC pursuant to the Trial Measures&#8217; requirements
within three working days following the submission of an application for initial public offering or listing. Starting from March 31,
2023, enterprises that have been listed overseas or satisfy all of the following conditions shall be deemed as &#8220;Grandfathered Issuers&#8221;
and are not required to complete the overseas listing filing immediately, but shall complete filings as required if they conduct refinancing
or are involved in other circumstances that require filing with the CSRC: (i) the application for indirect overseas offering or listing
shall have been approved by the relevant overseas regulatory authority or stock exchange prior to March 31, 2023 (as the SEC does not
approve or disapprove of an offering, this requirement is interpreted to be the SEC&#8217;s declaration of the registration statement
to be effective with respect to this offering), (ii) the enterprise is not required to reapply for the approval of the relevant overseas
regulatory authority or stock exchange, and (iii) such overseas securities offering or listing shall be completed before September 30,
2023. Starting from March 31, 2023, domestic enterprises that have submitted valid applications for overseas offerings and listing but
have not obtained the approval from relevant overseas regulatory authority or overseas stock exchange shall complete filings with the
CSRC prior to their overseas offering and listings. The Company shall be subject to filling in CSRC for its issuance of new securities
in the same overseas public market or being listed in other public markets for its offerings. The Trial Measures and other relevant regulations
or rules may be published by CSRC and other governmental authorities subsequently, if any, may also ask for high requirements or put
restrictions and even prohibitions against the Company&#8217;s further financing and actions for issuance of new securities.</span></p><div>

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</div><div><a id="b_015"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Organizational Structure</b></span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a British Virgin Islands holding company and conduct our operations in the People&#8217;s Republic of China (the &#8220;PRC&#8221;)
through contractual arrangements with the VIEs, including Zhihui Qiyuan and Sixiang Qiyuan and their subsidiaries, and through our WFOEs
and the wholly owned subsidiaries of WFOEs. Through our Hong Kong subsidiary Scienjoy International Limited, we own a direct equity interest
in our WFOEs, including WXBJ and WXZJ. WXBJ, Zhihui Qiyuan and Zhihui Qiyuan&#8217;s registered shareholders are parties to the VIE agreements,
pursuant to which the profits of Zhihui Qiyuan and its subsidiaries, each such company formed under PRC Laws, are directly or indirectly
payable to WXBJ. WXZJ, Sixiang Qiyuan and Sixiang Qiyuan&#8217;s registered shareholders are parties to the VIE agreements, pursuant
to which the profits of Sixiang Qiyuan and its subsidiaries, each such company formed under PRC Laws, are directly or indirectly payable
to WXZJ. Any failure by any of the VIEs or their respective shareholders to perform their obligations under these contractual arrangements,
would have a material adverse effect on our business. <i>See &#8220;Risk Factors&#8212;Risks Related to Our Corporate Structure.&#8221;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following diagram depicts our current organizational structure. Unless otherwise indicated, equity interests depicted in this diagram
are held 100%. The relationship between WXBJ, Zhihui Qiyuan, and the relationship between WXZJ and Sixiang Qiyuan is each governed by
contractual arrangements and does not constitute equity ownership.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s current organizational structure and the VIEs&#8217; current organizational structure are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_008.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Contractual
Arrangements among WFOEs, the VIEs and the Shareholders of the VIEs</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Current
PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication
services, and certain other business. We are a company registered in the British Virgin Islands. To comply with PRC laws and regulations,
we primarily conduct our business in China through (i) our PRC subsidiaries and (ii) the VIEs based on a series of contractual arrangements
by and among the WFOEs, the VIEs and the shareholders of the VIEs. We have evaluated the guidance in FASB ASC 810 and concluded that
we are the primary beneficiary of the VIEs because of these contractual arrangements. Accordingly, under U.S. GAAP, the financial statements
of the VIEs are consolidated as part of our financial statements. The following is a summary of all the VIE arrangements that enable
us to receive substantially all of the economic benefits from the VIEs&#8217; operations and be the primary beneficiary of the VIEs for
accounting purposes.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contracts
between the Company and the Zhihui Qiyuan VIEs</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Exclusive
Option Agreement.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the exclusive option agreement (including its amendment or supplementary agreements, if any) amongst WXBJ (our WFOE), Zhihui Qiyuan
and the registered shareholders who collectively owned all of Zhihui Qiyuan, the registered shareholders irrevocably granted WXBJ or
its designated party, an exclusive option to purchase all or part of the equity interests held by the registered shareholders in Zhihui
Qiyuan, when and to the extent permitted under PRC law, at an amount equal to the lowest permissible purchase price as set by PRC law.
Zhihui Qiyuan cannot declare any profit distributions, or create any encumbrances in any form without the prior written consent of WXBJ.
The registered shareholders must remit in full any funds received from Zhihui Qiyuan to WXBJ, in the event any distributions are made
by the VIE pursuant to any written consents of WXBJ.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Exclusive Option Agreement shall remain effective for twenty (20) years and shall be automatically extended for an additional period
of one (1) year. The additional period automatically enters the renewal extension of one (1) year at the end of each extended additional
period. WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days&#8217; prior termination notice.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Power
of Attorney Agreements.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Each
registered shareholders of Zhihui Qiyuan entered into a power of attorney agreement (including its amendment or supplementary agreements,
if any) whereby such registered shareholders granted an irrevocable proxy of the voting rights underlying their respective equity interests
in Zhihui Qiyuan to WXBJ, which includes, but are not limited to, all the shareholders&#8217; rights and voting rights empowered to such
registered shareholders by the PRC company law and Zhihui Qiyuan&#8217;s Article of Association. The power of attorney remains irrevocable
and continuously valid from the date of execution so long as each such shareholder remains as a shareholder of Zhihui Qiyuan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Share
Pledge Agreement.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the share pledge agreement (including its amendment or supplementary agreements, if any) among WXBJ, Zhihui Qiyuan and the registered
shareholders of Zhihui Qiyuan, such registered shareholders have pledged all their equity interests in Zhihui Qiyuan to guarantee the
respective performance of Zhihui Qiyuan and such shareholders obligations under the Exclusive Option Agreement, Exclusive Business Cooperation
Agreement and Power of Attorney Agreement, as applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
Zhihui Qiyuan or any of its shareholders breaches its contractual obligations under any of other VIE agreements, WXBJ, as pledgee, will
be entitled to certain rights, including the right to sell the pledged equity interests. The registered shareholders of Zhihui Qiyuan
agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in Zhihui Qiyuan without
the prior written consent of WXBJ. The Share Pledge Agreement shall be continuously valid until all obligations under the VIE agreements
have been fulfilled, or the VIE agreements are terminated, or the secured debts has been fully executed. &#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contracts
that enable us to receive substantially all of the economic benefits from the Zhihui Qiyuan VIEs</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Exclusive
Business Cooperation Agreements</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the exclusive business cooperation agreement (including its amendment or supplementary agreements, if any) between WXBJ and Zhihui
Qiyuan, WXBJ is to provide exclusive business support, technical and consulting services related to all technologies needed for its business
in return for fees. The service fees may be adjusted by WXBJ based on the following factors:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">complexity and difficulty
    of the services pursuant to the business cooperation agreement to Zhihui Qiyuan during the month (the &#8220;Monthly Services&#8221;);
    </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number of WXBJ&#8217;s
    employees who provided the Monthly Services and the qualifications of the employees; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number of hours WXBJ&#8217;s
    employees spent to provide the Monthly Services; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">nature and value of the
    Monthly Services; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">market reference price;
    and </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhihui Qiyuan&#8217;s operating
    conditions for the month. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
term of the Exclusive Business Cooperation Agreement is twenty (20) years and shall be automatically extended for an additional period
of one (1) year. The additional period automatically enters the renewal extension of one (1) year at the end of each extended additional
period. Besides, WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days&#8217; prior termination
notice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 93; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->84<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Based
on the foregoing VIE arrangements, which obligate WXBJ to absorb all of the risk of loss from their activities and enable WXBJ to receive
all of their expected residual returns, the Company accounts for Zhihui Qiyuan as a VIE. Accordingly, the Company consolidates the accounts
of Zhihui Qiyuan for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission
(&#8220;SEC&#8221;) and Accounting Standards Codification (&#8220;ASC&#8221;) 810-10, Consolidation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contractual
Arrangements among WXZJ, Sixiang Qiyuan, and the Shareholders of Sixiang Qiyuan.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Exclusive
Option Agreement. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the exclusive option agreement (including any supplementary agreement thereto, if any) entered into by and among WXZJ, Sixiang Qiyuan
and all the shareholders of Sixiang Qiyuan, the shareholders of Sixiang Qiyuan hereby irrevocably grant to WXZJ or its designee, to the
extent permitted by the laws of the People&#8217;s Republic of China, the exclusive right to purchase all or part of the equity interest
held by such shareholders at the lowest purchase price permitted by the laws of the People&#8217;s Republic of China. Without the written
consent of WXZJ, Sixiang Qiyuan may not distribute any profits or create any encumbrance in any manner. If Sixiang Qiyuan makes the profit
distribution with WXZJ&#8217;s written consent, Sixiang Qiyuan&#8217;s shareholders shall pay all of any funds received by them to WXZJ.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
term of the exclusive option agreement is twenty years and will be automatically renewed for one year. Upon the expiration of each renewed
term, the exclusive option agreement will be automatically renewed for one year. In the meantime, WXZJ shall have the right to terminate
the exclusive option agreement at any time by giving a three days&#8217; prior notice. &#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Power
of Attorney Agreements. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">WXZJ
has entered into a power of attorney agreement (the &#8220;Power of Attorney,&#8221; including any supplementary agreements, if any)
with each shareholder of Sixiang Qiyuan, pursuant to which each such shareholder grants the proxy rights to WXZJ in connection with his
equity interest in Sixiang Qiyuan, including, without limitation, all the shareholders&#8217; beneficial rights and voting rights conferred
by the Company Law of the People&#8217;s Republic of China and the Articles of Association of Sixiang Qiyuan. Each power of attorney
agreement shall be irrevocable from the date of execution and shall continue to be valid until the relevant shareholder no longer holds
Sixiang Qiyuan&#8217;s equity interest.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Share
Pledge Agreement. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the share pledge contract (including any supplementary agreement thereto, if any) entered into by and among WXZJ, Sixiang Qiyuan and
each of the shareholders of Sixiang Qiyuan, each shareholder of Sixiang Qiyuan has pledged all of Sixiang Qiyuan&#8217;s equity interest
held by such shareholder to guarantee the respective performance of Sixiang Qiyuan and such shareholder under the exclusive option contract,
the exclusive business cooperation agreement and the power of attorney agreement, as applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
Sixiang Qiyuan or any of its shareholders breaches its contractual obligations under any VIE agreements, WXZJ, as the pledgee, will have
certain rights, including the sale of the pledged equity interest. The shareholders agree that, without the prior written consent of
WXZJ, they shall not transfer, sell, pledge, dispose of or in any other manner create any new encumbrance upon their equity interest
in Sixiang Qiyuan. The share pledge agreement shall remain effective until all obligations under the VIE agreements have been performed,
or the VIE agreements have been terminated, or all obligations under the VIE agreements have been fully performed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contracts
that enable us to receive substantially all of the economic benefits from the Sixiang Qiyuan VIEs</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Exclusive
Business Cooperation Agreement</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
accordance with the exclusive business cooperation agreement between WXZJ and Sixiang Qiyuan (including supplementary agreements thereto,
if any), WXZJ will provide Sixiang Qiyuan with exclusive business support and all business-related technologies and consulting services
in order to obtain the fees equal to the consolidated net income of Xiuli (Zhejiang) Culture Tech Co., Ltd., Leku (Zhejiang) Culture
Tech Co., Ltd., Haifan (Zhejiang) Culture Tech Co., Ltd., Xiangfeng (Zhejiang) Culture Tech Co., Ltd. and Hongren (Zhejiang) Culture
Tech Co., Ltd. after deducting losses of the previous year (if any). WXZJ may adjust the service fees according to the following factors:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quarterly based on the
    complexity and difficulty of the services provided pursuant to the exclusive business cooperation agreement during such quarter (&#8220;Quarterly
    Services&#8221;); </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number of WXZJ&#8217;s
    employees who provided the Quarterly Services and the qualifications of these employees; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The number of hours WXZJ&#8217;s
    employees spent to provide the Quarterly Services; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The nature and value of
    the Quarterly Services; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;market reference
    price; and </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sixiang Qiyuan&#8217;s
    operating conditions. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->85<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
term of the exclusive business cooperation agreement is twenty years and is automatically renewable for one year. Upon the expiration
of each renewal term, the agreement can be automatically renewed for one year. In addition, WXZJ shall have the right to terminate this
agreement at any time by giving a three-day notice on the termination of this Agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have been advised by Beijing Feng Yu Law Firm (&#21271;&#20140;&#38155;&#26161;&#24459;&#24072;&#20107;&#21153;&#25152;) (&#8220;Feng
Yu Law Firm&#8221;), our PRC legal counsel:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">based on its understanding
    of the relevant laws and regulations, is of the opinion that, subject to the judicial interpretations of the PRC laws or legislative
    interpretation of the PRC laws by PRC government authority, each of the VIE contracts among WXBJ, Zhihui Qiyuan and its registered
    shareholders is valid, binding and enforceable in accordance with its terms and does not violate current effective applicable PRC
    Laws. </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">based on its understanding
    of the relevant laws and regulations, is of the opinion that, subject to the judicial interpretations of the PRC laws or legislative
    interpretation of the PRC laws by PRC government authority, each of the VIE contracts among WXZJ, Sixiang Qiyuan and its registered
    shareholders is valid, binding and enforceable in accordance with its terms and does not violate current effective applicable PRC
    Laws. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">However,
our PRC legal counsel has advised that there are substantial uncertainties regarding the interpretation and application of current and
future PRC laws, rules and regulations. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to
the opinion of our PRC legal counsel. Our PRC legal counsel has further advised that if the PRC government finds that the agreements
that establish the structure for operating our Internet related value-added business do not comply with PRC government restrictions on
foreign investment in the aforesaid business we and the VIEs engage in, we and the VIEs could be subject to severe penalties including
being prohibited from continuing operations. See <i>&#8220;Risk Factors&#8212;Risks Factors Related to Our Corporate Structure.&#8221;
See &#8220;Risk Factors&#8212;Risk Factors Related to Doing Business in China.&#8221;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_016"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Property, Plants and
    Equipment</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
principal executive offices are located at RM 1118, 11<sup>th</sup> Floor, Building 3, No. 99 Wangzhou Rd., Liangzhu St., Yuhang District,
Hangzhou, Zhejiang Province, 311113,&#160;China, where we lease approximately 6,764 square meters of office space as of the date of this
report. We and our subsidiaries also lease an additional approximately 2,600 square meters of office space in Beijing and Xinjiang Uyghur
Autonomous Region, P.R. China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
4A. UNRESOLVED STAFF COMMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><div><a id="b_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>You
should read the following discussion and analysis of our financial condition and results of operations in conjunction with our combined
financial statements and consolidated financial statements and the related notes included in this annual report. This discussion contains
forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially
from those anticipated in these forward-looking statements as a result of various factors, including those set forth under &#8220;Risk
Factors&#8221; and elsewhere in this annual report.</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_019"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Operating Results</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Overview</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
were originally incorporated on May 2, 2018 as a British Virgin Islands exempted company for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On May 7, 2020,
we consummated the acquisition of Scienjoy Inc. As a result of the business combination, we became the holding company of Scienjoy Inc.
and we changed our name from &#8220;Wealthbridge Acquisition Limited&#8221; to &#8220;Scienjoy Holding Corporation.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a leading provider of mobile entertainment live streaming platforms in China and operates its platforms on both PC and mobile apps,
through which users can enjoy immersive and interactive entertainment live streaming. We had approximately 320.2 million registered users
by the end of December 31, 2022, increased from 267.1 million registered users for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
adopt a multi-platform strategy and all platforms are categorized as &#8220;SHOW live streaming&#8221; in which professional broadcasters
provide live streaming entertainment for users primarily in the form of performances (such as singing, dancing, and talk shows). Broadcasters
on all platforms have been professionally trained by relevant broadcaster agents to provide more professional content. Despite the similarity
in contents, the different platforms adopt different operation strategies, such as, to name a few, different broadcaster policy, events,
promotion, and games. We provide a technological infrastructure to enable broadcasters, online users and viewers to interact with each
other during live streaming. All platforms can be accessed for free. We mainly derive our revenue from sales of virtual items on the
platforms. Users can purchase virtual currency to purchase virtual items for use on the platforms. Users can recharge their virtual currency
on the platforms through various online third-party payment platforms, such as WeChat Pay or AliPay.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 10, 2020, we signed an Equity Acquisition Framework Agreement (the &#8220;BeeLive Acquisition Agreement&#8221;) with Sciscape
International Limited, Tianjin Guangju Dingfei Technology Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co.,
Ltd. Pursuant to the BeeLive Acquisition Agreement, we, through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International
Limited which holds the platform BeeLive International and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest
in Tianjin Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required
to pay (i) a cash consideration of RMB50.0 million and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class
A ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions and
requirements over the following three years. On August 21, 2020, all target shares were transferred to the parties designated in BeeLive
Acquisition Agreement. On September 10, 2020, we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology
Co., Ltd. and issued 3,786,719 Class A Ordinary Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently
changed its name to Sixiang Mifeng (Tianjin) Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.
BeeLive is a global live streaming platform that initially launched in China in November 2016. During the second half of 2019, BeeLive
began expanding into international markets. To date, BeeLive International offers Arabic language live streaming product in the Middle
East and Thai language live streaming product in Southeast Asia.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the &#8220;Framework Agreement&#8221;)
with Golden Shield Enterprises Limited (&#8220;Golden Shield&#8221;), Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;,
together with Golden Shield, the &#8220;Target Companies&#8221;, and each a &#8220;Target Company&#8221;), Tianjin Yieryi Technology
Co., Ltd. (&#8220;Yieryi&#8221;), Wolter Global Investment Limited (&#8220;Wolter Global&#8221;, together with Yieryi, the &#8220;Sellers&#8221;,
and each a &#8220;Seller&#8221;) and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) (&#8220;Weilaijin&#8221;),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the &#8220;Acquisitions&#8221;).
Yieryi and Wolter Global are under common control.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
transactions contemplated under the Framework Agreement have closed on January 1, 2022 (the &#8220;Closing&#8221;). Upon the closing
of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong and
Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the &#8220;Weilaijin Share Consideration&#8221;), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the &#8220;Wolter Global Share Consideration&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
January 2022, SG consummated the acquisition of the 100% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. (&#8220;CDZH&#8221;)
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. (&#8220;HYDC&#8221;) from its original shareholders for
a cash consideration of RMB100,000 (US$15,692). We believe the acquisition of CDZH and HYDC will help to enrich the product lines, expand
the user base and commercialize the growth potential in the live streaming market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 7, 2022, Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd (&#8220;QYHZ&#8221;) and its several wholly owned subsidiaries were
established in Zhejiang, PRC to provide information technology service. QYHZ is controlled through contractual agreement in lieu of direct
equity ownership by WXZJ.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts
of the world in the first half of 2020, which has caused significant volatility in the PRC and international markets. After the initial
outbreak of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the
infections caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai
in 2022, and a series of restrictions and quarantines were implemented to contain the spread. Our Beijing and Hangzhou office did not
work at full capacity for approximately two months when these restrictive measures are in force, which negatively affected our operational
and financial results. Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread
of the COVID-19 virus have been revoked or replaced with more flexible measures since December 2022. While the revocation or replacement
of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on our normal operations, the extent of the
impact on the Company&#8217;s future financial results will be dependent on future developments such as the length and severity of the
crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19
pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.
Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations,
financial condition, liquidity and results of operations if the current situation continues.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Key
Factors Affecting Our Results of Operations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>General
Factors</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Development
of the mobile live streaming market in China over the past decade has been influenced by a number of macroeconomic and technological
factors and trends, including increasing disposable income and demand for cultural and entertainment activities and increased use of
the mobile internet. Our business and operating results are affected by general factors affecting China&#8217;s entertainment live streaming
industry, which may include the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">China&#8217;s overall macroeconomic
    landscape</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">China&#8217;s overall entertainment
    and mobile entertainment growth</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Usage and penetration rate
    of mobile Internet and mobile payment</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Growth and competitive
    landscape of China&#8217;s mobile live streaming market, especially entertainment SHOW live streaming</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Governmental policies affecting
    China&#8217;s live streaming industry</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Unfavorable
changes in any of these general industry conditions could negatively affect demand for our services and materially and adversely affect
its results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Specific
Factors</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">While
our business is influenced by general factors affecting the mobile live streaming industry in China, we believe our results of operations
are more directly affected by company specific factors, including the following major factors:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Our
ability to retain broadcasters and enhance user experience</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
continue to improve our operational capability with more attractive contents, such as music, dancing, talk shows, traditional drama,
online competitions and offline events, to further enhance user experience. We are offering different contents and games to attract more
users to pay for our services and to pay more money per user as well. Therefore quality broadcasters and interesting contents are essential
to our operations. In order to retain quality broadcasters, we have developed a revenue sharing policy, pursuant to which we share revenues
generated on the platforms with talents agencies, which in turn share revenues with broadcasters. Additionally, in order to maintain
the quality of broadcasters and service, we are very cautious in hiring broadcasters and has adopted strict operation procedures for
screening broadcasters before hiring. We primarily work with professional agents to identify and retain new broadcasters. The increasing
number of trained broadcasters, who provide better quality performance, also contributes to improved ARPPU and paying ratio of Scienjoy
Inc.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Our
ability to maintain and expand our user base</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">User
base is another key factor for success in the mobile live streaming industry. We endeavor to provide attractive content to keep users
on its platforms as long as possible. Our multi-platform strategy attempt to retain users by providing diversified content, promotions
and an enhanced user experience.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">With
respect to user base, mobile SHOW live streaming sector differs from other mobile live streaming sectors such as pan entertainment live
streaming and game live streaming sector. Because, for SHOW live streaming, each broadcaster interacts in real time with users and therefore
the number of users that each broadcaster can entertain at the same period in his/her video room is limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
continue to seek opportunities to grow our user base and enhance our user engagement. Our ability to do so largely depends on our ability
to recruit, train, and retain high quality broadcasters and our ability to produce high quality content. We also intend to continue to
invest in our brand recognition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
intend to further explore overseas markets to expand our business and user base through both organic expansion and selective investments.
On August 10, 2020, we signed an Equity Acquisition Framework Agreement (the &#8220;BeeLive Acquisition Agreement&#8221;) with Sciscape
International Limited, Tianjin Guangju Dingfei Technology Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co.,
Ltd. Pursuant to the BeeLive Acquisition Agreement, we, through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International
Limited which holds the platform BeeLive International and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest
in Tianjin Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required
to pay (i) a cash consideration of RMB50.0 million and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class
A ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions and
requirements over the following three years. On August 21, 2020, all target shares were transferred to the parties designated in BeeLive
Acquisition Agreement. On September 10, 2020, we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology
Co., Ltd. and issued 3,786,719 Class A Ordinary Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently
changed its name to Sixiang Mifeng (Tianjin) Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.
BeeLive is a global live streaming platform that initially launched in China in November 2016. During the second half of 2019, BeeLive
began expanding into international markets. To date, BeeLive International offers Arabic language live streaming product in the Middle
East and Thai language live streaming product in Southeast Asia.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the &#8220;Framework Agreement&#8221;)
with Golden Shield Enterprises Limited (&#8220;Golden Shield&#8221;), Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;,
together with Golden Shield, the &#8220;Target Companies&#8221;, and each a &#8220;Target Company&#8221;), Tianjin Yieryi Technology
Co., Ltd. (&#8220;Yieryi&#8221;), Wolter Global Investment Limited (&#8220;Wolter Global&#8221;, together with Yieryi, the &#8220;Sellers&#8221;,
and each a &#8220;Seller&#8221;) and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) (&#8220;Weilaijin&#8221;),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the &#8220;Acquisitions&#8221;).
Yieryi and Wolter Global are under common control.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
transactions contemplated under the Framework Agreement have closed on January 1, 2022 (the &#8220;Closing&#8221;). Upon the closing
of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong and
Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the &#8220;Weilaijin Share Consideration&#8221;), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the &#8220;Wolter Global Share Consideration&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Our
ability to improve innovative technologies</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
ability to understand market traffic and pair users with suitable broadcasters and activities is key for user stickiness and monetization
in the mobile SHOW live streaming industry. By using big data analysis to understand individual user behavior and industry trends, we
intend to adjust our platform to better guide users to appropriate broadcasters as well as to analyze traffic on other sites to select
the best methods and targets for user acquisition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Summary
Consolidated Statements of Income</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; border-bottom: Black 1.5pt solid">Amounts in thousands of RMB and USD</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">RMB</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">RMB</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">RMB</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">USD</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%; font-weight: bold; text-align: left">Total revenue</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">1,222,183</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">1,669,358</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">1,953,257</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">283,196</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt">Cost of revenues</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(959,939</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,364,902</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,670,068</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(242,137</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Gross profit</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">262,244</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">304,456</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">283,189</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">41,059</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 98; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Revenues</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
revenues consist of live streaming revenue and technical services revenue. We generate technical services revenue from providing technical
development and advisory services, but the technical services revenue is not material. Our revenue is mostly from the sales of virtual
items used in our live streaming business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Virtual
items are categorized as consumable and time-based items. Consumable items, as virtual gift service, are consumed and used by users upon
purchase, while time-based virtual items, such as privilege titles, could be used for a fixed period of time. Accordingly, revenue is
recognized at the time when the virtual item is delivered and consumed if the virtual item is a consumable item or, in the case of time-based
virtual item, recognized ratably over the period each virtual item is made available to the user, which is usually over one to multiple
months and does not exceed one year. For the years ended December 31, 2020, 2021 and 2022, revenue from consumable virtual items represented
over 97% of the total net revenue.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
we continue to grow our live streaming business, and enhance our user engagement and expand virtual gifting scenarios to increase users&#8217;
willingness to pay, we expect our revenue from the sales of virtual items in our live streaming business to increase.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following table sets forth types of our revenue for the periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">32,905</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2022, we operated five brands of live streaming platforms, consisting of: Showself Live Streaming, Lehai Live Streaming,
Haixiu Live Streaming, BeeLive Live Streaming (including BeeLive Chinese version &#8211; Mifeng) and Hongle Live Streaming. The following
table sets forth our revenue by platforms for the years indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td style="width: 52%; text-indent: -9pt; padding-left: 9pt">Showself</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">595,004</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">521,155</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">321,468</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">326,661</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">317,953</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">485,386</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">545,296</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Hongle</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">287,607</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">41,699</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">39,395</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,712</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">TOTAL</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">1,222,183</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
total number of paying users at Showself Live, Lehai Live, Haixiu Live , Beelive Live and Hongle Live for the years indicated is as following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td style="width: 64%">Showself</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">239,691</td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td>Haixiu</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">319,403</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
ARPPU by Showself Live, Lehai Live, Haixiu Live, Beelive Live and Hongle Live is as following (amounts in RMB):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->90<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Among
five brands of live streaming platforms, Showself Live streaming contributed at least 34% of the paying users for the all the periods
indicated. Our ARPPU in each platform may fluctuate from period to period due to the mix of live streaming services purchased by the
paying users. The overall ARPPU for the years ended December 31, 2020, 2021 and 2022 was RMB 1,345, RMB 1,963 and RMB 2,725, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Cost
of Revenues</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Our
cost of revenues primarily consists of (i) revenue sharing fees, including payments to various broadcasters and content providers, (ii)
user acquisition costs, (iii) bandwidth related costs, and (iv) other costs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
table below shows the cost of revenues for the periods indicated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">(828,874</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">(1,521,100</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">(220,538</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(120,196</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(98,568</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(14,291</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(6,586</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(9,802</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(13,281</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(1,926</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(37,415</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(54,969</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(37,119</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,382</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">TOTAL</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(959,939</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(1,364,902</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(1,670,068</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(242,137</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Revenue
sharing fees and content cost:</i>&#160;Our revenue sharing fees represent our payment to broadcasters based on a percentage of revenue
from sales of virtual items, including virtual gifts and other subscription based privileges. Revenue sharing fees were 68%, 71% and
78% of revenues for the years ended December 31, 2020, 2021 and 2022, respectively. As we need to attract more talented broadcasters
and offer more content to users, we adjusted our revenue sharing policy and provided broadcasters with higher revenue sharing percentage
to attract more talented broadcasters. As a result, the revenue sharing fees increased by 42% in fiscal 2021 compared to fiscal 2020
and increased by 29% in fiscal 2022 compared to fiscal 2021. We expect our sharing fees and content cost for live streaming revenue to
increase in line with the growth of our live streaming operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>User
acquisition costs:</i>&#160;We acquire users primarily through viral marketing, or word-of-mouth marketing, and online download. We provide
online downloads of our apps via various third-party websites, including online advertising networks, internet portals and mobile application
stores. We pay such third parties a fee for each registered user account acquired through them.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Bandwidth
related cost:</i>&#160;Bandwidth related cost consists of fees that we pay to telecommunication service providers for server hosting,
bandwidth and content delivery-related services such as CDN (content delivery network).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Others:</i>&#160;Other
costs include (i) fees that we pay to third-party payment processing platforms through which our users purchase our virtual currencies,
technology service costs, and content producing costs, (ii) personnel fees directly related to the revenue such as operation employees&#8217;
salary and benefits, and (iii) depreciation and amortization expense for servers and other equipment, and intangibles directly related
to operating the platforms. For the years ended December 31, 2020, 2021 and 2022 other cost represented approximately 2% to 3% of related
total revenue.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Operating
Expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Our
operating expenses consists of (i) sales and marketing expenses, (ii) research and development expenses, (iii) general and administrative
expenses, and (iv) provision for doubtful accounts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(65,233</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(61,005</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(8,845</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Research and development expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(31,780</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(70,039</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(67,538</td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,592</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(2,739</td><td style="text-align: left">)</td><td>&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Sales
and marketing expenses:</i>&#160;Our sales and marketing expenses mainly consist of (i) salaries and benefits for sales and marketing
employees, and (ii) branding and advertisement expenses, including advertisements, holding promotional events and developing and designing
marketing campaigns. We expect to target sales and marketing expenditures to attract targeted paying users.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>General
and administrative expenses</i>: Our general and administrative expenses primarily consist of (i) salaries and benefits for our general
and administrative staff, (ii) consulting fees, (iii) other expenses primarily including general office expenses, and (iv) office rental
expenses. We expect that general and administrative expenses will increase when we become a public company and incurs additional costs
to comply with its reporting obligations under the U.S. securities laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Research
and development expenses:</i>&#160;Our research and development expenses primarily consist of (i) salaries and benefits for our research
and development employees, and (ii) other expenses primarily including depreciation related to research use. We expect our research and
development expenses to continue to grow as we continue to invest in innovative technologies to offer users a better experience.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>(Provision
for) recovery of doubtful accounts:</i>&#160;We maintain an allowance for doubtful accounts which reflects our best estimate of amounts
that potentially will not be collected. When we determine the allowance for doubtful accounts, we take into consideration various factors
including but not limited to collection history and credit-worthiness of the debtors as well as the age of the individual receivables
account. We expect that the provision for doubtful accounts to decline as we have committed more resources to collection of account receivables.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Results
of Operations</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Year
Ended December 31, 2022 Compared to Year Ended December 31, 2021</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Revenue:&#160;</b>Total
revenues increased by RMB283.9 million, or 17%, from RMB1,669.4 million for the year ended December 31, 2021 to RMB1,953.3 million for
the year ended December 31, 2022. This increase was driven by more quality content provided through our integrated multiple live streaming
platforms including Hongle platform we acquired in January 2022. For the year ended December 31, 2022, the number of paying user was
702,372, decreased from 840,640 paying user for the year ended December 31, 2021. Our average ARPPU increased by 39%, from RMB1,963 for
the year ended December 31, 2021 to RMB 2,725 for the for the year ended December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Cost
of revenues:</b>&#160;Our cost of revenues increased by 22%, from RMB1,364.9 million for the year ended December 31, 2021 to RMB1,670.1
million for the year ended December 31, 2022. The increase was primarily attributable to a 29%, or RMB341.2 million, year-over-year increase
in the Company&#8217;s revenue sharing fees and content costs. We have to increase sharing fee ratio in the growth and competitive landscape
of China&#8217;s mobile live streaming market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Gross
profit:</b>&#160;Our gross profit for the year ended December 31, 2022 decreased by 7% to RMB283.2 million from RMB304.5 million for
the year ended December 31, 2021. Gross margin for the years ended December 31, 2022 and 2021 was 14% and 18%. As we continued to increase
the revenue sharing fee ratio, it decreased the gross margin in short run but will attract more high-quality broadcasters and enhance
the quality of our content offerings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Total
operating expenses:</b>&#160;Total operating expenses for the year ended December 31, 2022 decreased by 4% to RMB133.4 million from RMB138.5
million for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Sales and
    marketing expenses</i><b>:</b>&#160;Our sales and marketing expenses decreased by 56%, from RMB4.8 million for the year ended December
    31, 2021 to RMB2.1 million for the year ended December 31, 2022. This decrease was mainly due to fewer promotional activities.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
    and administrative expenses</i><b>:</b>&#160;Our general and administrative expenses decreased by 6%, from RMB65.2 million for the
    year ended December 31, 2021 to RMB61.0 million for the year ended December 31, 2022. The decrease was primarily due to a decrease
    of RMB9.5 million in share base compensations, partially offset by more consulting and professional fees <span>due
    to the expansion of the Company</span> and amortization of intangible asset.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Research
    and development expense</i>s<b>:</b>&#160;Our research and development expenses decreased from RMB70.0 million for the year ended
    December 31, 2021 to RMB67.5 million for the year ended December 31, 2022 due to a decrease of RMB13.9 million in share base compensations,
    partially offset by <span>higher employee salary and welfare</span> as a result of increased R&amp;D
    headcounts.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Recovery
    of (provision for) doubtful accounts:</i>&#160;Our provision for doubtful accounts for the year ended December 31 2022 was RMB2.7
    million as compared to a recovery of doubtful accounts of RMB1.6 million for the year ended December 30, 2021, due to slowly collection.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;<b>Change
in fair value of contingent consideration:</b>&#160;The Company&#8217;s reverse recapitalization with Wealthbridge Acquisition Limited
(&#8220;Wealthbridge&#8221;) on May 7, 2020, acquisition of BeeLive on August 10, 2020 and acquisition of Hongle on January 1, 2022,
which involved payments of future contingent consideration upon the achievement of certain financial performance targets and specific
market price levels. Earn out liabilities are recorded for the estimated fair value of the contingent consideration on the merger date.
The fair value of the contingent consideration is re-measured at each reporting period, and the change in fair value is recognized as
either income or expense. For the year ended December 31, 2022, the change in fair value of contingent consideration was RMB13.1 million
as compared to RMB33.6 million for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Change
in fair value of warrant liabilities:&#160;</b>The Company&#8217;s warrants assumed from SPAC acquisition that have complex terms, such
as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash
upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative that are recorded
as a liability at fair value. The warrant derivative liability is adjusted to its fair value at the end of each reporting period, with
the change being recorded as other expense or gain. For the year ended December 31, 2022, the change in fair value of warrant liabilities
was RMB10.8 million as compared to RMB16.4 million for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Change
in fair value of investment in marketable security:</b> In January 2021, the Company, through its wholly owned subsidiary, Scienjoy Inc.,
purchased from Cross Wealth Investment Holding Limited, an entity related to two directors of the Company, 606,061 ordinary shares of
Goldenbridge Acquisition Limited (&#8220;Goldenbridge&#8221;) for an aggregated consideration of US$2 million. Goldenbridge was formed
as a special purpose acquisition company. The investment was classified as investment in marketable security, which is adjusted to its
fair value at the end of each reporting period, with the change being recorded as other expense or gain. Change in fair value of investment
in marketable security for the year ended December 31, 2022 was RMB1.8 million as compared to RMB25.8 million for the year ended December
31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Investment
income (loss): </b>On October 9, 2021, the Company signed an investment agreement to invest up to RMB150,000 into Qingdao Sixiang Zhuohong
Private Equity LP (&#8220;Qingdao LP&#8221;), which further invests in broadcaster, IT, Big Data, Artificial Intelligence and logistic
industry. The Qingdao LLP is managed by two unrelated general partners (GPs). The Company, as a Limited partner, neither participate
in the daily operation of Qingdao LP, nor has the exclusive rights to control the partnership meeting and investment decisions. As a
result, the Company considers it has significant influence on this investment based on its voting power. For the year ended December
31, 2022, the Company recorded shares of income of RMB25.4 million as compared to shares of loss of RMB3.0 million for the year ended
December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Net
income:</b>&#160;As a result of the foregoing, net income increased by 15%, from RMB170.0 million for the year ended December 31, 2021
to RMB195.2 million for the year ended December 31, 2022</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Year
Ended December 31, 2021 Compared to Year Ended December 31, 2020</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Revenue:&#160;</b>Total
revenues increased by RMB447.2 million, or 37%, from RMB1,222.2 million for the year ended December 31, 2020 to RMB1,669.4 million for
the year ended December 31, 2021. This increase was driven by more quality content are provided through our integrated multiple live
streaming platforms including Beelive platforms we acquired in September 2020. For the year ended December 31, 2021, the number of paying
user was 840,640, decreased slightly by 7% from 904,568 paying user for the year ended December 31, 2020. Our average ARPPU increased
by 46%, from RMB 1,345 for the year ended December 31, 2020 to RMB 1,963 for the for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Cost
of revenues:</b>&#160;Our cost of revenues increased by 42%, from RMB959.9 million for the year ended December 31, 2020 to RMB1,364.9
million for the year ended December 31, 2021. The increase was primarily attributable to a 42%, or RMB351.1 million, year-over-year increase
in the Company&#8217;s revenue sharing fees and content costs, which was consistent with the 50% year-over-year increase in active broadcasters
as well as the growth of the Company&#8217;s overall live streaming operations for the year ended December 31, 2021. In addition, the
Company incurred share based compensation of RMB6.2 million for the year ended December 31, 2021 and no such expense incurred for the
year ended December 31, 2020.&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Gross
profit:</b>&#160;Our gross profit for the year ended December 31, 2021 increased by 16% to RMB304.5 million from RMB262.2 million for
the year ended December 31, 2020. Gross margin for the years ended December 31, 2021 and 2020 was 18% and 21%. As we continued to increase
the revenue sharing fee, it decreased the gross margin in short run but will attract more broadcasters and enhance the quality of our
content offerings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Total
operating expenses:</b>&#160;Total operating expenses for the year ended December 31, 2021 increased by 105% to RMB138.5 million from
RMB67.5 million for the year ended December 31, 2020.</span></p><div>

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  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Sales and marketing expenses</i><b>:</b>&#160;Our
    sales and marketing expenses decreased by 53%, from RMB10.1 million for the year ended December 31, 2020 to RMB4.8 million for the
    year ended December 31, 2021. This decrease was mainly due to the additional promotional activities that we executed in fiscal 2020
    following an uptick in online user traffic as more online users spent an increased amount of time at home watching our live streaming
    content during the COVID-19 outbreak.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General and administrative expenses</i><b>:</b>&#160;Our
    general and administrative expenses increased by 92%, from RMB33.9 million for the year ended December 31, 2020 to RMB65.2 million
    for the year ended December 31, 2021. The increase was primarily because we had a share based compensation of RMB12.0 million and
    higher employee salary and welfare and amortization of intangible assets as compared to fiscal year 2020.</span></td></tr>
  </table><div>
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  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Research and development expense</i>s<b>:</b>&#160;Our
    research and development expenses increased from RMB31.8 million in 2020 to RMB70.0 million in 2021 due to increased R&amp;D headcounts
    and the Company had share based compensation of RMB13.9 million for the year ended December 31, 2021.</span></td></tr>
  </table><div>
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    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Recovery of doubtful accounts:</i>&#160;Our
    recovery of doubtful accounts for the year ended December 31 2021 was RMB1.6 million as compared to a recovery of doubtful accounts
    of RMB8.3 million for the year ended December 30, 2020.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Change
in fair value of contingent consideration:</b>&#160;The Company&#8217;s reverse recapitalization with Wealthbridge Acquisition Limited
(&#8220;Wealthbridge&#8221;) on May 7, 2020 and acquisition of BeeLive on August 10, 2020, involved payments of future contingent consideration
upon the achievement of certain financial performance targets and specific market price levels. Earn out liabilities are recorded for
the estimated fair value of the contingent consideration on the merger date. The fair value of the contingent consideration is re-measured
at each reporting period, and the change in fair value is recognized as either income or expense. For the year ended December 31, 2021,
the change in fair value of contingent consideration increased by 139% to RMB33.6 million from RMB14.1 million for the year ended December
31, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Change
in fair value of warrant liabilities:&#160;</b>The Company&#8217;s warrants assumed from SPAC acquisition that have complex terms, such
as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash
upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative that are recorded
as a liability at fair value. The warrant derivative liability is adjusted to its fair value at the end of each reporting period, with
the change being recorded as other expense or gain. For the year ended December 31, 2021, the change in fair value of warrant liabilities
increased by 321% to RMB16.4 million from RMB3.9 million for the year ended December 31, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Change
in fair value of investment:</b>&#160;Change in fair value of investment for the year ended December 31, 2021 amount to RMB22.8 million.
In January 2021, the Company, through its wholly owned subsidiary, Scienjoy Inc., purchased from Cross Wealth Investment Holding Limited,
an entity related to two directors of the Company, 606,061 ordinary shares of Goldenbridge Acquisition Limited (&#8220;Goldenbridge&#8221;)
for an aggregated consideration of US$2 million. Goldenbridge was formed as a special purpose acquisition company. The investment was
classified as investment in marketable security, which is adjusted to its fair value at the end of each reporting period, with the change
being recorded as other expense or gain.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b>Net
income:</b>&#160;As a result of the foregoing, net income decreased by 3%, from RMB176.1 million for the year ended December 31, 2020
to RMB 170.0 million for the year ended December 31, 2021.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Recent
Accounting Pronouncements</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset
and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer
than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all
cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will
be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of
the principal portion of the lease liability will be classified as a financing activity while the interest component will be included
in the operating section of the statement of cash flows. ASU 2016-02 is effective for interim and annual periods beginning after December
15, 2018 and requires a modified retrospective approach to adoption. Early adoption is permitted. In September 2017, the FASB issued
ASU No. 2017-13, which to clarify effective dates that public business entities and other entities were required to adopt ASC Topic 842
for annual reporting. A public business entity that otherwise would not meet the definition of a public business entity except for a
requirement to include or the inclusion of its financial statements or financial information in another entity&#8217;s filing with the
SEC adopting ASC Topic 842 for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual
reporting periods beginning after December 15, 2020. ASU No. 2017-13 also amended that all components of a leveraged lease be recalculated
from inception of the lease based on the revised after tax cash flows arising from the change in the tax law, including revised tax rates.
The difference between the amounts originally recorded and the recalculated amounts must be included in income of the year in which the
tax law is enacted. In November 2019, the FASB issued ASU No. 2019-10, by which to defer the effective date for all other entities by
an additional year. As an emerging growth company, the Company has not early adopted this update and it will become effective on January
1, 2021. In June 2020, the FASB issued ASU No. 2020-05, &#8220;Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842)
Effective Dates for Certain Entities&#8221; (&#8220;ASU 2020-05&#8221;) in response to the ongoing impacts to businesses in response
to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides a limited deferral of the effective dates for implementing previously issued
ASU 606 and ASU 842 to give some relief to businesses and the difficulties they are facing during the pandemic. ASU 2020-05 affects entities
in the &#8220;all other&#8221; category and public Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02,
Leases (Topic 842). Entities in the &#8220;all other&#8221; category may defer to fiscal years beginning after December 15, 2021, and
interim periods within fiscal years beginning after December 15, 2022. The Company adopted ASU 2016-02, Leases (Topic 842) on January
1, 2022.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>I</span><span style="font-size: 10pt">n
June 2016, the FASB issued ASU No. 2016-13, &#8220;Financial Instruments &#8212; Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments,&#8221; which requires the Company to measure and recognize expected credit losses for financial assets held
and not accounted for at fair value through net income. In November 2018, April 2019 and May 2019, the FASB issued ASU No. 2018-19, &#8220;Codification
Improvements to Topic 326, Financial Instruments &#8212; Credit Losses,&#8221; &#8220;ASU No. 2019-04, Codification Improvements to Topic
326, Financial Instruments &#8212; Credit Losses,&#8221; &#8220;Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,&#8221;
and &#8220;ASU No. 2019-05, Financial Instruments &#8212; Credit Losses (Topic 326): Targeted Transition Relief,&#8221; which provided
additional implementation guidance on the previously issued ASU. The ASU is effective for fiscal years beginning after Dec. 15, 2019 for
public business entities that meet the definition of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC. All other
entities, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2022. The adoption of this guidance will not have
a material impact on the Company&#8217;s consolidated financial statements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
October 2018, the FASB issued ASU No. 2018-17 (&#8220;ASU 2018-17&#8221;), Consolidation (Topic 810): Targeted Improvements to Related
Party Guidance for Variable Interest Entities. The updated guidance requires entities to consider indirect interests held through related
parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining
whether a decision-making fee is a variable interest. The amendments in this update are effective for non-public business entities for
fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, with early
adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the
beginning of the earliest period presented. The adoption of this guidance did not have a material impact on the Company&#8217;s consolidated
financial statements.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, to simplify the
accounting for income taxes. The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the
methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.
It also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting
for transactions that result in a step-up in the tax basis of goodwill. This ASU became effective for the Company&#8217;s annual and
interim periods starting from January 1, 2021, and early adoption is permitted. The adoption of this guidance did not have a material
impact on the Company&#8217;s consolidated financial statements.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures
(Topic 323), and Derivatives and Hedging (Topic 815) (&#8220;ASU 2020-01&#8221;), which is intended to clarify the interaction of the
accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and
the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company
beginning January 1, 2021. The adoption of this guidance did not have a material impact on the Company&#8217;s consolidated financial
statements.&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
August 2020, the FASB issued ASU 2020-06, Debt &#8211; Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
&#8211; Contracts in Entity&#8217;s Own Equity (Subtopic 815-40) (&#8220;ASU 2020-06&#8221;). ASU 2020-06 simplifies the guidance for
certain financial instruments with characteristics of both debt and equity, including convertible instruments and contracts on an entity&#8217;s
own equity, by reducing the number of accounting models for convertible instruments. It also amends guidance in ASC Topic 260, Earnings
Per Share, relating to the computation of earnings per share for convertible instruments and contracts on an entity&#8217;s own equity.
ASU 2020-06 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2021, with early adoption
permitted for fiscal years that begin after December 15, 2020. The adoption of this guidance did not have a material impact on the Company&#8217;s
consolidated financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">In
October 2021, the FASB issued ASU No. 2021-08, &#8220;&#8216;Business Combinations (Topic 805): Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers&#8221; (&#8220;ASU 2021-08&#8221;). This ASU requires entities to apply Topic 606 to recognize
and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business
combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business
combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company
beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company
does not expect the adoption of ASU 2021-04 will have a material effect on the consolidated financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Except
for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated
financial position, statements of operations and cash flows.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_020"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Liquidity
and Capital Resources</b></span></td>
</tr></table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Cash
Flows and Working Capital</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
Company sources of liquidity are primarily from the cash earned from its operating activities and proceeds from financing activities.
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and
cash equivalents. The Company&#8217;s cash and cash equivalents consist of cash on hand and demand deposits placed with banks or other
financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. Cash and
cash equivalents also consist of funds earned from the operating revenues which were held at the third party platform fund accounts which
are unrestricted as to immediate use or withdraw.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2021 and 2022, RMB238,792 and RMB172,514, respectively, were deposited with major financial institutions located in the
PRC. Management believes that these financial institutions are of high credit quality and continually monitor the credit worthiness of
these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors&#8217;
interests. The Company has no short term investments as of December 31, 2021 and 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">A
majority of the Company&#8217;s expense transactions are denominated in RMB and a significant portion of assets and liabilities of the
Company and its subsidiaries (including the VIEs) are denominated in RMB. RMB is not freely convertible into foreign currencies. In the
PRC certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange
rates set by the PBOC. Remittances in currencies other than RMB by the Companies in China must be processed through the PBOC or other
PRC foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities
and funds raised from financing activities. The Company believes that its current cash and cash equivalents, together with its cash generated
from operating activities and financing activities, will be sufficient to meet its present anticipated working capital requirements and
capital expenditures for at least the next 12 months. However, the Company may decide to enhance its liquidity position or increase its
cash reserve for future investments or operations through additional capital and finance funding. Issuance of additional equity securities,
including convertible debt securities, would dilute the Company earnings per share. The incurrence of debt would divert cash for working
capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict the
Company&#8217;s operations and its ability to pay dividends to its shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">As
a holding company with no material operations of its own, the Company conducts its operations primarily through its PRC subsidiaries
and its variable interest entity (VIE) and the VIE&#8217;s subsidiaries. The Company is permitted under PRC laws and regulations to provide
funding to its PRC subsidiaries in China through capital contributions or loans, subject to the approval of government authorities and
limits on the amount of capital contributions and loans.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
following table presents the summary of the Company&#8217;s cash flow data.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(115,124</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(113,246</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(16,420</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(11,482</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(1,665</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(282</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,522</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">220</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">16,179</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(65,655</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(9,519</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Cash and cash equivalents at beginning of the year</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">137,351</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">224,768</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">240,947</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">34,934</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Cash and cash equivalents at end of the year</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">224,768</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">240,947</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">175,292</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">25,415</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Operating
Activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by or used in operating activities consisted primarily of the Company&#8217;s net income/loss adjusted by non-cash adjustments,
such as provision for doubtful accounts, and adjusted by changes in operating assets and liabilities, such as accounts receivable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by operating activities was RMB57.6 million for the year ended December 31, 2022. The difference between the net cash provided
by operating activities and net income of RMB195.2 million was primarily attributable to non-cash adjustment of RMB23.3 million, an increase
in accounts payable of RMB25.5 million due to slower payment to suppliers and an increase in deferred revenue of RMB22.4 million, partially
offset by a decrease of RMB22.0 million in prepaid expense and other current assets and an increase of RMB14.1 million in accrued expenses
and other payables.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by operating activities was RMB116.3 million for the year ended December 31, 2021. The difference between the net cash
provided by operating activities and net income of RMB170.0 million was primarily attributable to non-cash adjustment of RMB 29.7 million,
an increase in account payable of RMB18.7 million due to slower payment to suppliers in 2021 and a decrease of RMB23.5 million in accounts
receivable, partially offset by an increase in prepaid expenses and other current assets of RMB151.6 million, mainly due to advance to
Beijing Weiliantong Technology Co., Ltd of RMB86.2 million and investment disposal receivable RMB30.0 million in in Tianjing Yieryi Technology
Co., Ltd.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by operating activities was RMB155.4 million for the year ended December 31, 2020. The difference between the net cash
provided by operating activities and net income of RMB176.1 million was primarily attributable to non-cash adjustment related to change
in fair value of contingent liability of RMB14.1 million, an increase in account payable of RMB28.4 million due to slower payment to
suppliers in 2020 and an increase of RMB8.0 million in accrued salary and employee benefits, partially offset by an increase accounts
receivable of RMB70.5 million, mainly due to increase of revenue.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "></p><div>

</div><!-- Field: Page; Sequence: 105; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->96<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Investing
Activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash used in investing activities was primarily due to (a) purchases of property and equipment such as electronic equipment, and intangible
assets such as trademark, software copyrights, and patents; (b) payment for long term investment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash used in investing activities amounted to RMB113.2 million for the year ended December 31, 2022, primarily due to RMB107.0 million
paid for long term investment and RMB4.1 million net cash paid for acquisition of Weiliantong and acquisition of Chuangda Huizhi.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt; "><span style="font-family: Times New Roman, Times, Serif">Net
cash used in investing activities amounted to RMB115.1million for the year ended December 31, 2021, primarily due to RMB113.7 million
paid for long term investment and RMB1.4 million purchase of equipment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash used in investing activities amounted to RMB40.9 million for the year ended December 31, 2020, primarily due to RMB50 million paid
for Beelive acquisition and RMB1.1 million purchase of equipment, offset by the cash acquired from acquisition of RMB10.2 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Financing
Activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash used in financing activities amounted to RMB11.5 million for the year ended December 31, 2021, primarily due to net proceeds of
RMB 16.5 million paid for treasure stocks, offset by RMB5.0 million proceed from bank loan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by financing activities amounted to RMB15.3 million for the year ended December 31, 2021, primarily due to net proceeds
of RMB 15.3 million from private placement and exercised of warrants and Unit Purchase Option.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">Net
cash used in financing activities amounted to RMB23.3 million for the year ended December 31, 2020, primarily due to repayment RMB 57.4
million for loan payables, RMB14.0 million paid to related parties and RMB6.9 million paid for listing costs, offset by cash of RMB32.7
million acquired in the reverse recapitalization and RMB 22.3 million loan proceeds from related parties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif"><i>Capital
Expenditures.</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">For
the years ended December 31, 2020, 2021 and 2022, the Company&#8217;s capital expenditure amounted to RMB1.1 million, RMB1.4 million
and RMB2.2 million, respectively. The Company intends to fund its future capital expenditures with the existing cash balance and other
financing alternatives. The Company will continue to make capital expenditures to support the growth of its business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_021"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Research and Development,
    Patents and Licenses, etc.</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">See
&#8220;Item 4. Information on the Company&#8212;B. Business Overview&#8212;Our Technology&#8221; and &#8220;Item 4. Information on the
Company&#8212;B. Business Overview&#8212;Intellectual Property.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_022"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Trend Information</b></span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Other
than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that
are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or
capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results
or financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_023"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Critical Accounting
    Estimates</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually
evaluates these estimates and assumptions based on the most recently available information, our own historical experience and various
other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the
financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting
policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our combined and consolidated
financial statements and accompanying notes and other disclosures included in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Business
combinations</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company accounts for all business combinations under the purchase method of accounting in accordance with ASC 805, Business Combinations
(&#8220;ASC 805&#8221;). The purchase method of accounting requires that the consideration transferred to be allocated to net assets
including separately identifiable assets and liabilities the Company acquired, based on their estimated fair value. The consideration
transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities
incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition
date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities
acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling
interests. The excess of (i) the total of the cost of the acquisition, fair value of the non-controlling interests and acquisition date
fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree
is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference
is recognized directly in earnings. The determination and allocation of fair values to the identifiable net assets acquired and liabilities
assumed is based on various assumptions and valuation methodologies requiring considerable judgment from management. Although the Company
believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition,
actual results may differ from forecasted amounts and the differences could be material.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 10, 2020, the Company entered into a purchase agreement with the shareholder of LXZ to acquire 100% equity interest in LXZ with
a cash consideration of RMB 200 (US$31). The operating results of LXZ for the years ended December 31, 2019 and 2020 were not significant
to the Company. The operating results of LXZ have been included in the consolidated financial statements since the acquisition. The Company&#8217;s
acquisition of LXZ was accounted for as business combination in accordance with ASC 805. Acquisition-related costs incurred for the acquisition
are not material.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
August 10, 2020, the Company signed an Equity Acquisition Framework Agreement (the &#8220;BeeLive Acquisition Agreement&#8221;) to acquire
100% equity interest in Sciscape International Limited which holds the platform BeeLive International and 100% equity interest in Tianjin
Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required to pay
(i) a cash consideration of RMB50.0 million (US$7.4 million) and (ii) RMB250.0 million in ordinary shares (approximately 5.4 million
ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions (i.e.
earn-out provisions as discussed below) and requirements over the following three years (earn-out arrangement). The fair value of purchase
price including the consideration for earn-out arrangement was RMB264,755, based on a valuation performed by an independent valuation
firm engaged by the Company. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently changed its name to Sixiang Mifeng (Tianjin) Technology
Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited (together &#8220;BeeLive&#8221;). For the year ended
December 31, 2020 and 2021, the first and second portion of earn-out shares of 540,960 and 540,960 achieved the performance requirement.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Use
of estimates</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment
include, but are not limited to revenue recognition, estimating the useful lives of long-lived assets and intangible assets, valuation
assumptions in performing asset impairment tests of long-lived assets, fair value of warrants liabilities and contingent liability, allowance
for doubtful accounts, and valuation of deferred taxes and deferred tax assets. Actual results could differ from those estimates, and
as such, differences may be material to the consolidated financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Accounts
Receivable and Allowance for Doubtful Accounts</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Accounts
receivable are stated at the historical carrying amount net of allowance for doubtful accounts. Accounts are considered overdue after
180 days.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected.
The Company determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical
collection experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the
Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account
is uncollectible. The facts and circumstances for each account may require the Company to use substantial judgment in assessing its collectability.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Account
balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is
not probable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Revenue
Recognition</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 1, 2019, the Company adopted ASC 606, &#8220;Revenue from Contracts with Customers&#8221; using the modified retrospective method
applied to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019
are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company&#8217;s
historic accounting under Topic 605. Based on the Company&#8217;s assessment, the adoption of ASC 606 did not result in any adjustment
on the Company&#8217;s consolidated financial statements, and there were no material differences between the Company&#8217;s adoption
of ASC 606 and its historic accounting under ASC 605.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Revenues
are recognized when control of the promised virtual items or services is transferred to the Company&#8217;s customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those virtual items or services. Revenue is recorded,
net of sales related taxes and surcharges. The Company derives their revenue from live streaming service and technical service.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Live
streaming</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company is principally engaged in operating its own live streaming platforms, which enable broadcasters and viewers to interact with
each other during live streaming. The Company is responsible for providing a technological infrastructure to enable the broadcasters,
online users and viewers to interact through live streaming platforms. All the platforms can be accessed for free. The Company mainly
derives the revenue from sales of virtual items in the platforms. The Company has a recharge system for users to purchase the Company&#8217;s
virtual currency then purchase virtual items for use. Users can recharge via various online third-party payment platforms, including
WeChat Pay, AliPay and other payment platforms. Virtual currency is non-refundable and often consumed soon after it is purchased.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company designs, creates and offers various virtual items for sales to users with pre-determined stand-alone selling price. Virtual items
are categorized as consumable and time-based items. Consumable items are consumed upon purchase and use while time-based items could
be used for a fixed period of time. Users can purchase and present consumable items to broadcasters to show support for their favorite
broadcasters, or purchase time-based virtual items for one or multiple months for a monthly fee, which provide users with recognized
status, such as priority speaking rights or special symbols over a period of time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company shares a portion of the sales proceeds of virtual items (&#8220;revenue sharing fee&#8221;) with broadcasters and talent agencies
in accordance with their revenue sharing arrangements. Broadcasters, who do not have revenue sharing arrangements with the Company, are
not entitled to any revenue sharing fee. The Company also utilizes third-party payment collection channels, which charges the payment
handling cost for users to purchase the virtual currency directly from it. The payment handling costs are recorded in cost of sales.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company evaluates and determines that it is the principal and views users to be its customers, because the Company controls the virtual
items before they are transferred to users. Its control is evidenced by the Company&#8217;s sole ability to monetize the virtual items
before they are transferred to users, and is further supported by the Company being primarily responsible to the users for the delivery
of the virtual items as well as having full discretion in establishing pricing for the virtual items. Accordingly, the Company reports
live streaming revenues on a gross basis with the amounts billed to users recorded as revenues and revenue sharing fee paid to broadcasters
and related agencies recorded as cost of revenues.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Sales
proceeds are initially recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. The Company
has determined that each individual virtual item represents a distinct performance obligation. Accordingly, live streaming revenue is
recognized immediately when the consumable virtual item is used, or in the case of time-based virtual items, revenue is recognized over
the fixed period on a straight line basis. The Company does not have further obligations to the user after the virtual items are consumed.
The Company&#8217;s live streaming virtual items are generally sold without right of return and the Company does not provide any other
credit and incentive to its users. Unconsumed virtual currency is recorded as deferred revenue.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company also cooperates with independent third-party distributors to sell virtual currency through annual distribution agreements with
these distributors. Third-party distributors purchase virtual currency from the Company with no refund provision according to the annual
distribution agreements, and they are responsible for selling the virtual currency to end users. They may engage their own sales representatives,
which are referred to as &#8220;sales agents&#8221; to directly sell to individual end users. The Company has no control over such &#8220;sales
agents&#8221;. The Company has discretion to determine the price of the virtual currency sold to its third-party distributors, but has
no discretion as to the price at which virtual currency is sold by its third-party distributors to the sales agents.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Technical
Services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company generated technical revenues from providing technical development and advisory, which accounts for only less than 1% of revenue.
As the amount was immaterial, and short-term in nature which is usually less than six months, the Company recognizes revenue when service
were rendered and accepted by customers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Practical
expedients and exemptions</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s contracts have an original duration of one year or less. Accordingly, the Company does not disclose the value of unsatisfied
performance obligations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Revenue
by types and platforms</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
following table sets forth types of our revenue for the periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">As
of December 31, 2022, we operated five brands of live streaming platforms, consisting of: Showself Live Streaming, Lehai Live Streaming,
Haixiu Live Streaming, BeeLive Live Streaming (including BeeLive Chinese version &#8211; Mifeng) and Hongle Live Streaming. The following
table sets forth our revenue by platforms for the periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">545,296</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">79,060</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Hongle</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">287,607</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">TOTAL</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">283,196</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Contract
balances</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Contract
balances include accounts receivable and deferred revenue. Accounts receivable primarily represent cash due from distributors and are
recorded when the right to consideration is unconditional. The allowance for doubtful accounts reflects the best estimate of probable
losses inherent to the account receivable balance. Deferred revenue primarily includes unconsumed virtual currency and unamortized revenue
from time-based virtual items in the Company&#8217;s platforms, where there is still an obligation to be provided by the Company, which
will be recognized as revenue when all of the revenue recognition criteria are met. Due to the generally short-term duration of the relevant
contracts, all performance obligations are satisfied within one year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Intangible
assets</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Intangible
assets are carried at cost less accumulated amortization and any impairment. License for Beelive platform is determined to have an infinite
useful life and is not subject to amortization and tested for impairment at least annually. Intangible assets with a finite useful life
are amortized using the straight-line method over the estimated economic life of the intangible assets as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 79%">Trademark</td><td style="width: 1%">&#160;</td>
    <td style="width: 20%; text-align: center">10 years</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>Patent</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Copyright</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>Software</td><td>&#160;</td>
    <td style="text-align: center">3 to 10 years</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Licenses acquired</td><td>&#160;</td>
    <td style="text-align: center">3 years to infinite life</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Impairment
of long-lived assets</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company evaluates its long-lived assets or asset group, including property and equipment and intangible assets including license that
has an infinite useful life, for impairment whenever events or changes in circumstances (such as a significant adverse change to market
conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets
may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets
to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the
expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based
on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash
flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. No impairment
of long-lived assets was recognized for the years ended December 31 2020, 2021 and 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 109; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Goodwill</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Goodwill
represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination.
Goodwill is not subject to amortization but is monitored annually for impairment or more frequently if there are indicators of impairment.
Management considers the following potential indicators of impairment: significant underperformance relative to historical or projected
future operating results, significant changes in the Company&#8217;s use of acquired assets or the strategy of the Company&#8217;s overall
business, significant negative industry or economic trends and a significant decline in the Company&#8217;s stock price for a sustained
period. The Company performs its impairment test on annual basis. Currently, the Company&#8217;s goodwill is evaluated at the entity
level as it has been determined there is&#160;one&#160;operating segment comprised of one reporting unit. When assessing goodwill for
impairment the Company first performs a qualitative assessment to determine whether it is necessary to perform a quantitative analysis.
If the Company determines it is unlikely that the reporting unit fair value is less than its carrying value then no quantitative assessment
is performed. If the Company cannot determine that it is likely that the reporting unit fair value is more than its carrying value, then
the Company performs a quantitative assessment. Based on the qualitative assessment performed for the year ended December 31, 2022, the
Company determined it was unlikely that its reporting unit fair value was less than its carrying value and no quantitative assessment
was required.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;<b><i>Fair
value of financial instruments</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">ASC
825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize
the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as
follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "><span style="font-family: Times New Roman, Times, Serif">The
carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, other receivables included
in prepaid expenses and other current assets, accounts payables, balances with related parties and other current liabilities, approximate
their fair values because of the short-term maturity of these instruments.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Assets
and Liabilities Measured or Disclosed at Fair Value on a recurring basis</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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following tables represent the fair value hierarchy of the Company&#8217;s financial assets and liabilities measured at fair value on a recurring
basis as of December 31, 2021 and 2022:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; "><i>Contingent
consideration &#8211; earn-out liability</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earn-out
liability from SPAC transaction</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">In
connection with SPAC transaction, the previous shareholders of Scienjoy Inc. may be entitled to receive earnout shares as follows: (1)
if Scienjoy Inc.&#8217;s net income before tax for the year ended December 31, 2020 is greater than or equal to either US$28,300,000
or RMB 190,000,000, the previous owners of Scienjoy Inc will be entitled to receive 3,000,000 Class A ordinary shares of the Company
(&#8220;SPAC Earn-out Target 2020&#8221;); and (2) if Scienjoy Inc.&#8217;s net income before tax for the year ended December 31, 2021
is greater than or equal to either US$35,000,000 or RMB 235,000,000, the previous owners of Scienjoy Inc. will be entitled to receive
3,000,000 Class A ordinary shares of the Company. Notwithstanding the net income before tax achieved by the post-transaction company
for any period, the previous owners of Scienjoy Inc. will receive (i) 3,000,000 earn-out shares if the share price of the Company is
higher than $20.00 for any sixty days in any period of ninety consecutive trading days between May 8, 2021 and May 7, 2022, and (ii)
3,000,000 earnout shares if the share price of the Company is higher than $25.00 for any sixty days in any period of ninety consecutive
trading between May 8, 2022 and May 7, 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">Upon
the closing of the SPAC Transaction, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from May 8, 2020 to December 31, 2021 in in earnings. The Company determined the fair value of
the contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in the
fair value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend
rate, to generate individual stock price paths. The major assumptions used in the binomial model are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earn-out
liability from BeeLive acquisition</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">In
connection with the acquisition of Beelive (Note 4), the previous shareholders of BeeLive may be entitled to receive earnout shares as
follows: (i) if the BeeLive Company&#8217;s total annual revenue is no less than RMB 336.6 million in Year 2020,the previous shareholder
will be entitled to received additional 540,960 Class A ordinary shares (&#8220;Beelive Earn-out Target 2020&#8221;); (ii) if the BeeLive
Companies&#8217; total annual revenue is no less than RMB 460.6 million in Year 2021 (&#8220;Beelive Earn-out Target 2021&#8221;), the
previous shareholder will be entitled to received additional 540,960 Class A ordinary shares; and (iii) if the BeeLive Companies&#8217;
total annual revenue is no less than RMB 580.9 million in Year 2022 (&#8220;Beelive Earn-out Target 2022&#8221;), the previous shareholder
will be entitled to received additional 540,960 Class A ordinary shares. If the total annual revenue of BeeLive Company in a particular
performance year does not reach the target revenue as specified above, but is equal to or more than 80% of the target revenue, the previous
shareholder will be entitled to a reduced number of the earn-out shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">Upon
the closing of the BeeLive acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from the acquisition date to December 31, 2022 in earnings. The Company determined the fair value
of the contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in
the fair value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected
dividend rate, to generate individual stock price paths. The major assumptions used in the binomial model are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><div>



</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td>Share price</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">8.66</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">5.68</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1.97</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; ">(iii)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; ">Earn-out
liability from Weiliantong acquisition</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">In
connection with the acquisition of Weiliantong (Note 4), the previous shareholders of Weiliantong may be entitled to receive earnout
shares as follows: (i) if the Weiliantong Company&#8217;s total annual revenue is no less than RMB280,000 in 2022, the previous shareholder
will be entitled to received additional 10% of consideration( Class A ordinary shares) (&#8220;Weiliantong Earn-out Target 2022&#8221;);
(ii) if Weiliantong total annual revenue is no less than RMB 360,000 in Year 2023, the previous shareholder will be entitled to received
additional 10% of consideration (Class A ordinary shares); If the total annual revenue of Weiliantong Company in a particular performance
year does not reach the target revenue as specified above, but is equal to or more than 80% of the target revenue, the previous shareholder
will be entitled to a reduced number of the earn-out shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">Upon
the closing of the Weiliantong acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out
liability and recorded the changes in fair value in earnings. The Company determined the fair value of the contingent consideration using
binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial
model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual
stock price paths. The major assumptions used are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Risk-free interest rate</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.39-0.73</span></td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right">1.97</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">The
Company measures contingent consideration &#8211; earn-out liability at fair value on a recurring basis as of the dates of acquisition
and December 31, 2021 and 2022. The following table presents the fair value hierarchy for assets and liabilities measured at fair value
on a recurring basis:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">As
of December 31, 2021, the earn-out liability related to SPAC Earn-out Target 2021 and Beelive Earn-out Target 2021 were met. As a result,
the Company classified the related portion of earn-out liability in aggregated of RMB128,119&#160;as shares to be issued in the equity
of the Company. As of December 31, 2021, there was&#160;3,540,960&#160;earn-out shares required to be issued and the Company included
it in the calculation of earnings per share, which was fully issued on June 8, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">As
of December 31, 2022, Beelive has achieved 93.87% of the Beelive Earn-out Target 2022 and Weiliantong has achieved 100% of Weiliantong
Earn-out Target 2022. As a result, the Company classified the related portion of earn-out liability in aggregated of RMB13,106&#160;as
shares to be issued in the equity of the Company. As of December 31, 2022, there was&#160;995,118&#160;earn-out shares required to be
issued and the Company included it in the calculation of earnings per share. Upon issuance of this report, a total of 507,804 (540,960
* 93.87%) has been issued to Cosmic Soar, the previous shareholder of Beelieve and a total of 487,314 share has been issue to Wolter
Global, the previous shareholder of Weiliantong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">The
Company did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2020, 2021 and 2022. The
following is a reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring
basis using significant unobservable inputs (Level 3) during the years ended December 31, 2020, 2021 and 2022:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Balance at January 1, 2020</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="width: 88%; text-align: left; text-indent: -9pt; padding-left: 9pt">Contingent consideration resulting from SPAC Transaction</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">266,828</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(2,126</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">The
aggregated contingent considerations for the earn-out liabilities were approximate RMB10.6&#160;million and RMB4.3 million as of December
31, 2021 and 2022, respectively. The balance of contingent consideration for the earn-out liabilities are classified as current liability
due to short term nature. </span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; "><i>Warrant
liabilities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">The
Company&#8217;s warrants assumed from SPAC acquisition on May 7,2020, the date of the closing of SPAC Transaction, that have complex
terms, such as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants
for cash upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative as
contemplated in ASC 815-40. The warrant is recorded as derivative liability on the consolidated balance sheet upon the SPAC transaction
and is adjusted to its fair value at the end of each reporting period, with the change being recorded as other expense or gain in accordance
with ASC 820.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">The
warrant liabilities were measured and recorded on a recurring basis. The Company determined the fair value of the contingent consideration
using binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial
model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual
stock price paths. The major assumptions used in the binomial model are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; ">The
following&#160;table sets forth the establishment of the&#160;Company&#8217;s&#160;Level 3&#160;warrant liabilities, as well as a summary
of the changes in the fair value:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Balance</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Balance at January 1, 2020</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Fair value change</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(3,904</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Exchange difference</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Balance as of December 31, 2020</td><td>&#160;</td>
    <td style="text-align: left">&#165;</td><td style="text-align: right">29,558</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(16,421</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Exercised</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(115</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Balance as of December 31, 2021</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(10,776</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Income
Taxes</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The Company follows the liability
method in accounting for income taxes in accordance to ASC topic 740 (&#8220;ASC 740&#8221;), Income Taxes. Under this method, deferred
tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities
using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. A valuation allowance
would be recorded against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion,
or all, of the deferred tax assets will not be realized.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on recognition of income
tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties
associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required
in evaluating the Company&#8217;s uncertain tax positions and determining its provision for income taxes. The Company recognizes interests
and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement
of comprehensive loss. The Company did not recognize any interest and penalties associated with uncertain tax positions as of December
31, 2021 and 2022. As of December 31, 2021 and 2022, the Company did not have any significant unrecognized uncertain tax positions.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_025"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Directors and Executive
    Officers</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following table sets forth information of our senior management and directors, and their ages as of the date of this report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font-family: Times New Roman, Times, Serif; width: 30%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Names</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 7%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Age</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 61%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Position</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xiaowu He</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">47</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director, Chief Executive Officer, and Chairman of
    the Board</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bo Wan</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">47</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director, Chief Operating Officer</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Denny Tang</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">53</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yongsheng Liu</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">53</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director, Vice Chairman of the Board</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hucheng Zhou</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Huifeng Chang</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">57</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jian Sun</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yibing Liu</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">50</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Xiaowu
He.</i></b>&#160;Mr. He has been our Chief Executive Officer, Director and Chairman of the Board since May 2020. He is one of the three
co-founders of Scienjoy Inc. and has served as the chief executive officer of Scienjoy Inc. since October 2011. Mr. He has been mainly
responsible for Scienjoy &#8217;s overall business, including business strategies, company operations and financings. Mr. He has also
been the 100% shareholder and director of Enmoli Inc. since December 2018 and the 100% shareholder and director of Heshine Holdings Limited,
which is one of the two shareholders of Lavacano, since January 2019. Prior to founding Scienjoy Inc. in 2011, between 2008 and 2011,
Mr. He served as the East Asia Regional Director of Business Development of Tyco International, a Fortune 500 Company, where he was responsible
for commercial cooperation and development of the entire Sensormatic product line in East Asia. From 2006 to 2007, Mr. He worked at NCR/Teradata
Toronto, Canada and provided technical and customer support for its DCM program. From 2004 to 2006, Mr. He was a manager at M&amp;L Export
and Import Company in Toronto, Canada. Prior to working in Canada, Mr. He worked in Fujian, China, and assumed various positions in UTStarcom,
Shida System Integration Company, and Fujian Posts and Telecommunications. Mr. He received his MBA degree from the University of New
Brunswick. We believe that Mr. He&#8217;s qualifications to sit on the board include his deep understanding of our business model and
strong leadership in the capacity of an executive and a director, along with his expertise in strategic planning, corporate financing
and business development, and extensive experience in the information technology industry.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Bo
Wan.</i></b>&#160;Mr. Wan has been our Chief Operating Officer and Director since May 2020. He is one of the three Co-founders of Scienjoy
Inc. and has served as the chief operating officer of Scienjoy Inc. since October 2011. Mr. Wan has been mainly responsible for Scienjoy
&#8217;s business operation, marketing and human resources. Mr. Wan has also been the 100% shareholder and director of WBY Holdings Limited
since December 2019. Prior to founding Scienjoy Inc., Mr. Wan managed a team of over thirty people in the software department at NCR/Teradata
in Beijing, China, a global leading company in financial products, data warehouse, and IT service from 2006 to 2012. He took the lead
in designing and developing multiple BI products, the company&#8217;s first cloud-based solution and other programs. From 2001 to 2006,
Mr. Wan assumed various positions including project director, project manager, senior pre-sale/post-sale consultant at NCR in Toronto,
Canada. Mr. Wan also served as Huawei&#8217;s senior test development engineer in Beijing between 2000 and 2001 and worked as a project
manager and software engineer at China Unicom in Tianjin between 1997 and 2000. Mr. Wan received his MBA degree from Lawrence Technological
University. We believe that Mr. Wan is qualified to sit on the board due to his in-depth knowledge of Scienjoy Inc., outstanding company
management skills, and years of experience in supply chain, data analysis, customer development and human resources in the information
technology, Internet and Mobile Internet industry.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Denny
Tang.&#160;</i></b>Mr. Tang has been our Chief Financial Officer since May 2020. Mr. Tang has extensive experience working in a multi-cultural
and complex matrix reporting hierarchy and has served as the chief financial officer of Scienjoy Inc. since February 2020. From 2007
to 2017, Mr. Tang served as the Group Finance Director at Ogilvy Beijing, a 4A agency that offers a broad range of marketing communication
service. While at Ogilvy Beijing, Mr. Tang led 4 directors and set up direct procurement function that is first in kind in the PRC advertising
industry. He also assumed board of directorship in more than 20 subsidiaries and was the point of contact of JV partners. From 1999 to
2007, Mr. Tang was the business planning &amp; developing manager (head of finance) at PCCW-NOW TV, where he was in charge of the whole
finance of a pay TV operator. From 1996 to 1999, Mr. Tang worked as the business development manager at New World Infrastructure, where
he participated in due diligence, project finance pre &amp; post acquisition and assisted in IPO listing of China.com, the first PRC
internet company listed in the U.S. From 1992 to 1994, Mr. Tang was a senior associate at KPMG&#8217;s Beijing office and involved in
advisory and reconstruction projects of pre-listing of A/B shares of PRC state owned enterprise. Mr. Tang graduated from Hong Kong Polytechnic
University with Honors in Accountancy and earned his MBA degree from the Chinese University of Hong Kong while gaining exchange experience
at Columbia Business School. We believe that Mr. Tang is qualified to serve as the Chief Financial Officer because he has extensive experience
in accounting, finance, and business management at leading companies in the media and internet industry.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Yongsheng
Liu.</i></b>&#160;Mr. Liu was our Chief Executive Officer and Chairman of our Board since our inception through the closing of the Business
Combination and is currently a Director and Vice Chairman of the Board. Throughout the past 20 years, Mr. Liu has assumed various corporate
leadership positions and demonstrated his strong execution ability and in-depth knowledge in private equity and corporate M&amp;A transactions
across a wide range of sectors including aviation, consumer, financial institutions, and technology. Since August 2020, Mr. Liu has been
chief executive officer and chairman of the board of Goldenbridge Acquisition Limited. From March 2017 to April 2018, Mr. Liu served
as Chairman and CEO of Royal China Holdings Limited (HKEx: 01683), during which he spearheaded the company&#8217;s international growth
strategy focused at acquiring targets in aviation industry and finance sector. From the beginning of 2013 to March 2017, Mr. Liu was
the Chairman of Joy Air General Aviation, Chairman of Cambodia Bayon Airlines, Vice Chairman of Everbright and Joy International Leasing
Company, and President of General Aviation Investment Company (Shanghai). From April 2004 to August 2008, Mr. Liu also served as Chief
Strategy Officer of United Eagle Airlines (subsequently renamed to Chengdu Airlines). From December 1994 to June 2000, Mr. Liu was a
manager of China Southern Airlines responsible for ground staff training. Mr. Liu received his master degree from University of Ottawa
in 2003 and his bachelor&#8217;s degree from Civil Aviation University of China in 1992.We believe that Mr. Liu is qualified to sit on
our board due to his many years of public company management and director experience, along with his expertise in strategic planning,
corporate financing and business development.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 16.2pt"><span style="font-family: Times New Roman, Times, Serif"><b><i>Hucheng
Zhou (Independent Director starting from August 6, 2021). </i></b>Mr. Zhou has served as an Independent Director of our Board since August
2021. Mr. Zhou has extensive experience in board governance. Mr. Zhou has served as an independent director of Soling Co Ltd. since December
2019. Mr. Zhou supervises the operation of Soling Co Ltd. on behalf of small and medium-sized shareholders, is responsible for convening
the nomination committee and the strategic committee, and participates in the supervision of Soling Co Ltd.&#8217;s strategic remuneration
and audit-related business. Mr. Zhou has also served as the vice president, deputy secretary general, and senior researcher at the Charhar
Institute since April 2018. In addition, Mr. Zhou has served as the vice president of Guangdong Health China Society since March 2021,
the vice president of Southeast and South Asia Branch of Europe-America Alumni Club since January 2020, the vice president of Guangdong
Alumni Association of Nanyang Technological University since November 2018, the executive director of China Association for International
Public Relations since May 2017, and a visiting professor at Visiting Professor of Seoul Communication University in Korea since March
2017. From March 2017 to April 2018, Mr. Zhou served as the executive director and executive vice president of Royal China International
Holdings Limited. From December 2015 to March 2017, Mr. Zhou served as the press spokesperson of LeTV Holding Group. From February 2012
to November 2015, Mr. Zhou served as the deputy director of the Theory and Commentary Department of Nanfang Daily. Mr. Zhou obtained
his Master of Public Administration from Nanyang Technological University in Singapore in 2014 and his Bachelor of Arts degree from Huazhong
University of Science and Technology in Hubei, China in 2004.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Jining
Li (Independent Director until August 2021).</i></b>&#160;Mr. Li has served as a Director of our Board&#160;since September 2018 and
since the closing of the Business Combination he has been an Independent Director of our Board. Mr. Li has been a director of Goldenbridge
Acquisition Limited since August 2020. Mr. Li is the Founder and has acted as the Chairman of Star Jet Co., Ltd in Shanghai, China, since
2009. Mr. Li has also been the Chairman of Keen Nice Communications Limited since 2006. Prior to Star Jet, Mr. Li founded United Eagle
Airlines as the first non-government-owned airline company in the history of Chinese aviation industry in 2004. From 2004 to 2008, Mr.
Li was the Chairman of United Eagle Airlines. He served as the Chairman of China Internet Investment Finance Holdings Limited (HKEx:
00810) from 2005 to 2007. In 2004, He was named as the Top Ten Most Influential People in China for his pioneer achievements in aviation
industry. In 1998, Mr. Li founded Guangdong Ying Lian Tong Telecommunication Services Co., Ltd and served as Chairman until 2004. From
1990 to 1998, Mr. Li served as Chairman of Huahui Import and Export Trading Company. From 1988 to 1990, Mr. Li served as a manager in
Guangdong Branch of China Council for the Promotion of International Trade. We believe that Mr. Li is qualified to sit on our board due
to his many years of public company management and director experience, along with his expertise in strategic planning, corporate financing
and business development.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Huifeng
Chang</i></b>. Mr. Chang has served as an Independent Director of our Board since May 2020. He has extensive experience in business supervision
and management. Since 2016, Mr. Chang has served as the chief financial officer and overseen a finance/accounting/tax/auditing staff
of 200 people at Canadian Solar Inc., a global company with $4 billion revenue across more than 20 countries. Mr. Chang has also been
a partner at Artis Consulting LLC since 2017 and a director at Aquamarine Capital Management LLC since 2015. From 2010 to 2015, Mr. Chang
was the head of trading at CICC US Securities, Inc.&#8217;s Equity Trading department and oversaw an equity trading desk that serves
over 300 institutional investors in the U.S. and over 50 institutional investors in China/Hong Kong SAR. From 2008 to 2010, Mr. Chang
was the CEO at China Southern Oriental Patron (CSOP) Asset Management, a company he started from scratch and led to full operation. From
2000 to 2008, Mr. Chang was an equity prop trader at Citigroup Global Capital Markets. Before that, he worked as a derivative and risk
modeler at Kamakura Corporation in Honolulu for a year. From 1995 to 1999, he served as a marketing manager at Philip Services Corporation
in Honolulu. Mr. Chang graduated from Nanjing Agricultural University with a Bachelor of Science in Soil Science and Agri-chemistry and
from the Chinese Academy of Science with a Master of Science in Soil Physics. He earned his Ph.D. in Soil Physics in 1991 and MBA in
1995 from the University of Hawaii. We believe Mr. Chang is qualified to serve as an independent director because he is experienced in
company management and business development.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Jian
Sun</i></b>. Mr. Sun has served as an Independent Director of our Board since May 2020. He has extensive experience in the accounting
field, both in academia and in practice. Mr. Sun is a Certified Public Accountant and has published articles in the field of accounting,
business finance, and corporate governance. <span>He has served as an independent director at Beijing
CTID Industry Operation &amp; Management Co., Ltd. and at Innovita Biological Technology Co., Ltd. </span>Since 2017, Mr. Sun has been
a professor in the School of Accountancy at Central University of Finance and Economics in China (the &#8220;CUFE&#8221;). Since September
2016, he has also served as the vice dean at the CUFE. From 2009 to 2017, Mr. Sun taught at the CUFE, first as an assistant professor
and then as an associate professor. Since 2017, he has served as an independent director at Founder Financing Services Company Limited
and at Huadian Energy Company Limited. From 2015 to 2018, he served as an independent director at Panda Financial Company Limited. He
also holds part-time academic positions at the Accounting Information Committee of Accounting Society of China and Accounting Information
Standardization Committee of the China Ministry of Finance. Mr. Sun earned his bachelor&#8217;s degree and master&#8217;s degree in accounting
from Southeast University&#8217;s Economic and Management School in 2003 and 2006, respectively. He obtained his Ph.D. in accounting
from Renmin University in 2009. From 2015 to 2016, he was a visiting scholar at Eli Broad Business School, Michigan State University.
We believe Mr. Sun is qualified to serve as an independent director because he has a deep understanding of accounting and has also served
as an independent director at various companies before.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Yibing
Liu</i></b>. Mr. Liu has served as an Independent Director of our Board since May 2020. He has rich experience and expertise with technology,
sales, strategy, and business development in the technology industry and in private equity and venture capital investment. Mr. Liu has
been the founder and the executive director of Xinjiang Holgus Enkeer IT Co., Ltd. and Xiamen Huachanghui Investment Co. Ltd. since 2017
and 2016, respectively. Mr. Liu has been the partner of Beijing Wuyue Yuanhang Venture Capital LLP and Tianjin Haiyin Private Investment
Fund LLP since 2015 and 2011, respectively. Mr. Liu received his master&#8217;s degree from Peking University. We believe Mr. Liu is
qualified to serve as an independent director because he has practical experience and expertise in managing technology companies.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Voting
Agreement</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Upon
the closing the Business Combination, we, Oriental Holdings Limited (the &#8220;Sponsor&#8221;), Lavacano and WBY entered into a six-year
Voting Agreement, which, among others, provides (i) Lavacano and WBY have the right to designate (A) 2 directors before the third anniversary
of the closing date and 3 directors thereafter and (B) 3 independent directors throughout the six-year term, and (ii) Sponsor has the
right to designate (A) 1 director until the third anniversary of the closing date and (B) 1 independent director throughout the six-year
term. The parties to the Voting Agreement agreed to vote in favor of election of the foregoing designees. For additional information
about such arrangement, please see &#8220;Item 7. Major Shareholders and Related Party Transaction&#8212;B. Related Party Transactions.&#8221;</span></p><div>

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</div><div><a id="b_026"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Compensation of Directors
    and Executive Officers</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Executive
Officers Compensation of Scienjoy Inc. for the Last Full Financial Year</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">For
the fiscal year ended December 31, 2022, we paid an aggregate of RMB1.9 million (US$0.3 million) in cash to our directors and executive
officers, and we paid an aggregate of RMB1.4 million cash compensation to certain of our non-executive directors. We have not set aside
or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries,
variable interest entities and their subsidiaries are required by law to make contributions equal to certain percentages of each employee&#8217;s
salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident
fund. For share incentive grants to our directors and executive officers, see &#8220;&#8212;Equity Incentive Plan.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Equity
Incentive Plan</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
February 8, 2021, the Board of the Company approved the 2021 Plan, for the purpose of to providing additional incentives to employees,
directors and consultants and to promote the success of the Company&#8217;s business. The 2021 Plan authorized the Board, any committee
appointed by Board, or any such person authorized by the Board or such committee, to grant equity incentive awards, including options,
restricted shares, and restricted share units to directors, employees and consultants of the Company for a number of Class A ordinary
shares not exceeding 3,000,000, subject to adjustments as may be required in accordance with the terms of the Plan. The vested portion
of equity awards will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. The maximum
exercisable term is ten years from the date of a grant. Late in 2022, the Company repurchased 794,120 restricted shares units. As of
the date of this report, a total of 2,115,283 restricted share units has been granted under 2021 Plan.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following paragraphs summarize the terms of the 2021 Plan.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Types
of Awards</i>. The 2021 Plan permits the awards of options, restricted shares and restricted share units.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Plan
Administration</i>. The 2021 Plan is administered by our Board or committee or individuals authorized by our Board. The plan administrator
is entitled to determine the participants who are to receive awards, the number of awards to be granted, and the terms and conditions
of each award grant.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Eligibility</i>.
Employees, directors and the consultants of our company and any Related Entity (as defined in the 2021 Plan) are eligible to participate
pursuant to the terms of the 2021 Plan.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Conditions
of Award</i>. Subject to the terms of the Plan, the plan administrator shall determine the provisions, terms, and conditions of each
award including, but not limited to, the award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions,
form of payment (cash, shares, or other consideration) upon settlement of the award, payment contingencies, and satisfaction of any performance
criteria.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Term
of Award</i>. The term of each award shall be fixed by the administrator and is stated in the award agreement between recipient of an
award and us. No award shall be granted under the 2021 Plan after ten years from the date the 2021 Plan was approved by the board.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Vesting
Schedule</i>. In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Termination
and Amendment</i>. Unless terminated earlier, the 2021 Plan has a term of 10 years. The plan administrator has the authority to amend
or terminate the 2021 Plan, provided that, such termination or amendment shall not adversely affect in any material way any awards previously
granted unless agreed by the relevant grantee.</span></p><div>

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</div><div><a id="b_027"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Board Practices</b></span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are managed by a Board which currently consists of seven directors. Our Fourth Amended and Restated Memorandum and Articles of Association
provides that the minimum number of directors shall be two and there shall be no maximum number of directors. Subject to the Voting Agreement,
the directors shall be elected by Resolution of Shareholders or, where permitted by our Fourth Amended and Restated Memorandum and Articles
of Association, by Resolution of Directors. Pursuant to the respective director service agreement, the current directorship term of each
of our current non-executive directors (including the independent directors) shall expire on the earlier of the date of the next annual
stockholders meeting and the earliest of the following to occur: (a) the death of the director; (b) the termination of the director from
his membership on the Board by the mutual agreement of us and the director; (c) the removal of the director from the Board in accordance
with our governing documents; and (d) the resignation by the director from the Board.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Employment
Agreements</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Prior
to the closing of the Business Combination, we had not entered into any employment agreements with our executive officers, and had not
made any agreements to provide benefits upon termination of employment. Our current executive officers have entered into employment agreements
with certain of our operating subsidiaries. These agreements each contain customary terms, including each executive officer&#8217;s salary,
bonus, duties, employment benefits, noncompetition, non-solicitation, confidentiality of information, assignment of inventions and intellectual
property, and termination. Either party may terminate these employment agreements with either thirty days&#8217; written notice to the
other party as specified in the respective agreements, or we may elect to terminate any of these service agreements and make a one-month
payment in lieu of notice. We may also terminate an executive officer&#8217;s employment for certain causes, at any time, without prior
notice or compensation. The foregoing description of the terms of the employment agreements is qualified in its entirety by reference
to the provisions of the Employment Agreements filed as Exhibit 4.9 to 4.12 to this annual report on Form 20-F, which is incorporated
herein by reference.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Director
Service Agreements</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
connection with their election as our directors, each of our current non-executive directors (including the independent directors) has
entered into a standard director service agreement (the &#8220;Form Director Service Agreement&#8221;) with us, pursuant to which (a)
such director will be entitled to annual cash retainers and/or equity incentive plans (which have yet to be established), (b) we agreed
to indemnify its directors to the fullest extent authorized in our governing documents and applicable law, and such indemnity only applies
if the director acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, we had no
reasonable cause to believe that the director&#8217;s conduct was unlawful; and (c) the directorship term will expire at the next annual
stockholders meeting, subject to earlier extraordinary events. The foregoing description of the terms of the Form Director Service Agreement
is qualified in its entirety by reference to the provisions of the Form Director Service Agreement filed as Exhibit 4.8 to this annual
report, which is incorporated herein by reference.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Committees
of the Board of Directors</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
are three standing committee of our Board: the Audit Committee, the Nominating Committee and the Compensation Committee. The composition
of each committee are described below:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audit Committee: Jian Sun
    (Chairperson), Huifeng Chang, and Yibing Liu;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nominating Committee: Huifeng
    Chang (Chairperson), Jian Sun, and Yibing Liu; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Compensation Committee:
    Yibing Liu (Chairperson), Huifeng Chang, and Jian Sun.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
members of each committee are all &#8220;independent&#8221; under the Nasdaq&#8217;s listing standards. Mr. Chang is also a &#8220;financial
expert&#8221; under the listing requirements of Nasdaq.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Audit Committee, which is established in accordance with Section 3(a)(58)(A) of the Exchange Act, engages our independent accountants,
reviewing their independence and performance; reviews our accounting and financial reporting processes and the integrity of its financial
statements; the audits of our financial statements and the appointment, compensation, qualifications, independence and performance of
our independent auditors; our compliance with legal and regulatory requirements; and the performance of our internal audit function and
internal control over financial reporting.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Nominating Committee is responsible for overseeing the selection of persons to be nominated to serve on our Board. Specifically, the
Nominating Committee makes recommendations to the Board regarding the size and composition of the Board, establishes procedures for the
director nomination process and screens and recommends candidates for election to the Board. On an annual basis, the Nominating Committee
recommends for approval by the Board certain desired qualifications and characteristics for board membership. Additionally, the Nominating
Committee establishes and administers a periodic assessment procedure relating to the performance of the Board as a whole and its individual
members. The Nominating Committee will consider a number of qualifications relating to management and leadership experience, background
and integrity and professionalism in evaluating a person&#8217;s candidacy for membership on the Board. The Nominating Committee may
require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to
time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The
nominating committee does not distinguish among nominees recommended by shareholders and other persons.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Compensation Committee reviews annually our corporate goals and objectives relevant to the officers&#8217; compensation, evaluates the
officers&#8217; performance in light of such goals and objectives, determines and approves the officers&#8217; compensation level based
on this evaluation; makes recommendations to the Board regarding approval, disapproval, modification, or termination of existing or proposed
employee benefit plans, makes recommendations to the Board with respect to non-CEO and non-CFO compensation and administers our incentive-compensation
plans and equity-based plans. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees as
it may deem appropriate in its sole discretion. Our chief executive officer of may not be present during voting or deliberations of the
Compensation Committee with respect to his compensation. our executive officers do not play a role in suggesting their own salaries.
Neither we nor the Compensation Committee has engaged any compensation consultant who has a role in determining or recommending the amount
or form of executive or director compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><div><a id="b_028"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_029"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following tables sets forth information regarding the beneficial ownership of the Company&#8217;s ordinary shares:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Unless
otherwise indicated, the Company believes that all persons named in the table have, immediately prior to the date of the report, sole
voting and investment power with respect to all of the Company&#8217;s securities beneficially owned by them.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Beneficial
ownership is determined in accordance with SEC rules and includes voting or investment power with respect to securities. Except as indicated
by the footnotes below, we believe, based on the information furnished to it, that the persons and entities named in the table below
have, immediately prior to the date of this report, sole voting and investment power with respect to all stock that they beneficially
own, subject to applicable community property laws. All Company stock subject to options or warrants exercisable within 60 days of the
consummation of this report are deemed to be outstanding and beneficially owned by the persons holding those options or warrants for
the purpose of computing the number of shares beneficially owned and the percentage ownership of that person. They are not, however,
deemed to be outstanding and beneficially owned for the purpose of computing the percentage ownership of any other person.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
percentages in the table are based on 37,679,786 shares of Class A ordinary shares and 2,925,058 shares of Class B ordinary shares and
6,023,700 warrants outstanding as of April 18, 2023, assuming none of the warrants have been exercised. In calculating this percentage
for a particular holder, we treated as outstanding the number of our Class A ordinary shares issuable upon exercise of that particular
holder&#8217;s warrants and did not assume exercise of any other holder&#8217;s warrants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"></td><td style="text-align: left">*</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"></td><td style="text-align: left">*</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"></td><td style="text-align: left">*</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Wolter Global Investment Limited (4)** &#160; </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4,269,114</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4,269,114</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">10.51</td><td style="text-align: left">%</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">WBY Entertainment Holdings Ltd. (3) (5)** &#160; </td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,968,308</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4.85</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.94</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Heshine Holdings Limited (2)** &#160; </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,032,208</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,925,058</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7,957,266</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">19.60</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">51.22</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in">Tongfang Stable Fund (6)** &#160; </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">12,113,334</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">12,113,334</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">29.83</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">18.10</td><td style="text-align: left">%</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span>&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">* </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less than 1% </span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">** </span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The share numbers of each of these shareholders are
    based on the most recent Schedule 13D filed by such shareholder. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 16.2pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1) </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless otherwise indicated,
    the business address of each of the individuals is c/o Scienjoy Holding Corporation RM1118, 11th Floor, Building 3, No. 99 Wangzhou
    Rd., Liangzhu St., Yuhang District, Hangzhou, Zhejiang Province, P.R. China. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 16.2pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2) </span></td>
    <td style="font-family: Times New Roman, Times, Serif; padding-right: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
    Xiaowu He owns 100% equity interest in Heshine Holdings Limited. He has the sole voting and dispositive power over the securities
    held by Heshine Holdings Limited. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3) </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Bo Wan has sole voting
    and dispositive power over the shares owned by WBY Entertainment Holdings Ltd. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; padding-right: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    address of Wolter Global Investment Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British
    Virgin Island.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; padding-right: 2pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; padding-right: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    address of WBY Entertainment Holdings Ltd. is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British
    Virgin Islands.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; padding-right: 14pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;The
    address of Tongfang Stable Fund is Unit 2102-3, Golden Centre, 188 Des Voeux Road, Central, Hong Kong.&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 119; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->110<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 16.2pt"><span style="font-family: Times New Roman, Times, Serif">As
of April 18, 2023, 20,173,839 of our Class A Ordinary Shares are held by record holders in the United States.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_030"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Disclosure of a Registrant&#8217;s
    Action to Recover Erroneously Awarded Compensation</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_032"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Major Shareholders</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Please
refer to &#8220;Item 6. Directors, Senior Management and Employees&#8212;E. Directors, Senior Management and Employees&#8212;Share Ownership.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_033"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Related Party Transactions</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following discussion is a brief summary of certain material arrangements, agreements and transactions we have with related parties.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Insider
Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
July&#160;2018, the Company issued an aggregate of 1,150,000 founder shares to the shareholders immediately prior to the date of certain
S-1 registration statement filed by Wealthbridge Acquisition Limited in 2019 (the &#8220;Initial Shareholders&#8221;) for an aggregate
purchase price of&#8201;$25,100 in cash. On October 15, 2018, the Company effected a 5 for 4 stock split of its Class A ordinary shares,
resulting in 1,437,500 founder shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock
split. The founder shares included an aggregate of up to 187,500 shares subject to forfeiture by the Initial Shareholders to the extent
that the underwriters&#8217; over-allotment is not exercised in full or in part, so that the Initial Shareholders would collectively
own 20% of the Company&#8217;s issued and outstanding shares after the IPO (assuming the Initial Shareholders did not purchase any Public
Shares in the IPO and excluding the Private Units and underlying securities). In connection with the underwriters&#8217; exercise of
the over-allotment option in full on February 20, 2019, 187,500 founder shares are no longer subject to forfeiture.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Initial Shareholders have agreed not to transfer, assign or sell any of the founder shares (except to certain permitted transferees)
until (1) with respect to 50% of the founder shares, the earlier of six months after the completion of a business combination and the
date on which the closing price of the Class A ordinary shares equals or exceeds $12.50 per share for any 20 trading days within any
30-trading day period commencing after a Business Combination and (2) with respect to the remaining 50% of the founder shares, six months
after the completion of a business combination, or earlier, in either case, if, subsequent to a business combination, the Company completes
a liquidation, merger, share exchange or other similar transaction which results in all of the Company&#8217;s shareholders having the
right to exchange their Class A ordinary shares for cash, securities or other property.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Private
Placements</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 247,500 Private Units at a price of $10.00 per Private Unit, or $2,475,000
in the aggregate. On February 20, 2019, in connection with the underwriters&#8217; exercise of the over-allotment option in full, the
Sponsor purchased an additional 22,500 Private Units for an aggregate purchase price of $225,000. The proceeds from the Private Units
were added to the proceeds from the IPO held in the trust account. The Private Units are identical to the units sold in the IPO except
the Private Units will be non-redeemable. In connection with the closing of the Business Combination, these units were converted into
297,000 shares and 135,000 warrants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Registration
Rights Agreements</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
connection with our IPO, we, the Initial Shareholders and Sponsor entered into a registration right agreement, pursuant to which the
holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the
majority of the Initial Shares can elect to exercise these registration rights at any time commencing three months prior to the date
on which these Class A ordinary shares are to be released from escrow. The holders of a majority of the Sponsor Shares can elect to exercise
these registration rights at any time after we consummate a business combination. In addition, the Initial Shareholders and Sponsor have
certain &#8220;piggy-back&#8221; registration rights with respect to registration statements filed subsequent to our consummation of
a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Chardan
Capital Markets, LLC (&#8220;Chardan&#8221;), our underwriter during our IPO, has joined this registration right agreement with respect
to the 402,983 Class A Ordinary Shares issued to Chardan by the Company in full satisfaction of the deferred underwriting commission.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, in connection with the Business Combination, we, Lavacano and WBY entered into a registration rights agreement, providing for
the registration of the Class A ordinary shares issued to Lavacano and WBY pursuant to the terms of the Share Exchange Agreement (&#8220;Merger
Shares&#8221;). Pursuant to the registration rights agreement, at any time on and after May 7, 2020, Lavacano and WBY are entitled to
(i) make up to two written demand for registration under the Securities Act of all or part of the Merger Shares, and (ii) certain &#8220;piggy-back&#8221;
registration rights with respect to registration statements filed following the consummation of the Business Combination. We will bear
the expenses incurred in connection with the filing of any such registration statements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Voting
Agreement</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
connection with the Business Combination, the Sponsor, Lavacano, WBY and we have entered into a six year Voting Agreement, which provides
that after the closing of the Business Combination and as promptly as practicable following the determination that we qualify as a Foreign
Private Issuer, each party to the Voting Agreement agrees to vote to reclassify our Ordinary Shares into class A and class B ordinary
shares and convert a certain amount of class A ordinary shares to class B ordinary shares. The Voting Agreement further provides that
(i) Lavacano and WBY have the right to designate (A) 2 directors before the third anniversary of the closing date and 3 directors thereafter
and (B) 3 independent directors throughout the six-year term, and (ii) Sponsor has the right to designate (A) 1 director until the third
anniversary of the closing date and (B) 1 independent director throughout the six-year term and the parties to the Voting Agreement must
vote in favor of such election of directors.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Indemnification
Agreements</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Effective
as of the closing date of the Business Combination, we entered into indemnification agreements with certain of our directors. Each indemnification
agreement provides that, subject to limited exceptions, and among other things, we will indemnify the director to the fullest extent
permitted by law for claims arising in his or her capacity as our director.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Additional
Earn-out Shares for Lavacano and WBY</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the Share Exchange Agreement, Lavacano and WBY may be entitled to receive additional earn-out shares as follows: (1) if the Company&#8217;s
net income before tax for the year ended December 31, 2020 is greater than or equal to either US$28,300,000 or RMB 190,000,000, Lavacano
and WBY will be entitled to receive 3,000,000 Class A ordinary shares of SHC (subject to the reclassification of our Class A Ordinary
shares as described in more details under Section &#8220;Voting Agreement&#8221; above); and (2) if the Company net income before tax
for the year ended December 31, 2021 is greater than or equal to either US$35,000,000 or RMB 235,000,000, Lavacano and WBY will be entitled
to receive 3,000,000 Class A Ordinary Shares (subject to the reclassification of our Class A Ordinary shares as described in more details
under Section &#8220;Voting Agreement&#8221; above). The Company&#8217;s net income before tax has achieved more than RMB 190,000,000
for the year ended December 31, 2020, therefore the Company has issued 2,400,000 Class A Ordinary Shares to Lavacano and 600,000 Class
A Ordinary Shares to WBY on March 25, 2021.The Company&#8217;s net income before taxes has achieved more than 235,000,000 for the year
ended December 31, 2021, therefore, the Company was approved to subsequently issue the related earnout shares in 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Notwithstanding
the net income before tax achieved by the Company for any period, Lavacano and WBY will receive (i) 3,000,000 earn-out shares if the
Company&#8217;s share price is higher than $20.00 for any sixty days in any period of ninety consecutive trading days between the 13th
month and 24th month following the Business Combination, and (ii) 3,000,000 earn-out shares if the Company&#8217;s share price is higher
than $25.00 for any sixty days in any period of ninety consecutive trading between the 25th month and 36th month following the Business
Combination.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Lavacano
has agreed to distribute to Heshine and TFSF all the earnout shares it has and will receive from the Company: 60% of the earnout shares
it receives from the Company to TFSF and 40% of the earnout shares to Heshine.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Unit
Purchase Option with Chardan</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
sold Chardan, for $100, an option to purchase up to a total of 431,250 units exercisable, in whole or in part, at $11.50 per unit (or
an aggregate exercise price of $4,959,375) commencing on the later of the consummation of the Business Combination. Since the rights
underlying the units automatically converted into Class A Ordinary Shares upon our Business Combination, the option effectively represents
the right to purchase 474,375 Class A Ordinary Shares. The purchase option also represents 431,250 warrants to purchase 215,625 Class
A Ordinary Shares, for $2,479,687.5. The purchase option may be exercised for cash or on a cashless basis, at the holder&#8217;s option,
and expires five years on February 5, 2024. The option grants to holders demand and &#8220;piggy back&#8221; rights for periods of five
and seven years, respectively, from the date of our IPO of the securities directly and indirectly issuable upon exercise of the option.
The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the
event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted
for issuances of Class A ordinary shares at a price below its exercise price.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
of the date of this report, Chardan has exercised a portion of its Unit Purchase Option to purchase 100,000 units of the Company, and
the Company has issued 110,000 Class A Ordinary Shares and 100,000 warrants to Chardan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Additional
Earn-out Shares for Cosmic Soar Limited</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the earn-out provisions of the BeeLive Acquisition Agreement, so long as the prior core management members of BeeLive group have complied
with the employment agreement that he or she has entered into with BeeLive group and no material changes have occurred, (i) if the BeeLive
group&#8217;s total annual revenue is no less than RMB 336.6 million in Year 2020, Cosmic Soar Limited will be entitled to received additional
540,960 Class A Ordinary Shares; (ii) if the BeeLive group&#8217; total annual revenue is no less than RMB 460.6 million in Year 2021,
Cosmic Soar Limited will be entitled to received additional 540,960 Class A Ordinary Shares; and (iii) if the BeeLive group&#8217; total
annual revenue is no less than RMB 580.9 million in Year 2022, Cosmic Soar Limited will be entitled to received additional 540,960 Class
A Ordinary Shares. If the total annual revenue of BeeLive group in a particular performance year does not reach the target revenue as
specified above, but is equal to or more than 80% of the target revenue, Cosmic Solar Limited will be entitled to a reduced number of
the earn-out shares. BeeLive group&#8217;s total annual revenue has achieved more than RMB 336.6 million for Year 2020, therefore the
Company has issued 540,960 Class A Ordinary Shares to Cosmic Soar Limited on March 25, 2021. BeeLive group&#8217;s total annual revenue
has achieved more than RMB 460.0 million for Year 2021, therefore, the Company was approved to subsequently issue the 540,960 earnout
shares in 2022. Since BeeLive group&#8217;s total annual revenue only reached more than 80% of the target revenue in 2022 but less than
100% of the target revenue in 2022, the Company was approved to issue 507,804 shares in 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Resale
Lock-up Agreement with Cosmic Soar Limited</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
connection with the Beelive Acquisition, we entered into a Resale Lock-Up Agreement with Cosmic Soar Limited (&#8220;Cosmic&#8221;) on
September 10, 2020, providing that Cosmic will not, within 365 calendar days from the date thereof, offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any of the lock-up shares (including (i) 3,786,719 Class A ordinary shares issued to
Cosmic at the closing of the BeeLive Acquisition, and (ii) any Class A ordinary shares acquired during the lock-up period, if any), enter
into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of such shares, whether any of these transactions are to be settled by delivery of
any such shares, in cash, or otherwise, publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into
any transaction, swap, hedge or other arrangement, or engage in any short sales, as defined in Rule 200 under Regulation SHO under the
Exchange Act, with respect to any securities of the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Resale
Lock-up Agreement with Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
connection with the Hongle Acquisition, we entered into a Resale Lock-Up Agreement with Weilaijin Industry Investment Fund Partnership
(Limited Partnership) (&#8220;Weilaijin&#8221;) on Jan. 1, 2022, providing that Weilaijin will not, within 180 calendar days from the
date of issuance of Class A ordinary shares of the Company, offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any of the lock-up shares (including (i) 636,691 Class A ordinary shares issued to Weilaijin at the closing of the Hongle
Acquisition, and (ii) any Class A ordinary shares acquired during the lock-up period, if any), enter into a transaction that would have
the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of such shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise,
publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other
arrangement, or engage in any short sales, as defined in Rule 200 under Regulation SHO under the Exchange Act, with respect to any securities
of the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Resale
Lock-up Agreement with Wolter Global Investment Limited</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
connection with the Hongle Acquisition, we entered into a Resale Lock-Up Agreement with Wolter Global Investment Limited (&#8220;Wolter
Global&#8221;) on Jan. 1, 2022, providing that Wolter Global will not, within 180 calendar days from the date of issuance of Class A
ordinary shares of the Company, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the lock-up
shares (including (i) 3,898,511 Class A ordinary shares issued to Wolter Global at the closing of the Hongle Acquisition, and (ii) any
Class A ordinary shares acquired during the lock-up period, if any), enter into a transaction that would have the same effect, or enter
into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such
shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise, publicly disclose
the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or
engage in any short sales, as defined in Rule 200 under Regulation SHO under the Exchange Act, with respect to any securities of the
Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 122; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Additional
Earn-Out Shares for Wolter Global</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the earn-out provisions of the Equity Acquisition Framework Agreement, so long as the prior core management members of Golden Shield
and/or Weiliantong group have complied with the employment agreement that he or she has entered into with Golden Shield and/or Weiliantong
group and no material changes have occurred, (i) if the Golden Shield and/or Weiliantong group&#8217;s total annual revenue is no less
than RMB 280 million in Year 2022, Wolter Global will be entitled to received additional 487,314 Class A Ordinary Shares; and (ii) if
the Golden Shield and/or Weiliantong group&#8217; total annual revenue is no less than RMB 360 million in Year 2023, Wolter Global will
be entitled to received additional 487,314 Class A Ordinary Shares. If the total annual revenue of Golden Shield and/or Weiliantong group
in a particular performance year does not reach the target revenue as specified above, but is equal to or more than 80% of the target
revenue, Wolter Global will be entitled to a reduced number of the earn-out shares. Golden Shield and/or Weliantong group&#8217;s total
annual revenue achieved more than RMB 280 million for Year 2022, therefore, the Company was approved to issue the 487,314 earnout shares
in 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Contractual
Arrangements with VIEs and the Shareholders of the VIEs</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Please
see &#8220;Item 4. Information on the Company&#8212;A. History and Development of the Company, and Item 4. Information on the Company&#8212;Organizational
Structure.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Other
Transactions with Related Parties</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
principal related parties with which the Company had transactions during the years presented are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font-family: Times New Roman, Times, Serif; width: 50%; border-bottom: black 1.5pt solid; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name
    of Related Parties</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 49%; border-bottom: black 1.5pt solid; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Relationship
    with the Company</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mr. He Xiaowu</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chief Executive Officer
    and Chairman of the Board</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sixiang Times (Beijing)
    Technology Co., Ltd.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Where the Company&#8217;s
    executive is one of the major shareholders</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Beijing Junwei Technology
    Co., Ltd.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Controlling shareholder
    of SG and HX</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Beijing WanPu Century
    Technology Co Ltd</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subsidiary
    company of Beijing NQ Mobile Inc., which was holding company of Sixiang Times (Beijing) Technology Co., Ltd</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Lavacano Holdings Limited</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Where Mr. He Xiaowu
    acted as director</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ENMOLI INC</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Where Mr. He Xiaowu
    acted as director</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dingsheng
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    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Controlled by a direct
    relative of CEO</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; ">
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chengdu
    Brightfututure Education Technology Co., Ltd</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Controlled by a direct
    relative of CEO</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Purchases
from related parties</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">For
the years ended December 31, 2020, 2021 and 2022, significant related party transactions were as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td style="border-bottom: Black 1.5pt solid">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">RMB</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 30%; text-align: left; text-indent: -9pt; padding-left: 9pt">Sixiang Times (Beijing) Technology Co., Ltd.</td><td style="width: 1%">&#160;</td>
    <td style="width: 21%; text-align: left">Rental and service fees</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">2,106</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">ENMOLI INC</td><td>&#160;</td>
    <td style="text-align: left">Interest expense</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">480</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)</td><td>&#160;</td>
    <td style="text-align: left">Interest income</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">462</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 123; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->114<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Balances
with related parties</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2021 and 2022, the amounts due from/to related parties are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td style="font-weight: bold">Amount due from related parties</td><td>&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The balance represented
    loan receivable balance from Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership). The loan
    was interest free and due on December 31, 2022. The loan was collected on March 16, 2023 subsequently.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 5, 2021, the Company entered into a US dollar borrowing agreement with Enmoli Inc, a company controlled by Mr. Xiaowu He, the
Chairman and chief executive officer of the Company. Pursuant to the agreement, the Company borrowed US$ 2 million from Enmoli Inc. with
a term of 1 year and an annual interest of 4%. The purpose of the borrowing is to provide sufficient US dollar funds for the Company&#8217;s
oversee business development. The amount was offset with the amount loaned to Dingsheng Taifu (Tianjin) Business Information Consulting
Partnership (Limited Partner).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 5, 2021, the Company loaned RMB 13 million (or approximately US$2 million) to Dingsheng Taifu (Tianjin) Business Information
Consulting Partnership (Limited Partner), an entity related to Mr. Xiaowu He, the Chairman and chief executive officer of the Company
for a term of 1 year with an annual interest of 4%. The amount was offset with the amount loaned from Enmoli Inc. After the offset, balance
due from Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partner) was RMB 1.1 million as of December 31,
2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
January 11, 2021, the Company entered into a share purchase agreement (the &#8220;Share Purchase Agreement&#8221;) with Cross Wealth
Investment Holding Limited (&#8220;Cross Wealth&#8221;), an entity related to two directors of the Company. Pursuant to the Share Purchase
Agreement, the Company purchased 606,061 ordinary shares (&#8220;Shares&#8221;) of Goldenbridge Acquisition Limited (&#8220;Goldenbridge&#8221;)
from Cross Wealth for an aggregated consideration of US$ 2 million or US$3.3 per share (the &#8220;Share Price&#8221;). Goldenbridge
was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization
or similar business combination with one or more businesses or entities (&#8220;De-SPAC&#8221;) and is currently conducting an initial
public offering of its securities (&#8220;Offering&#8221;). The Company&#8217;s share purchase is for investment purposes only and will
not participate in any activities conducted by Cross Wealth in its capacity as the sponsor, promotor or similar role in connection with
the Offering or the De-SPAC. If the Goldenbridge fails to consummate the Offering prior to June 30, 2021 or other date as mutually agreed
by the Seller and the Company, the Company shall have the rights in its discretion, but not the obligation, to cause the Seller to repurchase
back all or a portion of the Shares at the Share Price at any time. If Goldenbridge fails to consummate a De-SPAC within 21 months after
the consummation of the Offering, the Buyer shall have the rights in its discretion, but not the obligation, to cause the Seller to repurchase
back all or a portion of the Shares at the Share Price at any time. In addition, at any time before the eighteenth month anniversary
of the completion of De-SPAC, if the Company plans to resell or otherwise transfer any portion or all of the shares at a price less than
the Share Price, the Seller shall have the right in its discretion, but not the obligation, to repurchase back all or a portion of the
Shares at the Share Price (&#8220;Right of First Refusal&#8221;). In the event that Seller opts not to exercise its Right of First Refusal,
then the Seller shall pay the Company an amount equal to (i) the price shortfall multiplied by (ii) the number of the Shares being resold
or transferred; provided that in case of a privately negotiated sale, such transfer or resale shall be negotiated in good faith and at
arm&#8217;s-length by parties of equal bargaining strength.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Related
Party Policy</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
Code, requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests,
except under guidelines approved by the board of directors (or the audit committee). A conflict of interest situation can arise when
a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts
of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her
position.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
audit committee, pursuant to its written charter, is responsible for reviewing any conflicts of interest and related-party transactions
to assess an impact on the Company&#8217;s internal controls on financial reporting and disclosure.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a
conflict of interest on the part of a director, employee or officer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Board
Diversity Matrix</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td colspan="16" style="font-weight: bold; text-align: center">Board Diversity Matrix (As of April 18, 2023)</td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="16" style="font-weight: bold; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Country of Principal Executive Offices</td><td>&#160;</td>
    <td colspan="13" style="text-align: justify">China</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Foreign Private Issuer</td><td>&#160;</td>
    <td colspan="13" style="text-align: justify">Yes</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Disclosure Prohibited Under Home Country Law</td><td>&#160;</td>
    <td colspan="13" style="text-align: justify">No</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="width: 52%; text-align: justify; padding-bottom: 1.5pt">Total Number</td><td style="width: 1%">&#160;</td>
    <td style="width: 9%; text-align: left">7</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt">&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td colspan="16" style="font-weight: bold; text-align: justify">Part I: Gender Identity</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt">Directors</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td colspan="16" style="font-weight: bold; text-align: justify">Part II: Demographic Background</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_034"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Interests of Experts
    and Counsel</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_035"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
8. FINANCIAL INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_078"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Consolidated Statements
    and Other Financial Information</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Please
refer to Item 18 &#8220;Financial Statements&#8221; for our audited consolidated financial statements filed as part of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Legal
Proceedings</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or
administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding,
regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management&#8217;s time
and attention. See &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8212;Risk Factors Relating to Our Business and Industry&#8212;We
may be held liable for information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if
such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us,&#8221; and &#8220;Item
3. Key Information&#8212;D. Risk Factors&#8212;Risk Factors Relating to Our Business and Industry&#8212;We may be subject to intellectual
property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked
to our platforms, or distributed to our users, or for proprietary information appropriated by former employees, which may materially
and adversely affect our business, financial condition and prospects.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Dividend
Policy</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Since
inception, we have not declared or paid any dividends on our Class A ordinary shares. We do not have any present plans to pay any dividends
on our Class A ordinary shares in the foreseeable future. We intend to retain most, if not all, of our available funds and any future
earnings to operate and expand our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including
our future operations and earnings, capital requirements and surplus, general financial condition, contractual and legal restrictions
and other factors that the board of directors may deem relevant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 125; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->116<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a company formed under the laws of the British Virgin Islands and all of operations are currently in the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
British Virgin Islands law, we may only pay dividends from surplus (the excess, if any, at the time of the determination of the total
assets of our company over the sum of our liabilities, as shown in our books of account, plus our capital), and we must be solvent before
and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary course
of business; and the realizable value of assets of our company will not be less than the sum of our total liabilities, other than deferred
taxes as shown on our books of account, and our capital.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
order for us to distribute any dividends to our shareholders, we currently would have to on dividends distributed by our PRC subsidiaries.
Certain payments from our PRC subsidiaries to us may be subject to PRC withholding income tax. In addition, regulations in the PRC currently
permit payment of dividends of a PRC company only out of accumulated distributable after-tax profits as determined in accordance with
its articles of association and the accounting standards and regulations in China. Each of our PRC subsidiaries is required to set aside
at least 10% of its after-tax profit based on PRC accounting standards every year to a statutory common reserve fund until the aggregate
amount of such reserve fund reaches 50% of the registered capital of such subsidiary. Such statutory reserves are not distributable as
loans, advances or cash dividends.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_079"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Significant Changes</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Except
as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_036"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
9. THE OFFER AND LISTING</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_037"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Offer and Listing Details</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">See
&#8220;&#8212;C. Markets.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_038"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Plan of Distribution</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_039"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Markets</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol &#8220;SJ&#8221;, and our Public Warrants are traded
on OTC under the symbol &#8220;SJOYW&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_040"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Selling Shareholders</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_041"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dilution</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_042"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expenses of the Issue</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_043"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
10. ADDITIONAL INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_044"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Share Capital</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 126; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->117<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div><a id="b_045"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Memorandum and Articles
    of Association</b></span></td></tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a company incorporated in the British Virgin Islands as a BVI business company (with company number 1977965) whose registered office
is at Clarence Thomas Building, Road Town, Tortola, British Virgin Islands, and our affairs are governed by our Memorandum and Articles
of Association and the laws of the British Virgin Islands. For the purposes of the BVI Act, there are no limitations on the business
that we may carry on.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to our Memorandum and Articles of Association, we shall issue registered shares only. We are not authorized to issue bearer shares, convert
registered shares to bearer shares or exchange registered shares for bearer shares. We are currently authorized to issue an unlimited
number of shares of Class A ordinary shares, 2,925,058 Class B ordinary shares and 50,000,000 Class A preferred shares, each with no
par value. Shares may be issued in one or more series of shares as the directors may by Resolution of Directors determine from time to
time. As of April 18, 2023, 37,679,786 Class A ordinary shares and 2,925,058 shares of Class B ordinary shares are issued and outstanding.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Class
A Ordinary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to our Memorandum and Articles of Association, holders of Class A ordinary shares do not have any conversion, preemptive or other subscription
rights and there will be no sinking fund provisions applicable to the Class A ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Each
Class A ordinary share confers upon the shareholder:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the right to one vote at
    a meeting of the Shareholders or on any resolution of shareholders;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the right to an equal share in any dividend paid by
    us; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the right to an equal share in the distribution of
    our surplus assets on our liquidation.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Class
B Ordinary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to our Memorandum and Articles of Association, holders of Class B ordinary shares do not have any conversion, preemptive or other subscription
rights and there will be no sinking fund provisions applicable to the Class B ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Each
Class B ordinary share confers upon the shareholder:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the right to ten vote at
    a meeting of the Shareholders or on any resolution of shareholders;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the right to an equal share
    in any dividend paid by us; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the right to an equal share
    in the distribution of our surplus assets on our liquidation.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Class
A Preferred Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
Memorandum and Articles of Association authorizes our board of directors to establish from time to time one or more series of Class A
preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the designation of the series;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number of shares of the series;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the dividend rights, dividend rates, conversion rights,
    and voting rights; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the rights and terms of redemption and liquidation
    preferences.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these
shares may dilute the voting power of holders of Class A ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 127; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->118<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">You
should refer to the prospectus supplement relating to the series of Class A preferred shares being offered for the specific terms of
that series, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">title of the series and the number of shares in the
    series;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the price at which the preferred shares will be offered;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the dividend rate or rates
    or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative
    or noncumulative, and, if cumulative, the dates from which dividends on the preferred shares being offered will cumulate;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the voting rights, if any, of the holders of preferred
    shares being offered;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the provisions for a sinking
    fund, if any, and the provisions for redemption, if applicable, of the preferred shares being offered, including any restrictions
    on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the liquidation preference per share;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the terms and conditions,
    if applicable, upon which the preferred shares being offered will be convertible into our Class A ordinary shares, including the
    conversion price, or the manner of calculating the conversion price, and the conversion period; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the terms and conditions,
    if applicable, upon which the preferred shares being offered will be exchangeable for debt securities, including the exchange price,
    or the manner of calculating the exchange price, and the exchange period;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any listing of the preferred shares being offered on
    any securities exchange;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a discussion of any material
    federal income tax considerations applicable to the preferred shares being offered;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any preemptive rights;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the relative ranking and
    preferences of the preferred shares being offered as to dividend rights and rights upon liquidation, dissolution, or the winding
    up of our affairs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any limitations on the
    issuance of any class or series of preferred shares ranking senior or equal to the series of preferred shares being offered as to
    dividend rights and rights upon liquidation, dissolution, or the winding up of our affairs; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any additional rights, preferences, qualifications,
    limitations, and restrictions of the series.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">Issuance
of Class A preferred shares may dilute the voting power of holders of ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Existing
Warrants</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
of April 18, 2023, we have 6,023,700 warrants outstanding (&#8220;Existing Warrants&#8221;). All Existing Warrants are governed by that
certain Warrant Agreement, dated February 5, 2019, by and between Continental Stock Transfer &amp; Trust Company and us (the &#8220;Warrant
Agreement&#8221;). The following summary of certain provisions relating to our warrants s does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Warrant Agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Each
Existing Warrant entitles the registered holder to purchase one-half (1/2) of one Class A ordinary share at a price of $11.50 per share,
subject to adjustment as discussed below, at any time commencing on the later of the completion of an initial business combination and
12 months from the date of the IPO Registration Statement. Pursuant to the Warrant Agreement, an Existing Warrant holder may exercise
its Existing Warrants only for a whole number of shares. This means that only an even number of Existing Warrants may be exercised at
any given time by a Warrant holder. However, except as set forth below, other than the Oriental Warrants, no Existing Warrants will be
exercisable for cash unless we have an effective and current registration statement covering the Class A ordinary shares issuable upon
exercise of the warrants and a current prospectus relating to such Class A ordinary shares. Notwithstanding the foregoing, if a registration
statement covering the Class A ordinary shares issuable upon exercise of the Existing Warrants is not effective within 90 days from the
consummation of our initial business combination, Warrant holders may, until such time as there is an effective registration statement
and during any period when we shall have failed to maintain an effective registration statement, exercise Existing Warrants on a cashless
basis. The Existing Warrants will expire on the earlier to occur of (i) five years from the effective date of the IPO Registration Statement
at 5:00 p.m., Eastern Standard Time and (ii) the date fixed for redemption of Existing Warrants as provided in the Warrant Agreement.
We may extend the duration of the Existing Warrants by delaying the expiration date; provided, however, that we will provide written
notice of not less than 10 days to registered holders of such extension and that such extension shall be identical in duration among
all of the then outstanding Existing Warrants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
may call the outstanding Existing Warrants for redemption (excluding the warrants issued to Oriental Holdings Limited and the warrants
issued to Chardan Capital Markets, LLC), in whole and not in part, at a price of $0.01 per warrant:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at any time while the Existing Warrants are exercisable;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">upon not less than 30 days&#8217;
    prior written notice of redemption to each Existing Warrant holder;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if, and only if, the reported
    last sale price of the Class A ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a 30 trading day
    period ending on the third business day prior to the notice of redemption to Existing Warrant holders; and </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if, and only if, (i) there
    is a current registration statement in effect with respect to the Class A ordinary shares underlying such Existing Warrants at the
    time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of
    redemption, or (ii) the cashless exercise of the Existing Warrants pursuant to the Warrant Agreement is exempt from the registration
    requirements under the Securities Act. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
right to exercise will be forfeited unless the Existing Warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of an Existing Warrant will have no further rights except to receive the redemption
price for such holder&#8217;s warrant upon surrender of such warrant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
we call the Existing Warrants for redemption as described above, our management will have the option to require all holders that wish
to exercise Existing Warrants to do so on a &#8220;cashless basis.&#8221; In such event, each holder would pay the exercise price by
surrendering the whole Warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product
of the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the Existing
Warrants and the &#8220;fair market value&#8221; (defined below) by (y) the fair market value. The &#8220;fair market value&#8221; shall
mean the volume weighted average price of the Class A ordinary shares for the 20 trading days ending on the third trading day prior to
the date on which the notice of redemption is sent to the holders of Existing Warrants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
redemption rights provided under the Warrant Agreement apply only to outstanding Existing Warrants (excluding the warrants issued to
Oriental Holdings Limited and the warrants issued to Chardan Capital Markets, LLC). To the extent a person holds rights to purchase Existing
Warrants, such purchase rights shall not be extinguished by redemption. However, once such purchase rights are exercised, we may redeem
the Existing Warrants issued upon such exercise provided that the criteria for redemption is met.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Existing Warrants were and will be issued in registered form under the Warrant Agreement. The Warrant Agreement provides that the terms
of the Existing Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but
requires the approval, by written consent or vote, of the holders of a majority of the then outstanding Existing Warrants in order to
make any change that adversely affects the interests of the registered holders in any material respect.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
exercise price and number of Class A ordinary shares issuable on exercise of the Existing Warrants may be adjusted in certain circumstances
including in the event of a share capitalizations, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Existing Warrants may be exercised upon surrender of the Existing Warrants on or prior to the expiration date at the offices of the warrant
agent with the subscription form, as set forth in the Existing Warrants, duly executed, accompanied by full payment of the exercise price,
by certified or official bank check payable to us, for the number of Existing Warrants being exercised. The Existing Warrant holders
do not have the rights or privileges of holders of Class A ordinary shares and any voting rights until they exercise their Existing Warrants
and receive Class A ordinary shares. After the issuance of Class A ordinary shares upon exercise of the warrants, each holder will be
entitled to one vote for each share held of record on all matters to be voted on by shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Except
as described above, no Existing Warrants will be exercisable and we will not be obligated to issue Class A ordinary shares unless at
the time a holder seeks to exercise such warrant, a prospectus relating to the Class A ordinary shares issuable upon exercise of the
Warrants is current and the Class A ordinary shares have been registered or qualified or deemed to be exempt under the securities laws
of the state of residence of the holder of the Existing Warrants. Under the terms of the Warrant Agreement, we have agreed to use our
best efforts to meet these conditions and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise
of the Existing Warrants until the expiration of the Existing Warrants. However, we cannot assure you that we will be able to do so and,
if the prospectus relating to the Class A ordinary shares issuable upon the exercise of the Warrants is not current or if the Class A
ordinary shares is not qualified or exempt from qualification in the jurisdictions in which the holders of the Existing Warrants reside,
we will not be required to net cash settle or cash settle the Existing Warrant exercise, the Existing Warrants may have no value, the
market for the warrants may be limited and the warrants may expire worthless.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Warrant
holders may elect to be subject to a restriction on the exercise of their Existing Warrants such that an electing Warrant holder (and
his, her or its affiliates) would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such
holder (and his, her or its affiliates) would beneficially own in excess of 9.8% of the Class A ordinary shares issued and outstanding.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">No
fractional shares will be issued upon exercise of the Existing Warrants. If, upon exercise of the Existing Warrants, a holder would be
entitled to receive a fractional interest in a share, issue or cause to be issued only the largest whole number of Class A ordinary shares
issuable on such exercise (and such fraction of a Class A ordinary share will be disregarded); provided, that if more than one Existing
Warrant certificate is presented for exercise at the same time by the same registered holder, the number of whole Class A ordinary shares
which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Class A ordinary shares issuable
on exercise of all such Existing Warrants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Existing Warrants are traded on the over-the-counter markets under the symbol &#8220;SJOYW&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Key
Provisions of Our Memorandum and Articles of Association and British Virgin Islands Laws Affecting Our Ordinary Shares or Corporate Governance</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following are summaries of material terms and provisions of our Memorandum and Articles of Association and the BVI Act, insofar as they
relate to the material terms of our Class A and Class B ordinary shares or corporate governance. This summary is not intended to be complete,
and you should read our Memorandum and Articles of Association.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Voting
Rights</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have two classes of ordinary shares, namely, Class A ordinary shares and Class B ordinary shares. Both the Class A ordinary shares and
the Class B ordinary shares will have the same rights except that the Class B ordinary shares will have weighted voting rights. Each
Class B ordinary share shall have ten votes at a meeting of the shareholders or on any resolution of shareholders whereas each Class
A ordinary share shall only have one vote. Each outstanding Class B ordinary share is convertible at any time at the option of the holder
into one Class A ordinary share.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the BVI Act, the ordinary shares are deemed to be issued when the name of the shareholder is entered in our register of members. Our
register of members is maintained by our transfer agent, Continental Stock Transfer &amp; Trust Company, which will enter the name of
our shareholders in our register of members. If (a) information that is required to be entered in the register of shareholders is omitted
from the register or is inaccurately entered in the register, or (b) there is unreasonable delay in entering information in the register,
a shareholder of ours, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands courts
for an order that the register be rectified, and the court may either refuse the application or order the rectification of the register,
and may direct us to pay all costs of the application and any damages the applicant may have sustained.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Subject
to any rights or restrictions attached to any shares, at any general meeting on a show of hands every Class A ordinary shareholder who
is present in person (or, in the case of a shareholder being a corporation, by its duly authorized representative) or by proxy will have
one vote for each Class A ordinary share held on all matters to be voted on by shareholders. Subject to any rights or restrictions attached
to any shares, at any general meeting on a show of hands every Class B ordinary shareholder who is present in person (or, in the case
of a shareholder being a corporation, by its duly authorized representative) or by proxy will have ten votes for each Class B ordinary
share held on all matters to be voted on by shareholders. Voting at any meeting of the ordinary shareholders is by show of hands unless
a poll is demanded. A poll may be demanded by shareholders present in person or by proxy if the shareholder disputes the outcome of the
vote on a proposed resolution and the chairman shall cause a poll to be taken.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
is nothing under the laws of the British Virgin Islands, which specifically prohibits or restricts the creation of cumulative voting
rights for the election of our directors, but cumulative voting for the election of directors is permitted only if expressly provided
for in a BVI company&#8217;s memorandum or articles of association. We have not made provisions in our Memorandum and Articles of Association
for cumulative voting for such elections.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
British Virgin Islands laws, the voting rights of shareholders are regulated by our Memorandum and Articles of Association and, in certain
circumstances, the BVI Act. Our Memorandum and Articles of Association govern matters such as quorum for the transaction of business,
rights of shares, and majority votes required to approve any action or resolution at a meeting of the shareholders or board of directors.
Unless our Memorandum and Articles of Association otherwise provide, the requisite majority is usually a simple majority of votes cast.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Dividend
Rights</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Each
ordinary share (including both Class A ordinary shares and Class B ordinary shares) is entitled to an equal share in any dividend paid
by the Company. The Articles of Association provide that the directors of the Company may authorize a distribution (including a dividend)
at a time and of an amount they think fit if they are satisfied that immediately after the distribution (or dividend) the value of the
Company&#8217;s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Preemption
Rights</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">British
Virgin Islands laws do not make a distinction between public and private companies and some of the protections and safeguards (such as
statutory preemption rights, save to the extent that they are expressly provided for in our Memorandum and Articles of Association) that
investors may expect to find in relation to a public company are not provided for under British Virgin Islands laws. There are no preemption
rights applicable to the issuance of new shares under either British Virgin Islands laws or our Memorandum and Articles of Association.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Liquidation
Rights</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
may by resolution of shareholders or, subject to section 199(2) of the BVI Act, by resolution of directors appoint a voluntary liquidator.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Transfer
of Shares</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Any
shareholder may transfer all or any of his shares by an instrument of transfer provided that such transfer complies with applicable rules
of the SEC and federal and state securities laws of the United States. The instrument of transfer of any share shall be in writing in
the usual or common form or in a form prescribed by the Designated Stock Exchange (such as NASDAQ Capital Market) or in any other form
approved by the directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;<i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Share
Repurchases and Redemptions </i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
permitted by the BVI Act and our Memorandum and Articles of Association, shares may be repurchased, redeemed or otherwise acquired by
us. In addition, our directors must determine that, immediately following the redemption or repurchase, we will be able to pay our debts
as they fall due and that the value of our assets will exceed our liabilities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Share
Redesignation, Reclassification or Conversion</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
permitted by the BVI Act and our Memorandum and Articles of Association, a Shareholder holding Class B Ordinary Shares may at any time
require the Company to convert all or a portion of the Class B Ordinary Shares held by that Shareholder for Class A Ordinary Shares.
The Company may redesignate, reclassify or convert all or a portion of: (a) the Ordinary Shares held by a Shareholder into Class A Ordinary
Shares; and (b) the Ordinary Shares held by a Shareholder into Class B Ordinary Shares with the consent of that Shareholder by Resolution
of Shareholders.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Board
of Directors</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are managed by a Board which currently consists of seven directors. Our Memorandum and Articles of Association provide that the minimum
number of directors shall be two and there shall be no maximum number of directors. The term of the directors are two years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
directors may by Resolution of Directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and
to secure indebtedness, liabilities or obligations whether of the Company or of any third party. There are no share ownership qualifications
for directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Meetings
of our Board may be convened at any time deemed necessary by any of our directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate
not less than one-half of the total number of directors, unless there are only 2 directors in which case the quorum is 2.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
directors may, by Resolution of Directors, fix the emoluments of directors with respect to services to be rendered in any capacity to
the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
do not have any age limitations for our directors, nor do we have mandatory retirement as a result of reaching a certain age.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Meetings
of Shareholders</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Any
of our directors of may convene meetings of the shareholders at such times and in such manner and places within or outside the British
Virgin Islands as the director considers necessary or desirable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Upon
the written request of shareholders entitled to exercise 30 percent or more of the voting rights in respect of the matter for which the
meeting is requested the directors shall convene a meeting of shareholders.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Subject
to our Memorandum and Articles of Association, the director convening a meeting of members shall give not less than 7 days&#8217; written
notice of such meeting to: (a) those members whose names on the date the notice is given appear as members in the share register of the
Company and are entitled to vote at the meeting; and (b) the other directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90% of the
total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence
of a shareholder at the meeting shall constitute a waiver in relation to all the shares which that shareholder holds.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less
than 50% of the votes of the shares entitled to vote at the meeting. A quorum may be comprised of a single shareholder or proxy and then
such person may pass a resolution of shareholders and a certificate signed by such person accompanied where such person is a proxy by
a copy of the proxy instrument shall constitute a valid resolution of shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Differences
in Corporate Law</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware
and the British Virgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt a
memorandum and articles of association that will provide shareholders with rights that do not vary in any material respect from those
they would enjoy if we were incorporated under Delaware law. Set forth below is a summary of some of the differences between provisions
of the BVI Act applicable to us and the laws applicable to companies incorporated in Delaware and their shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Director&#8217;s
Fiduciary Duties</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty
has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care
that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and
disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires
that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate
position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation
and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by
the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and
in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by
evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director
must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">British
Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties,
shall act honestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the
director shall exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into
account the nature of the company, the nature of the decision and the position of the director and his responsibilities. In addition,
British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose and shall not act, or
agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum and articles of association of
the company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Amendment
of Governing Documents</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, with very limited exceptions, a vote of the shareholders of a corporation is required to amend the certificate
of incorporation. In addition, Delaware corporate law provides that shareholders have the right to amend the corporation&#8217;s bylaws,
but the certificate of incorporation may confer such right on the directors of the corporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
Memorandum and Articles of Association can generally be amended by with the approval of the holders of a majority of our outstanding
ordinary shares or by a resolution of the board of directors. In addition, pursuant to our Memorandum and Articles of Association, our
board of directors may amend our Memorandum and Articles of Association by a resolution of directors without a requirement for a resolution
of shareholders so long as the amendment does not:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">restrict the rights or
    powers of the shareholders to amend our Memorandum and Articles of Association;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">change the percentage of
    shareholders required to pass a resolution of shareholders to amend our Memorandum and Articles of Association; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">amend our Memorandum and
    Articles of Association in circumstances where it cannot be amended by the shareholders;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">certain provisions that
    our Memorandum and Articles of Association specifies cannot be amended.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Written
Consent of Directors</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, a written consent of the directors must be unanimous to take effect. Under British Virgin Islands law and our
Memorandum and Articles of Association, only a majority of the directors are required to sign a written consent.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Written
Consent of Shareholders</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special
meeting of shareholders of a corporation may be taken by written consent of the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to take that action at a meeting at which all shareholders entitled to vote were present
and voted. As permitted by British Virgin Islands law, our Memorandum and Articles of Association provides that a resolution of shareholders
can be consented to in writing by a majority of in excess of 50 percent of the votes of ordinary shares entitled to vote thereon.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Shareholder
Proposals</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies
with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person
authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands
law and our Memorandum and Articles of Association provide that our directors shall call a meeting of the shareholders if requested in
writing to do so by shareholders entitled to exercise at least 30% of the voting rights in respect of the matter for which the meeting
is requested.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Dissolution;
Winding Up</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders
holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved
by a simple majority of the corporation&#8217;s outstanding shares. Delaware corporate law allows a Delaware corporation to include in
its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. As permitted
by British Virgin Islands law and our Memorandum and Articles of Association, we may by resolution of shareholders or, subject to section
199(2) of the BVI Act, by resolution of directors appoint a voluntary liquidator.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 133; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Redemption
of Shares</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, any stock may be made subject to redemption by the corporation at its option, at the option of the holders of
that stock or upon the happening of a specified event, provided shares with full voting power remain outstanding. The stock may be made
redeemable for cash, property or rights, as specified in the certificate of incorporation or in the resolution of the board of directors
providing for the issue of the stock. As permitted by British Virgin Islands law and our Memorandum and Articles of Association, shares
may be repurchased, redeemed or otherwise acquired by us. However, the consent of the shareholder whose shares are to be repurchased,
redeemed or otherwise acquired must be obtained, except as specified in the terms of the applicable class or series of shares or as described
under &#8220;&#8212;Compulsory Acquisition&#8221; below. In addition, our directors must determine that, immediately following the redemption
or repurchase, we will be able to pay our debts as they fall due and that the value of our assets will exceed our liabilities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Compulsory
Acquisition</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware General Corporation Law &#167; 253, in a process known as a &#8220;short form&#8221; merger, a corporation that owns at least
90% of the outstanding shares of each class of stock of another corporation may either merge the other corporation into itself and assume
all of its obligations or merge itself into the other corporation by executing, acknowledging and filing with the Delaware Secretary
of State a certificate of such ownership and merger setting forth a copy of the resolution of its board of directors authorizing such
merger. If the parent corporation is a Delaware corporation that is not the surviving corporation, the merger also must be approved by
a majority of the outstanding stock of the parent corporation. If the parent corporation does not own all of the stock of the subsidiary
corporation immediately prior to the merger, the minority shareholders of the subsidiary corporation party to the merger may have appraisal
rights as set forth in &#167; 262 of the Delaware General Corporation Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the BVI Act, subject to any limitations in a company&#8217;s memorandum and articles of association, members holding 90% of the votes
of the outstanding shares entitled to vote, and members holding 90% of the votes of the outstanding shares of each class of shares entitled
to vote, may give a written instruction to the company directing the company to redeem the shares held by the remaining members. Upon
receipt of such written instruction, the company shall redeem the shares specified in the written instruction, irrespective of whether
or not the shares are by their terms redeemable. The company shall give written notice to each member whose shares are to be redeemed
stating the redemption price and the manner in which the redemption is to be effected. A member whose shares are to be so redeemed is
entitled to dissent from such redemption and to be paid the fair value of his shares, as described under &#8220;&#8212;Shareholders&#8217;
Rights under British Virgin Islands Law Generally&#8221; below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Variation
of Rights of Shares</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares
of that class, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law and our Memorandum
and Articles of Association, if at any time the Shares are divided into different classes, the rights attached to any class may only
be varied, whether or not the Company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the
holders of not less than 50 percent of the voting rights in that class.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Election
of Directors</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, unless otherwise specified in the certificate of incorporation or bylaws of a corporation, directors are elected
by a plurality of the votes of the shares entitled to vote on the election of directors. As permitted by British Virgin Islands law,
and pursuant to our Memorandum and Articles of Association, our first directors shall be appointed by the first registered agent within
6 months of the date of incorporation; and thereafter, the directors shall be elected by resolution of shareholders or, where permitted
by our Memorandum and Articles of Association, by resolution of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Removal
of Directors</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority
of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Similarly, as permitted by British
Virgin Islands law, our Memorandum and Articles of Association provides that directors may be removed from office, (a) with or without
cause, by resolution of shareholders passed at a meeting of shareholders called for the purposes of removing the director or for purposes
including the removal of the director or by a written resolution passed by at least 50 percent of the votes of the shareholders of the
Company entitled to vote, or (b) with cause, by Resolution of Directors passed at a meeting of directors called for the purpose of removing
the director or for purposes including the removal of the director.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 134; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Mergers</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, one or more constituent corporations may merge into and become part of another constituent corporation in a process
known as a merger. A Delaware corporation may merge with a foreign corporation as long as the law of the foreign jurisdiction permits
such a merger. To effect a merger under Delaware General Corporation Law &#167; 251, an agreement of merger must be properly adopted
and the agreement of merger or a certificate of merger must be filed with the Delaware Secretary of State. In order to be properly adopted,
the agreement of merger must be adopted by the board of directors of each constituent corporation by a resolution or unanimous written
consent. In addition, the agreement of merger generally must be approved at a meeting of shareholders of each constituent corporation
by a majority of the outstanding stock of the corporation entitled to vote, unless the certificate of incorporation provides for a supermajority
vote. In general, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation or corporations
as a result of the merger.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of
two or more constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent
companies into a new company. In order to merge or consolidate, the directors of each constituent company must approve a written plan
of merger or consolidation, which must be authorized by a resolution of shareholders. One or more companies may also merge or consolidate
with one or more companies incorporated under the laws of jurisdictions outside the British Virgin Islands if the merger or consolidation
is permitted by the laws of the jurisdictions in which the companies incorporated outside the British Virgin Islands are incorporated.
In respect of such a merger or consolidation, a British Virgin Islands company is required to comply with the provisions of the BVI Act,
and a company incorporated outside the British Virgin Islands is required to comply with the laws of its jurisdiction of incorporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Shareholders
not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation
contains any provision that, if proposed as an amendment to the memorandum and articles of association, would entitle them to vote as
a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation
irrespective of whether they are entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or
consolidation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Inspection
of Books and Records</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation&#8217;s
stock ledger, list of shareholders and other books and records. Under British Virgin Islands law, members of the general public, on payment
of a nominal fee, can obtain copies of the public records of a company available at the office of the British Virgin Islands Registrar
of Corporate Affairs, including the company&#8217;s certificate of incorporation, its memorandum and articles of association (with any
amendments), records of license fees paid to date, any articles of dissolution, any articles of merger and a register of charges if the
company has elected to file such a register.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
shareholder of a company is entitled, on giving written notice to the company, to inspect:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a)</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the memorandum and articles of association;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">b)</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the register of members;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">c)</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the register of directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">d)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the minutes of meetings
    and resolutions of shareholders and of those classes of shares of which he is a shareholder.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
addition, a shareholder may make copies of or take extracts from the documents and records referred to in (a)&#160;through (d)&#160;above.
However, subject to the memorandum and articles of association of the company, the directors may, if they are satisfied that it would
be contrary to the company&#8217;s interests to allow a shareholder to inspect any document, or part of any document, specified in (b),
(c)&#160;or (d)&#160;above, refuse to permit the shareholder to inspect the document or limit the inspection of the document, including
limiting the making of copies or the taking of extracts from the records. Where a company fails or refuses to permit a shareholder to
inspect a document or permits a shareholder to inspect a document subject to limitations, that shareholder may apply to the court for
an order that he should be permitted to inspect the document or to inspect the document without limitation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Where
a company keeps a copy of the register of members or the register of directors at the office of its registered agent, it is required
to notify the registered agent of any changes to the originals of such registers, in writing, within 15 days of any change; and to provide
the registered agent with a written record of the physical address of the place or places at which the original register of members or
the original register of directors is kept. Where the place at which the original register of members or the original register of directors
is changed, the company is required to provide the registered agent with the physical address of the new location of the records within
14 days of the change of location.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
company is also required to keep at the office of its registered agent or at such other place or places, within or outside the British
Virgin Islands, as the directors determine the minutes of meetings and resolutions of shareholders and of classes of shareholders, and
the minutes of meetings and resolutions of directors and committees of directors. If such records are kept at a place other than at the
office of the company&#8217;s registered agent, the company is required to provide the registered agent with a written record of the
physical address of the place or places at which the records are kept and to notify the registered agent, within 14 days, of the physical
address of any new location where such records may be kept.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Conflict
of Interest</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, a contract between a corporation and a director or officer, or between a corporation and any other organization
in which a director or officer has a financial interest, is not void as long as (i)&#160;the material facts as to the director&#8217;s
or officer&#8217;s relationship or interest are disclosed or known and (ii)&#160;either a majority of the disinterested directors authorizes
the contract in good faith or the shareholders vote in good faith to approve the contract. Nor will any such contract be void if it is
fair to the corporation when it is authorized, approved or ratified by the board of directors, a committee or the shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
BVI Act provides that a director shall, forthwith after becoming aware that he is interested in a transaction entered into or to be entered
into by the company, disclose that interest to the board of directors of the company. The failure of a director to disclose that interest
does not affect the validity of a transaction entered into by the director or the company, so long as the director&#8217;s interest was
disclosed to the board prior to the company&#8217;s entry into the transaction or was not required to be disclosed because the transaction
is between the company and the director himself and is otherwise in the ordinary course of business and on usual terms and conditions.
As permitted by British Virgin Islands laws and our Memorandum and Articles of Association, a director interested in a particular transaction
may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction, and subject
to compliance with the BVI Act shall not, by reason of his office be accountable to us for any benefit which he derives from such transaction
and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Transactions
with Interested Shareholders</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Delaware
corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has
specifically elected not to be governed by that statute by amendment to its certificate of incorporation, it is prohibited from engaging
in certain business combinations with an &#8220;interested shareholder&#8221; for three years following the date that the person becomes
an interested shareholder. An interested shareholder generally is a person or group that owns or owned 15% or more of the company&#8217;s
outstanding voting stock within the past three years. This statute has the effect of limiting the ability of a potential acquirer to
make a two-tiered bid for the company in which all shareholders would not be treated equally. The statute does not apply if, among other
things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business
combination or the transaction that resulted in the person becoming an interested shareholder.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">British
Virgin Islands law has no comparable provision. However, although British Virgin Islands law does not regulate transactions between a
company and its significant shareholders, it does provide that these transactions must be entered into in the bona fide best interests
of the company and not with the effect of constituting a fraud on the minority shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Independent
Directors</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Cumulative
Voting</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company&#8217;s certificate of incorporation
specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors
since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases
the shareholder&#8217;s voting power with respect to electing such director. There are no prohibitions on cumulative voting under the
laws of the British Virgin Islands, but our Memorandum and Articles of Association does not provide for cumulative voting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Shareholders&#8217;
Rights under British Virgin Islands Law Generally</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
BVI Act provides for certain remedies that may be available to shareholders. Where a company incorporated under the BVI Act or any of
its directors engages in, or proposes to engage in, conduct that contravenes the BVI Act or the company&#8217;s memorandum and articles
of association, British Virgin Islands courts can issue a restraining or compliance order. However, shareholders can also bring derivative,
personal and representative actions under certain circumstances. The traditional English basis for members&#8217; remedies has also been
incorporated into the BVI Act: where a shareholder of a company considers that the affairs of the company have been, are being or are
likely to be conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the
court for an order based on such conduct. In addition, any shareholder of a company may apply to the courts for the appointment of a
liquidator of the company and the court may appoint a liquidator of the company if it is of the opinion that it is just and equitable
to do so.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
BVI Act also provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any
of the following: (i)&#160;a merger, if the company is a constituent company, unless the company is the surviving company and the member
continues to hold the same or similar shares; (ii)&#160;a consolidation, if the company is a constituent company; (iii)&#160;any sale,
transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the
usual or regular course of the business carried on by the company but not including (a)&#160;a disposition pursuant to an order of the
court having jurisdiction in the matter, (b)&#160;a disposition for money on terms requiring all or substantially all net proceeds to
be distributed to the shareholders in accordance with their respective interest within one year after the date of disposition, or (c)&#160;a
transfer pursuant to the power of the directors to transfer assets for the protection thereof; (iv)&#160;a redemption of 10% or fewer
of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the
BVI Act; and (v)&#160;an arrangement, if permitted by the court.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Generally,
any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the British
Virgin Islands or their individual rights as shareholders as established by a company&#8217;s memorandum and articles of association.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Rights
of Non-resident or Foreign Shareholders and Disclosure of Substantial Shareholdings</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">There
are no limitations imposed by our amended and restated memorandum and articles of association on the rights of non-resident or foreign
shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our amended and restated memorandum
and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Anti-Money
Laundering &#8212; British Virgin Islands</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
order to comply with legislation or regulations aimed at the prevention of money laundering we are required to adopt and maintain anti-money
laundering procedures, and may require subscribers or transferees to provide evidence to verify their identity. Where permitted, and
subject to certain conditions, we also may delegate the maintenance of our anti-money laundering procedures (including the acquisition
of due diligence information) to a suitable person.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
reserve the right to request such information as is necessary to verify the identity of a subscriber or transferee. In the event of delay
or failure on the part of the subscriber or transferee in producing any information required for verification purposes, we may refuse
to accept the application, in which case any funds received will be returned without interest to the account from which they were originally
debited or refuse to amend the register of members to reflect the transferee&#8217;s ownership of the relevant shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
any person resident in the British Virgin Islands knows or suspects that another person is engaged in money laundering or terrorist financing
and the information for that knowledge or suspicion came to their attention in the course of their business the person will be required
to report his belief or suspicion to the Financial Investigation Agency of the British Virgin Islands, pursuant to the Proceeds of Criminal
Conduct Act 1997 (as amended). Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure
of information imposed by any enactment or otherwise.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Exchange
Controls</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">No
laws of the British Virgin Islands, decrees, regulations or other legislation that limit the import or export of capital or the payment
of dividends to shareholders who do not reside in the British Virgin Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Our
Transfer Agent</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
transfer agent for our securities is Continental Stock Transfer &amp; Trust Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Listing</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol &#8220;SJ&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_046"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Material Contracts</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have not entered into any material contracts other than in the ordinary course of business and other than those described in &#8220;Item
4. Information on the Company&#8221;, &#8220;Item 7. Major Shareholders and Related Party Transactions&#8212;B. Related Party Transactions,&#8221;
or elsewhere in this annual report on Form&#160;20-F.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_047"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exchange Controls</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">No
laws of the British Virgin Islands, decrees, regulations or other legislation that limit the import or export of capital or the payment
of dividends to shareholders who do not reside in the British Virgin Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_048"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Taxation</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following discussion of material British Virgin Islands, PRC, and United States federal income tax consequences of an investment in our
Class A ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this report, all of which
are subject to change. This discussion does not deal with all possible tax consequences relating to an investment in our Class A ordinary
shares, such as the tax consequences under state, local, and other tax laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">WE
URGE POTENTIAL PURCHASERS OF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL,
AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A ORDINARY SHARES.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>People&#8217;s
Republic of China Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are a holding company incorporated in the British Virgin Islands and we gain substantial income by way of dividends paid to us from our
PRC subsidiaries. The PRC Enterprise Income Tax Law and its implementation rules (the &#8220;EIT Law&#8221;) provide that PRC-sourced
income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will
normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor&#8217;s jurisdiction of incorporation has
a tax treaty with China that provides for a preferential tax rate or a tax exemption.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the EIT Law, an enterprise established outside of China with a &#8220;de facto management body&#8221; within China is considered a &#8220;resident
enterprise,&#8221; which means that it is treated in a manner similar to a PRC domestic enterprise for enterprise income tax purposes.
Although the implementation rules of the EIT Law define &#8220;de facto management body&#8221; as a managing body that actually, comprehensively
manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance
for this definition currently available is set forth in SAT Circular 82, which provides guidance on the determination of the tax residence
status of a PRC-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign
country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although the Company does
not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a PRC-controlled offshore incorporated
enterprise within the meaning of SAT Circular 82, in the absence of guidance specifically applicable to us, we have applied the guidance
set forth in SAT Circular 82 to evaluate the tax residence status of the Company and its subsidiaries organized outside of China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">According
to SAT Circular 82, a PRC-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a &#8220;de
facto management body&#8221; in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following
criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production,
operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions
(such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and
salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property,
accounting books, corporate seal, the board of directors and files of the minutes of shareholders&#8217; meetings of the enterprise are
located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the
right to vote habitually reside within the territory of China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, the key assets and records
of the Company, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our
shareholders, are located and maintained outside China. In addition, we are not aware of any offshore holding companies with a corporate
structure similar to ours that has been deemed a PRC &#8220;resident enterprise&#8221; by the PRC tax authorities. Accordingly, we believe
that the Company and its offshore subsidiary should not be treated as a &#8220;resident enterprise&#8221; for PRC tax purposes if the
criteria for &#8220;de facto management body&#8221; as set forth in SAT Circular 82 were deemed applicable to us. As the tax residency
status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation
of the term &#8220;de facto management body&#8221; as applicable to our offshore entities, however, we will continue to monitor our tax
status.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
the PRC tax authorities determine that the Company is a PRC resident enterprise for enterprise income tax purposes, we may be required
to withhold a 10% withholding tax from any dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident
enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Class A
Ordinary Shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders
would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined
to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally
apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. It is also unclear, however, whether non-PRC
shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC
in the event that the Company is treated as a PRC resident enterprise. There is no guidance from the PRC government to indicate whether
or not any tax treaties between the PRC and other countries would apply in circumstances where a non-PRC company was deemed to be a PRC
tax resident, and thus there is no basis for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Provided
that the Company is not deemed to be a PRC resident enterprise, holders of our Class A Ordinary Shares who are not PRC residents will
not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our shares. However,
under SAT Bulletin 7, where a non-resident enterprise conducts an &#8220;indirect transfer&#8221; by transferring taxable assets, including,
in particular, equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding
company, the non-resident enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets
may report to the relevant tax authority such indirect transfer. Using a &#8220;substance over form&#8221; principle, the PRC tax authority
may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose
of reducing, avoiding, or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes,
currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may
be at risk of being required to file a return and being taxed under SAT Bulletin 7, and we may be required to expend valuable resources
to comply with SAT Bulletin 7, or to establish that we should not be taxed under this Bulletin.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;<b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>British
Virgin Islands Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
British Virgin Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and
there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied
by the Government of the British Virgin Islands except for stamp duties which may be applicable on instruments executed in, or after
execution brought within the jurisdiction of the British Virgin Islands. No stamp duty is payable in the British Virgin Islands on the
issue of shares by, or any transfers of shares of, British Virgin Islands companies (except those which hold interests in land in the
British Virgin Islands). The British Virgin Islands is not party to any double tax treaties that are applicable to any payments made
to or by the Company. There are no exchange control regulations or currency restrictions in the British Virgin Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Payments
of dividends and capital in respect of our Class A Ordinary Shares will not be subject to taxation in the British Virgin Islands and
no withholding will be required on the payment of a dividend or capital to any holder of our Class A Ordinary Shares, as the case may
be, nor will gains derived from the disposal of our Class A Ordinary Shares be subject to British Virgin Islands income or corporation
tax.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 139; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>United
States Federal Income Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Class A Ordinary
Shares. It is directed to U.S. Holders (as defined below) of our Class A Ordinary Shares and is based upon laws and relevant interpretations
thereof in effect as of the date of this report, all of which are subject to change. This description does not deal with all possible
tax consequences relating to ownership and disposition of our Class A Ordinary Shares or U.S. tax laws, other than the U.S. federal income
tax laws, such as the tax consequences under non-U.S. tax laws, estate and gift and state, local and other tax laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following brief description applies only to U.S. Holders (defined below) that hold Class A Ordinary Shares as capital assets and that
have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States
in effect as of the date of this report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this
report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities
are subject to change, which change could apply retroactively and could affect the tax consequences described below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following does not address the tax consequences to investors that may be subject to special tax rules, including, without limitation,
the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">banks,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">financial institutions;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insurance companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated investment companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">real estate investment
    trusts;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">broker-dealers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">traders that elect to mark
    their securities to market;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S. expatriates;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">governments or agencies
    or instrumentalities thereof;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax-exempt entities;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons liable for alternative
    minimum tax or the corporate alternative minimum tax;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons holding our Class
    A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons that actually or
    constructively own 10% or more of our voting power or value (including by reason of owning our Class A Ordinary Shares);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons who acquired our
    Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons holding our Class
    A Ordinary Shares through partnerships or other pass-through entities; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">beneficiaries of a Trust
    holding our Class A Ordinary Shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">This
summary of the U.S. federal income tax consequences to &#8220;U.S. Holders&#8221; will apply to you if you are a beneficial owner of
Class A Ordinary Shares and you are, for U.S. federal income tax purposes,</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an individual who is a
    citizen or resident of the United States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a corporation (or other
    entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof
    or the District of Columbia;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an estate whose income
    is subject to U.S. federal income taxation regardless of its source; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a trust that (1) is subject
    to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions
    or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 140; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->131<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Taxation
of Dividends and Other Distributions on Our Class A Ordinary Shares</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Subject
to the PFIC (defined below) rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary
Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on
the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits
(as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible
for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the preferential rate applicable
to qualified dividend income, provided that we are not a PFIC (defined below) for either our taxable year in which the dividend is paid
or the preceding taxable year, and certain holding period requirements are met. You are urged to consult your tax advisors regarding
the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change
in law after the date of this report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Dividends
will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income
(as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will
be adjusted pursuant to a formula provided in applicable Treasury regulation. The limitation on foreign taxes eligible for credit is
calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class
A Ordinary Shares will constitute &#8220;passive category income&#8221; but could, in the case of certain U.S. Holders, constitute &#8220;general
category income.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">To
the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal
income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent
the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings
and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a
dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described
above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Taxation
of Dispositions of Class A Ordinary Shares</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Subject
to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange, or other
taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis
(in U.S. dollars) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder,
including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible
for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally
be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability
of foreign tax credits.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Passive
Foreign Investment Company (&#8220;PFIC&#8221;)</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at least 75% of its gross
    income for such taxable year is passive income; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at least 50% of the value
    of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce
    or are held for the production of passive income (the &#8220;asset test&#8221;).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Passive
income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets
and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by
value) of the stock.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Based
on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. We must make
a separate determination each year as to whether we are a PFIC, however, and there can be no assurance with respect to our status as
a PFIC for our current taxable year or any future taxable year. Depending on the amount of our cash and other assets held for the production
of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets
may be assets held for the production of passive income. In addition, because the value of our assets for purposes of the asset test
will generally be determined based on the market price of our Class A Ordinary Shares and because cash is generally considered to be
an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Class A Ordinary
Shares. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. We are under no obligation
to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets
will depend upon material facts (including the market price of our Class A Ordinary Shares from time to time) that may not be within
our control. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for
all succeeding years during which you hold Class A Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely
&#8220;mark-to-market&#8221; election as described below, however, you may avoid some of the adverse effects of the PFIC regime by making
a &#8220;purging election&#8221; (as described below) with respect to the Class A Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
we are a PFIC for your taxable year(s) during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect
to any &#8220;excess distribution&#8221; that you receive and any gain you realize from a sale or other disposition (including a pledge)
of the Class A Ordinary Shares, unless you make a &#8220;mark-to-market&#8221; election as discussed below. Distributions you receive
in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding
taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax
rules:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the excess distribution
    or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the amount allocated to
    your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were
    a PFIC, will be treated as ordinary income, and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the amount allocated to
    each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally
    applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
tax liability for amounts allocated to years prior to the year of disposition or &#8220;excess distribution&#8221; cannot be offset by
any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated
as capital, even if you hold the Class A Ordinary Shares as capital assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">A
U.S. Holder of &#8220;marketable stock&#8221; (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the
US Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for
the first taxable year in which you hold (or are deemed to hold) Class A Ordinary Shares and for which we are determined to be a PFIC,
you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares
as of the close of such taxable year over your adjusted basis in such Class A Ordinary Shares, and such excess will be treated as ordinary
income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Class A Ordinary Shares
over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any
net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income
under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated
as ordinary income. Class A Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Class
A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such
Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you
make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions
by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under &#8220;&#8212;Taxation
of Dividends and Other Distributions on our Class A Ordinary Shares&#8221; generally would not apply.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
mark-to-market election is available only for &#8220;marketable stock&#8221;, which is stock that is traded in other than de minimis
quantities on at least 15 days during each calendar quarter (&#8220;regularly traded&#8221;) on a qualified exchange or other market
(as defined in applicable U.S. Treasury regulations), including Nasdaq Stock Market. If the Class A Ordinary Shares are regularly traded
on Nasdaq Stock Market and if you are a holder of Class A Ordinary Shares, the mark-to-market election would be available to you were
we to be or become a PFIC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Alternatively,
a U.S. Holder of stock in a PFIC may make a &#8220;qualified electing fund&#8221; election under Section 1295(b) of the US Internal Revenue
Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing
fund election with respect to a PFIC will generally include in gross income for a taxable year such holder&#8217;s pro rata share of
the corporation&#8217;s earnings and profits for the taxable year. The qualified electing fund election, however, is available only if
such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury
regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund
election. If you hold Class A Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal
Revenue Service Form 8621 in each such year and provide certain annual information regarding such Class A Ordinary Shares, including
regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">If
you do not make a timely &#8220;mark-to-market&#8221; election (as described above), and if we were a PFIC at any time during the period
you hold our Class A Ordinary Shares, then such Class A Ordinary Shares will continue to be treated as stock of a PFIC with respect to
you even if we cease to be a PFIC in a future year, unless you make a &#8220;purging election&#8221; for the year we cease to be a PFIC.
A &#8220;purging election&#8221; creates a deemed sale of such Class A Ordinary Shares at their fair market value on the last day of
the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest
charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new
basis (equal to the fair market value of the Class A Ordinary Shares on the last day of the last year in which we are treated as a PFIC)
and holding period (which new holding period will begin the day after such last day) in your Class A Ordinary Shares for tax purposes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">You
are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares
and the elections discussed above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><i>Information
Reporting and Backup Withholding</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Dividend
payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares
may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406
of the US Internal Revenue Code at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes
a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who
is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such
certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application
of the U.S. information reporting and backup withholding rules.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability,
and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.
Transactions effected through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup
withholding), and such brokers or intermediaries may be required by law to withhold such taxes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>EACH
PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN INVESTMENT IN OUR CLASS A ORDINARY
SHARES IN LIGHT OF SUCH INVESTOR&#8217;S PARTICULAR CIRCUMSTANCES.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_049"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dividends and Paying
    Agents</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_050"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>G.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Statement by Experts</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><div><a id="b_051"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>H.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Documents on Display</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Accordingly, we are required to file reports, including annual reports on Form&#160;20-F, and other information with the SEC. As a foreign
private issuer, we are exempt from the rules&#160;of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders,
and our executive officers, directors and principal shareholders are not subject to the insider short-swing profit disclosure and recovery
provisions of Section&#160;16 of the Exchange Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">All
information that we have filed with the SEC can be accessed through the SEC&#8217;s website at www.sec.gov. This information can also
be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of the public reference rooms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">In
accordance with Nasdaq Stock Market Rule&#160;5250(d), we will post this annual report on Form&#160;20-F on our website at ir.scienjoy.com.
In addition, we will provide hard copies of our annual report free of charge to shareholders upon request.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_052"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>I.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subsidiary Information</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_053"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>J.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Annual Report to Security
    Holders</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_054"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Interest
Rate Risk</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held
in interest bearing bank deposits. The Company has not used derivative financial instruments to manage its interest risk exposure. Interest
earning instruments carry a degree of interest rate risk. The Company has not been exposed to, nor does the Company anticipate being
exposed to, material risks due to changes in market interest rates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Credit
Risk</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents,
accounts receivable, other receivables included in prepaid expenses, other current assets, and amounts due from related parties. As of
December 31, 2021 and December 31, 2022, RMB238,792 and RMB<span>172,514</span> (US$<span>25,012</span>),
respectively, were deposited with major financial institutions located in the PRC. Management believes that these financial institutions
are of high credit quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese
banks are secure due to the state policy on protecting depositors&#8217; interests.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 143; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">For
the credit risk related to accounts receivable, the Company performs ongoing credit evaluations of its customers. The Company establishes
an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific customers and other information.
The allowance amounts were immaterial for all periods presented.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Foreign
Currency Exchange Rate Risk</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Substantially
all of the Company&#8217;s businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994,
the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People&#8217;s Bank
of China. However, the unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies.
All foreign exchange transactions continue to take place either through the People&#8217;s Bank of China or other banks authorized to
buy and sell foreign currencies at the exchange rates quoted by the People&#8217;s Bank of China. Approval of foreign currency payments
by the People&#8217;s Bank of China or other institutions requires submitting a payment application form together with suppliers&#8217;
invoices, shipping documents and signed contracts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_055"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_056"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Debt Securities</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_057"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Warrants and Rights</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_058"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Other Securities</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_059"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>American Depositary
    Shares</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_060"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>PART
II</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_061"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_062"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_063"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
15. CONTROLS AND PROCEDURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Disclosure
Controls and Procedures</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Under
the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we carried
out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) under the Exchange Act,
as of December 31, 2022. Based upon this evaluation, our management, with the participation of our chief executive officer and chief
financial officer, has concluded that our disclosure controls and procedures were effective in ensuring that the information required
to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the SEC&#8217;s rules and forms, and that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and
chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Management&#8217;s
Annual Report on Internal Control over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">This
annual report does not include a report of management&#8217;s assessment regarding internal control over financial reporting or an attestation
report by our independent registered public accounting firm due to a transition period established by rules&#160;of the SEC for newly
public companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Internal
Control Over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the U.S. Exchange Act. As required by Rule 13a-15(c) of the U.S. Exchange Act&#8482;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">We have implemented and planned
to implement a number of measures to address the material weaknesses that has been identified in connection with the audit of our consolidated
financial statements for the year ended December&#160;31, 2021. We have engaged an international consulting firm to assist us to improve
our internal control over financial reporting. We have allocated additional resources, including staff or external consultants with relevant
U.S. GAAP and SEC reporting experience, to improve financial oversight function, to introduce formal business performance review process,
and to prepare and review the consolidated financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting
requirements. In addition, we intend to conduct regular and continuous U.S. GAAP accounting and financial reporting training programs.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">However,
we cannot assure you that all these measures will be sufficient to remediate our significant deficiencies in time, or at all. As we&#160;were
a privately owned company prior to listing, neither we nor our independent registered public accounting firm undertook a comprehensive
assessment of our internal control over financial reporting under the Sarbanes-Oxley Act for purposes of identifying and reporting any
material weakness or significant deficiency in our internal control over financial reporting. Had we performed a formal assessment of
our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal
control over financial reporting, additional control deficiencies may have been identified. See &#8220;Item 3. Key Information&#8212;D.&#160;Risk
Factors&#8212;Risks Related to Our Business&#8212;If we fail to implement and maintain an effective system of internal controls to remediate
our material weakness over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations
or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an &#8220;emerging growth company&#8221;
pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are
otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under
Section&#160;404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company&#8217;s internal control over financial
reporting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Changes
in Internal Control over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">During
the period covered by this report, other than as described above, there have not been any changes in our internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 145; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->136<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_064"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16. [Reserved]</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_065"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.A. AUDIT COMMITTEE FINANCIAL EXPERT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
board of directors has determined that each of Jian Sun, Huifeng Chang, and Yibing Liu, independent directors (under the standards set
forth in Nasdaq Stock Market Rule&#160;5605(a)(2)&#160;and Rule&#160;10A-3 under the Exchange Act) and members of our audit committee,
is an audit committee financial expert.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_066"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.B. CODE OF ETHICS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 12, 2020 our Board adopted (a) an Amended and Restated Code of Conduct and Ethics (the &#8220;Code&#8221;), which amended and restated
our then existing code of conduct and ethics (the &#8220;Existing Code) in its entirety and applies to all officers, directors, and employees
of us and our subsidiaries, and (b) an Insider Trading Policy (the &#8220;Policy&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Existing Code was refreshed and updated in connection with the Business Combination to conform the Code to reflect current best practices
and enhance the personnel&#8217;s understanding of our standards of ethical business practices, promote awareness of ethical issues that
may be encountered in carrying out an employee&#8217;s or director&#8217;s responsibilities, and improve its clarity as to how to address
ethical issues that may arise. The updates include clarifications and enhancements to the purposes of the Code, compliance with law matters,
policies regarding maintenance of our corporate records, and compliance standards and procedures of the Code. The adoption of the Code
did not relate to or result in any waiver, whether explicit or implicit, of any provision of the Existing Code.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Policy provides guidelines to employees, officers and directors of us and our subsidiaries with respect to transactions in our securities
and the procedures set forth therein is intended to help prevent insider trading and to assist the employees, officers and directors
of us and our subsidiaries in complying with their obligations under the federal securities laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><div><a id="b_067"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by Friedman LLP and OneStop Assurance PAC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>For the Year<br/> Ended<br/> December&#160;31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>2022</b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%">Audit Fees(1)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">428,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>Audit-related Fees(2)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">30,560</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Total</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">458,560</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit Fees&#8221;
    represent the aggregate fees billed for professional services rendered by our principal accountants for the audit of our consolidated
    financial statements and assistance with and review of documents filed with the SEC.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit-Related Fees&#8221;
    represent the aggregate fees billed for professional services rendered by our principal accountants for the assurance and related
    services, which are not included under &#8220;Audit Fees&#8221; above</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Pre-approval
Policies</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s audit committee approves all auditing services and permitted non-audit services performed for the Company by its independent
auditor in advance of an engagement. All auditing services and permitted non-audit services (including the fees and terms thereof) to
be performed for the Company by its independent auditor must be approved by the audit committee in advance, subject to the de minimis
exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the committee prior to
the completion of the audit.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->137<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_068"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_069"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_070"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.F. CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
May 12, 2020 we dismissed Marcum LLP (&#8220;Marcum&#8221;) as our independent registered public accounting firm. Effective May 12, 2020,
Friedman LLP (&#8220;Friedman&#8221;) has been engaged as our new independent registered public accounting firm. The audit committee
of our board of directors (the &#8220;Audit Committee&#8221;) approved the dismissal of Marcum and the engagement of Friedman as the
independent registered public accounting firm. Marcum served as the independent registered public accounting firm for us since May 2,
2018, our inception as Wealthbridge Acquisition Limited. Friedman previously served as the auditor for Scienjoy Inc. prior to the consummation
of the Business Combination and provided audit opinions in connection with Scienjoy Inc.&#8217;s consolidated financial statements for
the fiscal years ended December 31, 2019 and 2018.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Marcum&#8217;s
report on our financial statements for the fiscal year ended December 31, 2019 and for the period from May 2, 2018 (inception) through
December 31, 2018 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty,
audit scope or accounting principles. During the period of Marcum&#8217;s engagement and the subsequent interim period preceding Marcum&#8217;s
dismissal, there were no disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make a reference
to the subject matter of the disagreement in connection with its reports covering such periods. In addition, no &#8220;reportable events,&#8221;
as defined in Item 304(a)(1)(v) of Regulation S-K, occurred within the period of Marcum&#8217;s engagement and the subsequent interim
period preceding Marcum&#8217;s dismissal. We have provided Marcum with a copy of the foregoing disclosures and Marcum has furnished
us with a letter addressed to the SEC, which is Exhibit 16.1 incorporated by reference to the 8-K form for May 2020 filed on May 13,
2020, stating it agrees with the statements made by us set forth above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">During
the period from May 2, 2018 (inception) through December 31, 2019 and the subsequent interim period preceding the engagement of Friedman,
neither we nor anyone on our behalf consulted with Friedman regarding either: (i)&#160;the application of accounting principles to a
specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements,
and neither a written report nor oral advice was provided to us that Friedman concluded was an important factor considered by us in reaching
a decision as to the accounting, auditing or financial reporting issue; or (ii)&#160;any matter that was either the subject of a &#8220;disagreement&#8221;
or a &#8220;reportable event&#8221; (as described in Items 304(a)(1)(iv) and 304(a)(1)(v) of Regulation&#160;S-K,&#160;respectively).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">On
April 19, 2022 we dismissed Friedman LLP (&#8220;Friedman&#8221;) as our independent registered public accounting firm. Effective April
19, 2022, OneStop Assurance PAC (&#8220;OneStop&#8221;) has been engaged as our new independent registered public accounting firm. The
audit committee of our board of directors (the &#8220;Audit Committee&#8221;) approved the dismissal of Friedman and the engagement of
OneStop as the independent registered public accounting firm. Friedman served as the independent registered public accounting firm for
us since May 12, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Friedman&#8217;s
report on our financial statements for the fiscal year ended December 31, 2020 and 2019 did not contain an adverse opinion or disclaimer
of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles. During the period of
Friedman&#8217;s engagement and the subsequent interim period preceding Friedman&#8217;s dismissal, there were no disagreements with
Friedman on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of Friedman, would have caused it to make a reference to the subject matter of the disagreement in
connection with its reports covering such periods. In addition, no &#8220;reportable events,&#8221; as defined in 16F(a)(1)(v)(A) through
(D) of Form 20-F, occurred within the period of Friedman&#8217;s engagement and the subsequent interim period preceding Friedman&#8217;s
dismissal. We have provided Friedman with a copy of the foregoing disclosures and Friedman has furnished us with a letter addressed to
the SEC, which is attached hereto as Exhibit 16.2, incorporated by reference to the 6-K form for April 2022 filed on April 19, 2022,
stating it agrees with the statements made by us set forth above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">During
the Company&#8217;s most recent two fiscal years and through the subsequent interim period on or prior to the appointment of the OneStop,
neither the Company nor anyone on its behalf has consulted with the OneStop on either (a) the application of accounting principles to
a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company&#8217;s financial
statements, or (b) any matter that was the subject of a disagreement, as that term is defined in Item 16F(a)(1)(iv) of Form 20-F (and
the related instructions thereto) or a reportable event as set forth in Item 16F(a)(1)(v)(A) through (D) of Form 20-F.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
dismissed Friedman LLP (&#8220;Former Auditor&#8221;) effective April 19, 2022 and that the Company has appointed OneStop Assurance PAC
(the &#8220;Successor Auditor&#8221;) as successor auditor of the Company effective April 19, 2022 and for the fiscal year ended December
31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 147; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->138<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><div><a id="b_071"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.G. CORPORATE GOVERNANCE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Foreign
Private Issuer</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">As
a British Virgin Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Stock Market Rules corporate governance
listing standards. However, Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices
of its home country. Certain corporate governance practices in British Virgin Island, which is our home country, may differ significantly
from the Nasdaq Stock Market Rules. While we voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage
of the following exemptions afforded to foreign private issuers:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exemption from the requirement
    to obtain shareholder approval for certain issuances of securities, including shareholder approval of stock option plans; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exemption from the requirement
    that our board of directors shall have regularly scheduled meetings at which only independent directors are present as set forth
    in Nasdaq Rule 5605(b)(2).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
intend to follow our home country practices in lieu of the foregoing requirements. Although we may rely on home country corporate governance
practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), we must comply with Nasdaq&#8217;s Notification
of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), the Diverse Board representation requirement (Rule
5605(f)), the Board Diversity disclosure rule (Rule 5606), have an audit committee that satisfies Rule 5605(c)(3), consisting of committee
members that meet the independence requirements of Rule 5605(c)(2)(A)(ii), and Rule 5000 series. Although we currently intend to comply
with the Nasdaq corporate governance rules applicable other than as noted above, we may in the future decide to use the foreign private
issuer exemption with respect to some or all the other Nasdaq corporate governance rules. As a result, our shareholders may be afforded
less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
We may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif"><b>Controlled
Company</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
are &#8220;controlled company&#8217;&#8217; as defined under the Nasdaq Stock Market Rules because Heshine controls more than 50% of
our voting rights. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and will rely,
on certain exemptions from corporate governance rules, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exemption from the rule
    that a majority of our board of directors must be independent directors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exemption from the rule
    that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an exemption from the rule
    that our director nominees must be selected or recommended solely by independent directors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_072"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.H. MINE SAFETY DISCLOSURE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_073"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16.I. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 148; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->139<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_074"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>PART
III</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><div><a id="b_075"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
17. FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">We
have elected to provide financial statements pursuant to Item 18.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_076"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
18. FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Our
consolidated financial statements are included at the end of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="b_077"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
19. EXHIBITS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif">
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; width: 9%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit
    No.</b></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: top; width: 1%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; width: 90%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description
    </b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021051872/ea148412ex99-1_scienjoyhold.htm#a_033"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fourth Amended and Restated Memorandum and Articles of Association of Scienjoy Holding Corporation, as adopted by a special resolution on November 8, 2021 (incorporated by reference to Annex A to the Current Report on Form 6-K filed with the Securities &amp; Exchange Commission on October 7, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021062275/ea151002ex4-1_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Specimen Class A Ordinary Share Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form F-3 filed with the Securities and Exchange Commission on November 29, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.2</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000161577418014783/s114842_ex4-3.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 21, 2018).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.3</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000161577419002270/s116025_ex4-1.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant Agreement, dated February 5, 2019, by and between Continental Stock Transfer &amp; Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on February 11, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.4*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex2-4_scienjoyhold.htm">Description of Securities.</a></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390019021733/f8k102819ex2-1_wealth.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Exchange Agreement dated October 28, 2019 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on November 01, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000161577419002270/s116025_ex4-3.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Unit Purchase Option between the Registrant and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on February 11, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000161577419002270/s116025_ex10-1.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Letter Agreements by and between the Registrant and each of the initial shareholders, officers and directors of the Registrant (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on February 11, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000161577419002270/s116025_ex10-3.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock Escrow Agreement, dated February 5, 2019, among the Registrant, Continental Stock Transfer &amp; Trust Company, LLC, and the initial shareholders (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on February 11, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000161577419002270/s116025_ex10-4.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registration Rights Agreement, dated February 5, 2019, among the Registrant, Continental Stock Transfer &amp; Trust Company, LLC and the initial shareholders (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on February 11, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.6</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000161577418014783/s114842_ex10-5.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Subscription Agreement among the Registrant, the Initial Shareholders and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 filed with the Securities &amp; Exchange Commission on December 21, 2018)</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.7</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000161577419002270/s116025_ex10-2.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment Management Trust Account Agreement, dated February 5, 2019, by and between Continental Stock Transfer &amp; Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities &amp; Exchange Commission on February 11, 2019).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.8</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-1_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Director Service Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.9</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-2_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Xiaowu He, dated May 1, 2019 (English Translation) (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.10</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-3_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Bo Wan, dated February 8, 2020 (English Translation) (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->140<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; width: 9%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.11</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 1%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 90%; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-4_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Pei Lu, dated January 10, 2012(English Translation) (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.12</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-5_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Bentong Deng. (Denny Tang), dated February 4, 2020 (English Translation) (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.13</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-6_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loan Agreement between Zhihui Qiyuan (Beijing) Technology Co., Ltd. and Changxiang Infinite (Beijing) Technology Co. Ltd., dated April 2, 2020 (English Translation) (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.14</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-7_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive Option Agreement among Sixiang Wuxian (Beijing) Technology Co., Ltd., Xiaoke Yin, Beijing Junwei Technology Co., Ltd., and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.15</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-8_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Supplement Agreement of Exclusive Option Agreement among Sixiang Wuxian (Beijing) Technology Co., Ltd., Xiaoke Yin, Beijing Junwei Technology Co., Ltd., and Zhihui Qiyuan (Beijing) Technology Co., Ltd. dated August 30, 2019 (English Translation) (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.16</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-9_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Power of Attorney Agreement between Sixiang Wuxian (Beijing) Technology Co., Ltd., and Xiaoke Yin, dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.17</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-10_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Pledge Agreement among Sixiang Wuxian (Beijing) Technology Co., Ltd., Xiaoke Yin, Beijing Junwei Technology Co., Ltd., and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.18</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-11_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive Business Cooperation Agreements between Sixiang Wuxian (Beijing) Technology Co., Ltd. and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.19</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-12_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Supplement Agreement of Exclusive Business Cooperation Agreement between Sixiang Wuxian (Beijing) Technology Co., Ltd. and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated August 30, 2019 (English Translation) (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.20</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-13_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Indemnification Agreement (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.21</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-14_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registration Rights Agreement among Wealthbridge Acquisition Limited, Lavacano Holdings Limited, and WBY Entertainment Holdings Ltd., dated May 7, 2020 (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.22</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-15_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Escrow Agreement among Loeb &amp; Loeb LLP, Wealthbridge Acquisition Limited, Lavacano Holdings Limited, and WBY Entertainment Holdings Ltd., dated May 7, 2020 (incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.23</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-16_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Resale Lock-up Agreement between Wealthbridge Acquisition Limited and Lavacano Holdings Limited, dated May 7, 2020 (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.24</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-17_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Resale Lock-up Agreement between Wealthbridge Acquisition Limited and WBY Entertainment Holdings Ltd., dated May 7, 2020 (incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.25</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex10-18_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Voting Agreement among Wealthbridge Acquisition Limited, Oriental Holdings Limited, Lavacano Holdings Limited, WBY Entertainment Holdings Ltd. and Yongsheng Liu, dated May 7, 2020 (incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.26 </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1753673/000121390020031690/ea126694ex10-19_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equity&#160;Acquisition&#160;Framework&#160;Agreement (English Translation), dated August 10, 2020 (incorporated by reference to Exhibit 10.19 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.27 </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390020031690/ea126694ex10-20_scienjoy.htm">Resale Lock-up Agreement with Cosmic Soar Limited, dated September 10, 2020 (incorporated by reference to Exhibit 10.20 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).</a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.28 </span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390020031690/ea126694ex10-21_scienjoy.htm">Share Transfer Agreement between Cosmic Soar Limited and Scienjoy Inc., dated August 10, 2020 (incorporated by reference to Exhibit 10.21 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).</a></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; width: 9%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.29 </span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 1%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 90%; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390020031690/ea126694ex10-22_scienjoy.htm">Equity Interest Transfer Agreement between Tianjin Guangju Dingsheng Technology Co., Ltd. and Zhihui Qiyuan Technology Co., Ltd., dated August 10, 2020 (incorporated by reference to Exhibit 10.22 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).</a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.30</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021011084/ea136227ex99-1_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common Stock Purchase Agreement between Scienjoy Holding Corporation and White Lion Capital LLC, dated February 23, 2021 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 6-K filed with the SEC on February 23, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.31</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021011084/ea136227ex99-2_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registration Rights Agreement between Scienjoy Holding Corporation and White Lion Capital LLC, dated February 23, 2021 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed with the SEC on February 23, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.32</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021011084/ea136227ex99-3_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Escrow Agreement among Scienjoy Holding Corporation, White Lion Capital LLC, and Indeglia PC, dated February 23, 2021 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 6-K filed with the SEC on February 23, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.33</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021034446/ea143407ex99-1_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Termination and Release Agreement by and between Scienjoy Holding Corporation and White Lion Capital LLC, dated June 24, 2021 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 6-K filed with the SEC on June 28, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.34</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021067890/ea153166ex99-2_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equity Acquisition Framework Agreement by and among Scienjoy Holding Corporation, Golden Shield Enterprises Limited, Beijing Weiliantong Technology Co., Ltd., Tianjin Yieryi Technology Co., Ltd., Wolter Global Investment Limited and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) dated December 29, 2021. (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.35</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021067890/ea153166ex99-3_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Equity Interest Transfer Agreement between Zhihui Qiyuan (Beijing) Science and Technology Co., Ltd. and Tianjin Yieryi Technology Co., Ltd. (incorporated by reference to Exhibit 99.3 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.36</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021067890/ea153166ex99-4_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Share Transfer Agreement between Scienjoy Inc. and Wolter Global Investment Limited. (incorporated by reference to Exhibit 99.4 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.37</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021067890/ea153166ex99-5_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equity Repurchase Agreement by and among Tianjin Yieryi Technology Co., Ltd., Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership), Zhihui Qiyuan (Hainan) Investment Co., Ltd, Junpeng Guo and Ting Zhao dated December 29, 2021. (incorporated by reference to Exhibit 99.5 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.38</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.39</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390021067890/ea153166ex99-7_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Resale Lock-up Agreement between Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) and Scienjoy Holding Corporation. 99.8 Form of Resale Lock-up Agreement between Wolter Global Investment Limited and Scienjoy Holding Corporation. (incorporated by reference to Exhibit 99.7 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.40</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390022033439/ea161733ex99-2_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive Option Agreement by and among Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., Sheng Hou, and Yong Xie. dated June 1, 2022. (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.41</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390022033439/ea161733ex99-3_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Power of Attorney Agreement by and between Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., and Sheng Hou. dated June 1, 2022. (incorporated by reference to Exhibit 99.3 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.42</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390022033439/ea161733ex99-4_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Power of Attorney Agreement by and between Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., and Yong Xie, dated June 1, 2022. (incorporated by reference to Exhibit 99.4 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.43</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390022033439/ea161733ex99-5_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Pledge Agreement by and among Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., Sheng Hou, Yong Xie, and Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd., dated June 1, 2022. (incorporated by reference to Exhibit 99.5 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.44</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390022033439/ea161733ex99-6_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive Business Cooperation Agreement by and between Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd. and Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. dated June 1, 2022. (incorporated by reference to Exhibit 99.6 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.1*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex8-1_scienjoyhold.htm">Subsidiaries of the Registrant.</a></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex12-1_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex12-2_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.1*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex13-1_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex13-2_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.1*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex15-1_scienjoyhold.htm" style="-sec-extract: exhibit">Consent of OneStop Assurance PAC</a></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.2*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex15-2_scienjoyhold.htm" style="-sec-extract: exhibit">Consent of Beijing Feng Yu Law Firm</a></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">16.1</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390020011974/ea121622ex16-1_scienjoyhold.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Letter from Marcum LLP to the Securities and Exchange Commission, dated May 13, 2020. (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">16.2</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1753673/000121390022020550/ea158606ex16-1_scienjoy.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Letter from Friedman LLP to the Securities and Exchange Commission, dated April 19, 2022. (incorporated by reference to Exhibit 16.1 to the Current Report on Form 6-K filed with the SEC on April 19, 2022).</span></a></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.INS</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Instance Document.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.SCH</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Schema Document.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.CAL</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Calculation Linkbase
    Document.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.DEF</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Definition Linkbase
    Document.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.LAB</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Label Linkbase Document.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.PRE</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Presentation Linkbase
    Document.</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cover Page Interactive
    Data File (embedded within the Inline XBRL document)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;<span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Filed herewith.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 151; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->142<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>SIGNATURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused
and authorized the undersigned to sign this annual report on its behalf.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Scienjoy Holding Corporation </b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 60%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; width: 35%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td style="font-family: Times New Roman, Times, Serif; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Xiaowu
    He</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xiaowu He</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:</span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Date:
April 28, 2023</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>INDEX TO CONSOLIDATED FINANCIAL INFORMATION</b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>



    </div><!-- Field: Page; Sequence: 154; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><div><a id="fin_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; "><b>REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">To the Board of Directors and</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">Shareholders of Scienjoy Holding Corporation</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">Opinion on the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">We have audited the accompanying
consolidated balance sheet of Scienjoy Holding Corporation and Subsidiaries (collectively, the &#8220;Company&#8221;) as of December 31,
2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders&#8217; equity, and cash flows for for
each of the two years in the period ended December 31, 2022, and the related notes to the consolidated financial statements and schedule
(collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial
positions of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years
in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">Basis for Opinion</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">These financial statements
are the responsibility of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial
statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect
to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">We conducted our audit
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness
of the Company&#8217;s internal control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Our audit included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for
our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">/s/&#160;<ix:nonNumeric contextRef="c0" name="dei:AuditorName">OneStop Assurance PAC</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">We have served as the Company&#8217;s auditor
since 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Singapore</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">April 28, 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="fin_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>CONSOLIDATED BALANCE
SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepositsAssetsNoncurrent" scale="3" unitRef="cny">1,152</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left">LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Current liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-3">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBankLoansAndNotesPayable" scale="3" unitRef="cny">5,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Accounts payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="3" unitRef="cny">85,801</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="3" unitRef="cny">116,251</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="3" unitRef="usd">16,855</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Accrued salary and employee benefits</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:EmployeeRelatedLiabilitiesCurrent" scale="3" unitRef="cny">24,533</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:EmployeeRelatedLiabilitiesCurrent" scale="3" unitRef="cny">12,428</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:EmployeeRelatedLiabilitiesCurrent" scale="3" unitRef="usd">1,802</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Accrued expenses and other current liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent" scale="3" unitRef="cny">16,181</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent" scale="3" unitRef="cny">13,264</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent" scale="3" unitRef="usd">1,923</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Contingent consideration &#8211; earn-out liability</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="sj:ContingentConsiderationEarnoutLiabilities" scale="3" unitRef="cny">10,638</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="sj:ContingentConsiderationEarnoutLiabilities" scale="3" unitRef="cny">4,336</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="sj:ContingentConsiderationEarnoutLiabilities" scale="3" unitRef="usd">629</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Warrant liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DerivativeLiabilitiesCurrent" scale="3" unitRef="cny">10,324</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DerivativeLiabilitiesCurrent" scale="3" unitRef="cny">166</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DerivativeLiabilitiesCurrent" scale="3" unitRef="usd">24</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Income tax payable</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedIncomeTaxesCurrent" scale="3" unitRef="usd">1,962</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Lease liabilities-operating lease -current</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-4">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="3" unitRef="cny">7,174</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="3" unitRef="usd">1,040</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Deferred revenue</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="3" unitRef="cny">65,405</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="3" unitRef="cny">93,383</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="3" unitRef="usd">13,539</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-7">&#160;</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-8">&#160;</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-9">&#160;</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-10">&#160;</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-11">&#160;</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Statutory reserves</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><ix:footnote id="ix_0_footnote" xml:lang="en-US"><span style="font-size: 10pt">Ordinary shares and share data
have been retroactively restated to give effect to the reverse recapitalization</span></ix:footnote></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">The accompanying notes
are an integral part of these consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>


</div><!-- Field: Page; Sequence: 156; Value: 1 --><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="fin_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="text-transform: uppercase"><b>SCIENJOY
HOLDING CORPORATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="text-transform: uppercase"><b>CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Research and development expenses</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in fair value of investment</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in fair value of warrant liabilities</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Investments income (loss)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetInvestmentIncome" scale="3" sign="-" unitRef="cny">2,998</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Change in fair value of contingent consideration</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="sj:ChangeInFairValueOfContingentConsideration" scale="3" unitRef="cny">14,068</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="sj:ChangeInFairValueOfContingentConsideration" scale="3" unitRef="cny">33,584</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left">Income before income taxes</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" scale="3" unitRef="cny">183,504</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Income tax expense</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxExpenseBenefit" scale="3" unitRef="cny">7,404</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxExpenseBenefit" scale="3" unitRef="usd">2,619</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left">Net income</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US"><span style="font-size: 10pt">Ordinary shares and share data
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">The accompanying notes
are an integral part of these consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>


</div><!-- Field: Page; Sequence: 157; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><div><a id="fin_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="text-transform: uppercase"><b>SCIENJOY
HOLDING CORPORATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="text-transform: uppercase"><b>CONSOLIDATED
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US"><span style="font-size: 10pt">Ordinary shares and share data
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">The accompanying notes
are an integral part of these consolidated financial statements.&#160;</p><div>


</div><!-- Field: Page; Sequence: 158; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><div><a id="fin_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="text-transform: uppercase"><b>SCIENJOY
HOLDING CORPORATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="text-transform: uppercase"><b>CONSOLIDATED
STATEMENTS OF CASH FLOWS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Amortization of intangible assets</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Provision (recovery) for doubtful accounts</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Deferred tax expenses (benefit)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in fair value of contingent consideration</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in fair value of warrant liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:UnrealizedGainLossOnDerivatives" scale="3" unitRef="cny">3,904</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in fair value of investment</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FairValueAdjustmentOfWarrants" scale="3" sign="-" unitRef="cny">25,831</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Investments loss (income)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GainLossOnInvestments" scale="3" unitRef="cny">25,449</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GainLossOnInvestments" scale="3" unitRef="usd">3,690</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">Share based compensation</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-204">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensation" scale="3" unitRef="cny">31,857</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensation" scale="3" unitRef="cny">11,954</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensation" scale="3" unitRef="usd">1,733</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Amortization of the Right-of-use assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseRightOfUseAssetAmortization" scale="3" unitRef="cny">6,265</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; font-style: italic; text-align: left">Changes in operating assets and liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Accounts receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="3" unitRef="cny">70,513</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="3" sign="-" unitRef="cny">23,499</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="3" unitRef="cny">112,058</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="3" unitRef="usd">16,247</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Prepaid expense and other current assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="3" sign="-" unitRef="cny">5,193</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="3" unitRef="cny">151,657</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="3" sign="-" unitRef="cny">64,180</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Long term deposits and other assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="3" sign="-" unitRef="cny">1,379</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="3" sign="-" unitRef="cny">230</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="3" sign="-" unitRef="cny">335</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="3" sign="-" unitRef="usd">49</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Accounts payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayable" scale="3" unitRef="cny">28,396</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayable" scale="3" unitRef="cny">18,712</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayable" scale="3" unitRef="cny">25,503</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayable" scale="3" unitRef="usd">3,698</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Deferred revenue</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredRevenue" scale="3" unitRef="cny">15,838</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredRevenue" scale="3" unitRef="cny">22,397</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredRevenue" scale="3" unitRef="usd">3,247</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Payment to acquisition</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherPaymentsToAcquireBusinesses" scale="3" unitRef="cny">50,000</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Payment for long term investment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Purchase of property and equipment and intangible assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="3" unitRef="cny">2,153</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="3" unitRef="usd">312</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="3" sign="-" unitRef="cny">113,246</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="3" sign="-" unitRef="usd">16,420</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left">Cash flows from financing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfPrivatePlacement" scale="3" unitRef="cny">15,284</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-208">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-209">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Repayments to loan</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfDebt" scale="3" unitRef="cny">57,400</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-210">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-211">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Proceeds from bank loan</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left">Supplemental disclosures of cash flow information:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 4pt">Conversion of convertible notes and rights</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">The accompanying notes
are an integral part of these consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; "><b>&#160;</b></p><div>

</div><div><a id="fin_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_2" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Scienjoy
Holding Corporation (the &#8220;Company&#8221; or &#8220;Scienjoy&#8221;) through its subsidiaries, and variable interest entities(&#8220;VIE&#8221;)
and its subsidiaries (collectively the &#8220;Group&#8221;) are principally engaged in operating its own live streaming platforms in the
People&#8217;s Republic of China (the &#8220;PRC&#8221;), which enable users to view and interact with broadcasters through online chat,
virtual items and playing games. The primary theme of the Company&#8217;s platform is entertainment live streaming.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_3" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(a)
Reverse recapitalization</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_4" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On May 7,
2020, the Company, formerly known as Wealthbridge Acquisition Limited (&#8220;Wealthbridge&#8221;), consummated the transactions (the
&#8220;SPAC Transaction&#8221;) contemplated by the Share Exchange Agreement (the &#8220;Share Exchange Agreement&#8221;) dated as of
October 28, 2019, pursuant to which the Company acquired&#160;<ix:nonFraction contextRef="c62" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% of the issued and outstanding equity interests of Scienjoy Inc. and
changed its name to Scienjoy Holding Corporation. Upon the closing of the Transaction, the Company acquired&#160;<ix:nonFraction contextRef="c63" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% of the issued and
outstanding equity interests of Scienjoy Inc. in exchange for approximately in aggregated of&#160;<ix:nonFraction contextRef="c64" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="6" unitRef="shares">19.4</ix:nonFraction>&#160;million Class A ordinary shares,
including&#160;<ix:nonFraction contextRef="c64" decimals="-6" format="ixt:num-dot-decimal" name="sj:ConsiderationOfOrdinaryShares" scale="6" unitRef="shares">3</ix:nonFraction>&#160;million&#160;Class A ordinary shares as part of earn-out consideration that was issued to the previous owners of
Scienjoy Inc. (Note -2). Scienjoy Inc. was determined to be the accounting acquirer given that the original shareholders of Scienjoy Inc.
effectively controlled the combined entity after the Transaction. The Transaction is not a business combination because Wealthbridge was
not a business. The transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by Scienjoy
Inc. for the net monetary assets of Wealthbridge, accompanied by a recapitalization. Scienjoy Inc. is determined as the predecessor, and
the historical financial statements of Scienjoy Inc. became the Company&#8217;s historical financial statements, with retrospective adjustments
to give effect of the reverse recapitalization. The share and per share data is retrospectively restated to give effect to the reverse
recapitalization.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_5" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(b)
Reorganization</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_6" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
1, 2018, Tongfang Investment Fund Series SPC (&#8220;TF&#8221;) completed the acquisition of a&#160;<ix:nonFraction contextRef="c65" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">65</ix:nonFraction>% equity interest in Sixiang Times
(Beijing) Technology Co., Ltd (&#8220;Sixiang Times&#8221;) from NQ Mobile Inc. Through the acquisition of Sixiang Times, TF acquired
a controlling position in Holgus Sixiang Information Technology Co., Ltd (&#8220;Holgus X&#8221;), Kashgar Sixiang Times Internet Technology
Co., Ltd (&#8220;Kashgar Times&#8221;), Beijing Sixiang Shiguang Technology Co., Ltd (&#8220;SG&#8221;), Hai Xiu (Beijing) Technology
Co., Ltd (&#8220;HX&#8221;) and Beijing Le Hai Technology Co., Ltd (&#8220;LH&#8221;).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_7" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On May 18,
2017, Scienjoy Inc. established its wholly owned subsidiary in Hong Kong, Scienjoy International Limited (&#8220;Scienjoy HK&#8221;),
as a holding company holding all of the outstanding shares of Sixiang Wuxian (Beijing) Technology Co., Ltd (&#8220;WXBJ&#8221;) which
was established in PRC on October 17, 2017 under the laws of the People&#8217;s Republic of China as a holding company holding all of
the equity interest of Sixiang Zhihui (Beijing) Technology Co., Ltd. (&#8220;ZH&#8221;),which was incorporated on July 5, 2018.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_8" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Scienjoy
Inc. established ZH (through WXBJ), as a holding company for purpose of holding all of the outstanding equity interest of Holgus X and&#160;Kashgar
Times, as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_9" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(i)</span></td><td style="text-align: justify"><span style="font-size: 10pt">On July 18, 2018, Sixiang Times
and ZH executed an equity transfer agreement. Pursuant to the agreement,&#160;<ix:nonFraction contextRef="c66" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in Holgus X was transferred to ZH.</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_10" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(ii)</span></td><td style="text-align: justify"><span style="font-size: 10pt">On July 24, 2018, Sixiang Times
and ZH executed an equity transfer agreement. Pursuant to the agreement,&#160;<ix:nonFraction contextRef="c67" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in Kashgar Times was transferred to
ZH. In consideration of the transfer, the Company paid RMB<ix:nonFraction contextRef="c68" decimals="-3" format="ixt:num-dot-decimal" name="sj:ShareConsiderationAmountPaid" scale="3" unitRef="cny">10,000</ix:nonFraction>&#160;to the former shareholders of Kashgar Times.</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_11" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On November
16, 2018,&#160;Sixiang Times and other minority shareholders respectively entered into certain equity transfer agreements with Sixiang
Huizhi (Beijing) Technology Culture Co., Ltd. (&#8220;HZ&#8221;) and Tianjin Sihui Peiying Technology Co., Ltd. (&#8220;SY&#8221;), and
transfer <ix:nonFraction contextRef="c69" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in SG to HZ, and transfer <ix:nonFraction contextRef="c70" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in HX and LH to HZ and SY accordingly. Both HZ and SY were
ultimately controlled by TF.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_12" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
28, 2019, HZ and SY executed equity transfer agreement with Zhihui Qiyuan (Beijing) Technology Co., Ltd. (&#8220;QY&#8221;). Pursuant
to the agreement,&#160;<ix:nonFraction contextRef="c71" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in SG, HX and LH were transferred to QY which is ultimately controlled by TF. In consideration
of the transfer, Scienjoy Inc. paid RMB&#160;<ix:nonFraction contextRef="c72" decimals="-3" format="ixt:num-dot-decimal" name="sj:ShareConsiderationAmountPaid" scale="3" unitRef="cny">32,000</ix:nonFraction>&#160;to the former shareholders of SG, HX and LH.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; "></p><div>

</div><!-- Field: Page; Sequence: 160; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(b)
Reorganization (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_13" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
29, 2019, Scienjoy Inc., through its wholly owned subsidiary WXBJ, entered into a series of contractual arrangements (VIE Agreements)
with QY and its respective shareholders, and in substance controlled all equity shares, risk and reward of SG, HX and LH through QY accordingly
as a primary beneficiary of QY.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_14" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
29, 2019, Scienjoy Inc. completed its reorganization of entities under the common control of the founders. Scienjoy, Scienjoy HK, WXBJ
and ZH were established as holding Companies. WXBJ holds <ix:nonFraction contextRef="c73" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% of equity interests of ZH which holds <ix:nonFraction contextRef="c74" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% of equity interest in Kashgar
Times and Holgus X. WXBJ is the primary beneficiary of QY which holds <ix:nonFraction contextRef="c75" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in SG, HX and LH. These transactions were between
entities under common control, and therefore accounted for in a manner similar to the pooling of interest method. Under the pooling-of-interests
method, combination between two businesses under common control is accounted for at carrying amounts with retrospective adjustment of
prior period financial statements, and the equity accounts of the combining entities are combined and the difference between the consideration
paid and the net assets acquired is reflected as an equity transaction (i.e., distribution to parent company). As opposed to the purchase
method of accounting, no intangible assets are recognized in the transaction, and no goodwill is recognized as a result of the combination.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_15" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(c)
Recent developments</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_16" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In December
2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world
in the first half of 2020, which has caused significant volatility in the PRC and international markets. After the initial outbreak of
COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the infections
caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai in 2022,
and a series of restrictions and quarantines were implemented to contain the spread. Our Beijing and Hangzhou office did not work at full
capacity for approximately two months when these restrictive measures are in force, which negatively affected our operational and financial
results. Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread of the COVID-19
virus have been revoked or replaced with more flexible measures since December 2022. While the revocation or replacement of the restrictive
measures to contain the COVID-19 pandemic could have a positive impact on our normal operations, the extent of the impact on the Company&#8217;s
future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence
of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy
and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company
is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity
and results of operations if the current situation continues.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_17" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
1, 2022,&#160;the Company closed an Equity Acquisition Framework Agreement (the &#8220;Framework Agreement&#8221;) with Golden Shield
Enterprises Limited (&#8220;Golden Shield&#8221;), Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;), The Company acquired
<ix:nonFraction contextRef="c76" decimals="2" format="ixt:num-dot-decimal" name="sj:CompanyAcquiredIssuedPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the issued and outstanding securities of Weiliantong and Golden Shield for an aggregate consideration of RMB<ix:nonFraction contextRef="c77" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferredContingentConsideration" scale="3" unitRef="cny">280,000</ix:nonFraction> (approximately
US$ <ix:nonFraction contextRef="c77" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferredContingentConsideration" scale="3" unitRef="usd">40,600</ix:nonFraction>)</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_18" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
4, 2022, the Company set up a new subsidiary, Sixiang Zhihui (Zhejiang) Culture Technology Co., Ltd. for general corporate purpose.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_19" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
25, 2022, SG consummated the acquisition of the&#160;<ix:nonFraction contextRef="c78" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. (&#8220;CDZH&#8221;)
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. (&#8220;HYDC&#8221;) from its original shareholders for a
cash consideration of RMB<ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferred" scale="3" unitRef="cny">100</ix:nonFraction>&#160;(US$<ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferred" scale="3" unitRef="usd">14</ix:nonFraction>).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_20" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On February
15, 2022, QYHN established a <ix:nonFraction contextRef="c80" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPercentageOfOwnershipAfterTransaction" scale="-2" unitRef="pure">51</ix:nonFraction>% owned subsidiary Hongcheng Huiying (Hangzhou) Technology Industry Development Co., Ltd. (&#8220;HCHY&#8221;)
in Zhejiang, PRC to provide information technology service.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_21" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On April
7, 2022, Sixiang Qiyuan(Hangzhou) Culture Technology Co., Ltd (&#8220;QYHZ&#8221;) and its several wholly owned subsidiaries were established
in Zhejiang, PRC to provide information technology service. QYHZ is controlled through contractual agreement in lieu of direct equity
ownership by WXZJ.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_22" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On April
28, 2022, Scienjoy HK established a wholly owned subsidiary Sixiang Wuxian (Zhejiang) Culture Technology Co. Ltd. (&#8220;WXZJ&#8221;)
and its subsidiary&#160;Sixiang Zhihui(Zhejiang) Culture Technology Co., Ltd (&#8220;ZHZJ&#8221;)&#160;in Zhejiang, PRC to provide information
technology service.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_23" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On June
30, 2022, WXBJ&#160;established a wholly owned subsidiary Sixiang Yingyue (Shanghai) Technology Co., Ltd (&#8220;SXYY&#8221;), in Shanghai,
PRC to provide information technology service.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 161; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_24" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization</i></b></span></p><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_25" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Subsidiaries
of the Company and VIEs where the Company is the primary beneficiary include the following:</span></p><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_26" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_25"><ix:nonNumeric contextRef="c0" escape="true" name="sj:ScheduleOfSubsidiariesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 9pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 9pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; text-indent: -0.125in; padding-left: 0.125in; width: 40%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><b>Subsidiaries</b></span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 15%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><b>Date
    of<br/>
    incorporation</b></span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 13%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><b>Place
    of<br/>
    incorporation</b></span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 13%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><b>Percentage
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    direct/indirect<br/>
    ownership</b></span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; white-space: nowrap; width: 15%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><b>Principal<br/>
    activities</b></span></td></tr>
  <tr style="font: 9pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font: 9pt Times New Roman, Times, Serif; text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">Scienjoy
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  <tr style="font: 9pt Times New Roman, Times, Serif; vertical-align: bottom">
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    <td style="font: 9pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td></tr>
  <tr style="font: 9pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><ix:nonFraction contextRef="c120" decimals="2" format="ixt:num-dot-decimal" name="sj:PercentageOfDirectindirectOwnership" scale="-2" unitRef="pure">100</ix:nonFraction>%</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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  <tr style="font: 9pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><ix:nonFraction contextRef="c124" decimals="2" format="ixt:num-dot-decimal" name="sj:PercentageOfDirectindirectOwnership" scale="-2" unitRef="pure">100</ix:nonFraction>%</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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  <tr style="font: 9pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><ix:nonFraction contextRef="c126" decimals="2" format="ixt:num-dot-decimal" name="sj:PercentageOfDirectindirectOwnership" scale="-2" unitRef="pure">100</ix:nonFraction>%</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><ix:nonFraction contextRef="c128" decimals="2" format="ixt:num-dot-decimal" name="sj:PercentageOfDirectindirectOwnership" scale="-2" unitRef="pure">100</ix:nonFraction>%</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><ix:nonFraction contextRef="c144" decimals="2" format="ixt:num-dot-decimal" name="sj:PercentageOfDirectindirectOwnership" scale="-2" unitRef="pure">100</ix:nonFraction>%</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><ix:nonNumeric contextRef="c143" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">Live streaming platform</span></ix:nonNumeric></td></tr>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt"><ix:nonFraction contextRef="c148" decimals="2" format="ixt:num-dot-decimal" name="sj:PercentageOfDirectindirectOwnership" scale="-2" unitRef="pure">100</ix:nonFraction>%</span></td>
    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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    <td style="font: 9pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</span></td>
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</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_27" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_26"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">LXZ was deregistered in July,
2022. Since this entity was inactive, the deregistration does not have a material impact to the Company&#8217;s consolidated financial
statements for the years ended December 31 2020, 2021 and 2022.</span></td>
</tr></table><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_28" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_27"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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SHWL and SH has not commenced any operation since their inception. Management determined that this disposition did not represent a strategic
shift and had no significant effect on the Company&#8217;s operations and financial results; therefore, no discontinued operations were
presented.</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p></ix:continuation><div>
</div><div>


</div><!-- Field: Page; Sequence: 162; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_29" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
29, 2019, the Company completed its reorganization of entities under the common control of the founders. Scienjoy, Scienjoy HK, WXBJ and
ZH were established as holding Companies. WXBJ holds&#160;<ix:nonFraction contextRef="c82" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% of equity interests of ZH which holds&#160;<ix:nonFraction contextRef="c83" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% of equity interest in Kashgar
Times and Holgus X. WXBJ is the primary beneficiary of QY which holds&#160;<ix:nonFraction contextRef="c84" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">100</ix:nonFraction>% equity interest in SG, HX and&#160;LH (collectively &#8220;QY
VIEs&#8221;). All of these entities included in the Company are under common control, which results in the consolidation of QY and ZH
which have been accounted for as a reorganization of entities under common control at carry value. The consolidated financial statements
are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying
consolidated financial statements of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_30" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Contracts between the Company and the QY
VIEs</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_31" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Foreign
ownership of Internet-based businesses, including distribution of online information (such as game content provider), is subject to restrictions
under current PRC laws, regulations, and other applicable laws and regulations. The Company is a Cayman Island company and WXBJ and WXZJ
(its PRC subsidiaries) are considered foreign invested enterprises. To comply with these regulations, the Company operates the live streaming
platforms through SG, HX and LH in PRC (its consolidated VIE). As such, QY is controlled through contractual arrangements in lieu of direct
equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of three agreements and
a shareholder power of attorney (collectively the &#8220;Contractual Arrangements&#8221;, which were signed on January 29, 2019).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_32" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The following
is a summary of the various VIE agreements:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_33" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Exclusive
Option Agreements</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_34" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Pursuant
to the exclusive option agreement (including its amendment or supplementary agreements, if any, the &#8220;Exclusive Option Agreement&#8221;)
amongst WXBJ, QY and the nominee shareholders who collectively owned all of QY, the nominee shareholders irrevocably granted WXBJ or its
designated party, an exclusive option to purchase all or part of the equity interests held by the nominee shareholders in QY, when and
to the extent permitted under PRC law, at an amount equal to the lowest permissible purchase price as set by PRC law. QY cannot declare
any profit distributions, or create any encumbrances in any form without the prior written consent of WXBJ. The nominee shareholders must
remit in full any funds received from QY to WXBJ, in the event any distributions are made by the VIE pursuant to any written consents
of WXBJ.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_35" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Exclusive
Option Agreement shall remain effective for&#160;<span style="-sec-ix-hidden: hidden-fact-223">twenty</span>&#160;(20)&#160;years&#160;and shall be automatically extended for an additional
period of&#160;<span style="-sec-ix-hidden: hidden-fact-224">one</span>&#160;(1)&#160;year. The additional period automatically enters the renewal extension of&#160;<span style="-sec-ix-hidden: hidden-fact-225">one</span>&#160;(1)&#160;year&#160;at
the end of each extended additional period. WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days&#8217;
prior termination notice.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_36" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Exclusive
Business Cooperation Agreements</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_37" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_36"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Pursuant
to the exclusive business cooperation agreement (including its amendment or supplementary agreements, if any, the &#8220;Exclusive Business
Cooperation Agreement&#8221;) between WXBJ and the VIE, WXBJ is to provide exclusive business support, technical and consulting services
related to all technologies needed for its business in return for fees that equals to all of the consolidated net income after offsetting
previous year&#8217;s loss (if any) of SG, HX and LH.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 163; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_38" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_37"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The service
fees may be adjusted by WXBJ based on the following factors:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_39" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_38"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">complexity and difficulty of the
services pursuant to the business cooperation agreement to the VIE during the month (the &#8220;Monthly Services&#8221;)</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_40" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_39"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the number of WXBJ&#8217;s
employees who provided the Monthly Services and the qualifications of the employees;</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_41" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_40"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the number of hours WXBJ&#8217;s
employees spent to provide the Monthly Services;</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_42" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_41"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">nature and value of the Monthly
Services;</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_43" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_42"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">market reference price; and</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_44" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_43"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the VIE&#8217; operating conditions
for the month.</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_45" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_44"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The term
of the Exclusive Business Cooperation Agreement is&#160;<span style="-sec-ix-hidden: hidden-fact-226">twenty</span>&#160;(20)&#160;years&#160;and shall be automatically extended for an additional
period of&#160;<span style="-sec-ix-hidden: hidden-fact-227">one</span>&#160;(1)&#160;year. The additional period automatically enters the renewal extension of&#160;<span style="-sec-ix-hidden: hidden-fact-228">one</span>&#160;(1)&#160;year&#160;at
the end of each extended additional period. Besides, WXBJ has the right to terminate this agreement at any time after giving a thirty
(30) days&#8217; prior termination notice.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_46" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_45"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Power
of Attorney Agreements</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_47" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_46"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The nominee
shareholders entered into the power of attorney agreement (including its amendment or supplementary agreements, if any, the &#8220;Power
of Attorney Agreement&#8221;) whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests
in the VIE to WXBJ, which includes, but are not limited to, all the shareholders&#8217; rights and voting rights empowered to the nominee
shareholders by the PRC company law and the VIE&#8217;s Article of Association. The power of attorney remains irrevocable and continuously
valid from the date of execution so long as each shareholder remains as a shareholder of QY.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_48" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_47"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Share
Pledge Agreements</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_49" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_48"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Pursuant
to the share pledge agreement (including its amendment or supplementary agreements, if any, the &#8220;Share Pledge Agreement&#8221;)
between WXBJ, QY and the nominee shareholders, the nominee shareholders have pledged all their equity interests in the VIE to guarantee
the performance of the VIE&#8217; obligations under the Exclusive Option Agreement, Exclusive Business Cooperation Agreement and Power
of Attorney Agreement.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_50" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_49"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>If the VIE
breaches their respective contractual obligations under those agreements, WXBJ, as pledgee, will be entitled to certain rights, including
the right to sell the pledged equity interests. The nominee shareholders agreed not to transfer, sell, pledge, dispose of or otherwise
create any new encumbrance on their equity interests in the VIE without the prior written consent of WXBJ. The Share Pledge Agreement
shall be continuously valid until all the its obligations under the VIE Agreements have been fulfilled, or the VIE Agreements are terminated,
or the secured debts has been fully executed.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_51" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_50"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Based on
the foregoing contractual arrangements, which grant WXBJ effective control of QY and its subsidiaries and obligate WXBJ to absorb all
of the risk of loss from their activities and enable WXBJ to receive all of their expected residual returns, the Company accounts for
QY as a VIE. Accordingly, the Company consolidates the accounts of QY for the periods presented herein, in accordance with Regulation
S-X-3A-02 promulgated by the Securities Exchange Commission (&#8220;SEC&#8221;) and Accounting Standards Codification (&#8220;ASC&#8221;)
810-10, Consolidation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 164; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization (continued)</i></b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_52" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_51"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Contractual Arrangements among WXZJ, QYHZ,
and the Shareholders of QYHZ.</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_53" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_52"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On
June 1, 2022, the Company through its wholly-owned subsidiary, Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd. (WXZJ),
entered into a series of contractual arrangements with QYHZ (Hangzhou) Culture Technology Co., Ltd. (&#8220;QYHZ&#8221;) and its
shareholders, thereby in substance obtained control over all equity shares, risks and economic benefits of Xiuli (Zhejiang) Culture
Technology Co., Ltd., Leku (Zhejiang) Culture Technology Co., Ltd., Haifan (Zhejiang) Culture Technology Co., Ltd., Xiangfeng
(Zhejiang) Culture Technology Co., Ltd. and Hongren (Zhejiang) Culture Technology Co., Ltd. The Company will commence its operations
in Hangzhou after effecting the agreements under such contractual arrangements (the &#8220;VIE Agreements&#8221;) as de scribed
below. The Company intends to integrate its supply chain resources, local resources, and geographical advantages to achieve rapid
growth in livestreaming commerce, Multi-Channel Network development, and new technology development, as well as accelerating the
development of a Metaverse eco-system.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_54" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_53"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Materials
terms and conditions of the VIE Agreements, including an Exclusive Option Agreement, the Power of Attorney Agreement, a Share Pledge Agreement
and an Exclusive Business Cooperation Agreement, are described as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_55" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_54"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Exclusive
Option Agreement.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_56" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_55"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Pursuant
to the Exclusive Option Agreement (including any supplementary agreement thereto, if any) entered into by and among WXZJ, QYHZ and all
the shareholders of QYHZ, the shareholders of QYHZ hereby irrevocably grant to WXZJ or its designee, to the extent permitted by the laws
of the People&#8217;s Republic of China, the exclusive right to purchase all or part of the equity interest held by such shareholders
at the lowest purchase price permitted by the laws of the People&#8217;s Republic of China. Without the written consent of WXZJ, QYHZ
may not distribute any profits or create any encumbrance in any manner. If QYHZ makes the profit distribution with WXZJ&#8217;s written
consent, QYHZ&#8217;s shareholders shall pay all of any funds received by them to WXZJ.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_57" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_56"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The term
of the Exclusive Option Agreement is <ix:nonNumeric contextRef="c88" format="ixt-sec:durwordsen" name="sj:LongTermEffectiveTermYear">twenty years</ix:nonNumeric> and will be automatically renewed for <ix:nonNumeric contextRef="c88" format="ixt-sec:durwordsen" name="sj:TermRenewed">one year</ix:nonNumeric>. Upon the expiration of each renewed
term, the Exclusive Option Agreement will be automatically renewed for one year. In the meantime, WXZJ shall have the right to terminate
the Exclusive Option Agreement at any time by giving a three days&#8217; prior notice.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_58" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_57"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Power of
Attorney Agreements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_59" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_58"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>WXZJ has
entered into a Power of Attorney Agreement (the &#8220;Power of Attorney,&#8221; including any supplementary agreements, if any) with
each shareholder of QYHZ, pursuant to which each such shareholder grants the proxy rights to Zhejiang WFOE in connection with his equity
interest in QYHZ, including, without limitation, all the shareholders&#8217; beneficial rights and voting rights conferred by the Company
Law of the People&#8217;s Republic of China and the Articles of Association of QYHZ. Each Power of Attorney Agreement shall be irrevocable
from the date of execution and shall continue to be valid until the relevant shareholder no longer holds QYHZ&#8217;s equity interest.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_60" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_59"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Share Pledge
Agreement.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_61" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_60"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In accordance
with the Share Pledge Contract (including any supplementary agreement thereto, if any) entered into by and among Zhejiang WFOE, QYHZ and
each of the shareholders of QYHZ, each shareholder of QYHZ has pledged all of QYHZ&#8217;s equity interest held by such shareholder to
guarantee the respective performance of QYHZ and such shareholder under the Exclusive Option Contract, the Exclusive Business Cooperation
Agreement and the Power of Attorney Agreement, as applicable.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_62" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_61"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>If QYHZ
or any of its shareholders breaches its contractual obligations under any VIE Agreements, Zhejiang WFOE, as the pledgee, will have certain
rights, including the sale of the pledged equity interest. The shareholders agree that, without the prior written consent of Zhejiang
WFOE, they shall not transfer, sell, pledge, dispose of or in any other manner create any new encumbrance upon their equity interest in
QYHZ. The Share Pledge Agreement shall remain effective until all obligations under the VIE Agreements have been performed, or the VIE
Agreements have been terminated, or all obligations under the VIE Agreements have been fully performed.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 165; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization (continued)</i></b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_63" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_62"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Exclusive
Business Cooperation Agreement</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_64" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_63"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In accordance
with the Exclusive Business Cooperation Agreement between WXZJ and QYHZ (including supplementary agreements thereto, if any), WXZJ will
provide QYHZ with exclusive business support and all business-related technologies and consulting services in order to obtain the fees
equal to the consolidated net income of Xiuli (Zhejiang) Culture Tech Co., Ltd., Leku (Zhejiang) Culture Tech Co., Ltd., Haifan (Zhejiang)
Culture Tech Co., Ltd., Xiangfeng (Zhejiang) Culture Tech Co., Ltd. and Hongren (Zhejiang) Culture Tech Co., Ltd. after deducting losses
of the previous year (if any). WXZJ may adjust the service fees according to the following factors:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_65" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_64"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt; ">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt; ">Quarterly
based on the complexity and difficulty of the services provided pursuant to the Exclusive Business Cooperation Agreement during such
quarter (&#8220;Quarterly Services&#8221;);the number of WXZJ&#8217;s employees who provided the Quarterly Services and the qualifications
of these employees;</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_66" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_65"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt; ">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt; ">The
number of hours Zhejiang WFOE&#8217;s employees spent to provide the Quarterly Services;</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_67" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_66"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt; ">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt; ">The
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_68" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_67"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt; ">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt; ">market
reference price; and</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_69" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_68"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt; ">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt; ">QYHZ&#8217;s
operating conditions.</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_70" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_69"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The term
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renewal term, the Exclusive Business Cooperation Agreement can be automatically renewed for one year. In addition, WXZJ shall have the
right to terminate this agreement at any time by giving a three-day notice on the termination of this Agreement.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_71" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_70"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Based on
the foregoing contractual arrangements, which grant WXZJ effective control of QYHZ and its subsidiaries and obligate WXZJ to absorb all
of the risk of loss from their activities and enable WXZJ to receive all of their expected residual returns, the Company accounts for
QYHZ as a VIE. Accordingly, the Company consolidates the accounts of QYHZ for the periods presented herein, in accordance with Regulation
S-X-3A-02 promulgated by the Securities Exchange Commission (&#8220;SEC&#8221;) and Accounting Standards Codification (&#8220;ASC&#8221;)
810-10, Consolidation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 166; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_72" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_71"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The following
tables represent the financial information of the consolidated VIE and its subsidiaries as of December 31, 2021 and 2022 before eliminating
the intercompany balances and transactions between the VIE and other entities within the Company:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_73" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_72"><ix:nonNumeric contextRef="c0" continuedAt="sj_ScheduleOfConsolidatedFinancialStatementsOfBalanceSheetsTextBlock-c0_cont_1" escape="true" name="sj:ScheduleOfConsolidatedFinancialStatementsOfBalanceSheetsTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">TOTAL ASSETS</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left">Current liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Accounts payable</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Deferred revenue</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Accrued salary and employee benefits</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Accrued expenses and other current liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c159" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesAndOtherLiabilities" scale="3" unitRef="cny">5,225</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesAndOtherLiabilities" scale="3" unitRef="cny">7,014</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesAndOtherLiabilities" scale="3" unitRef="usd">1,017</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Income tax payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c159" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedIncomeTaxesCurrent" scale="3" unitRef="cny">8,801</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedIncomeTaxesCurrent" scale="3" unitRef="cny">12,538</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedIncomeTaxesCurrent" scale="3" unitRef="usd">1,818</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-size: 10pt">Amounts due to inter-companies<sup>(1)</sup></span></td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" id="ix_65_fact" name="sj:AmountsDueToIntercompanies" scale="3" unitRef="usd">56,458</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Current portion of contingent consideration &#8211; earn-out liability</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Lease liability-operating lease -current</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="3" unitRef="cny">7,174</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="3" unitRef="usd">1,040</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Total current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c159" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="3" unitRef="cny">441,140</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="3" unitRef="cny">571,535</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="3" unitRef="usd">82,865</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Non-current liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Deferred tax liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c159" decimals="-3" format="ixt:num-dot-decimal" name="sj:DeferredTaxLiability" scale="3" unitRef="cny">58,746</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="sj:DeferredTaxLiability" scale="3" unitRef="cny">61,236</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c160" decimals="-3" format="ixt:num-dot-decimal" name="sj:DeferredTaxLiability" scale="3" unitRef="usd">8,878</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_74" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_73"><ix:continuation id="sj_ScheduleOfConsolidatedFinancialStatementsOfBalanceSheetsTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><ix:footnote id="ix_3_footnote" xml:lang="en-US"><span style="font-size: 10pt">Amount due from/to inter-companies
consist of intercompany receivables/payables to the other companies within the Company.</span></ix:footnote></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>


</div><!-- Field: Page; Sequence: 167; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Organization (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_75" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_74"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>All revenue-producing
assets recognized by the Company, including trademarks, patents, copyrights and software, that are held by the VIE, please refer to Note
8. There are no unrecognized revenue-producing assets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_76" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_75"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Summarized
below is the information related to the financial performance of the VIE reported in the Company&#8217;s consolidated statements of income
for the years ended December 31, 2020, 2021 and 2022, respectively:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>


</div><!-- Field: Page; Sequence: 168; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
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Basis of presentation and principles of consolidation</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_3" id="_SignificantAccountingPoliciesTextBlock-c0_cont_2"><ix:continuation continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_2" id="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The accompanying
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_4" id="_SignificantAccountingPoliciesTextBlock-c0_cont_3"><ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The consolidated
financial statements include the financial statements of the Company and its subsidiaries, and its VIE and VIE&#8217;s subsidiaries over
which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the
primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIE are eliminated
upon consolidation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_5" id="_SignificantAccountingPoliciesTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" continuedAt="_BusinessCombinationsPolicy-c0_cont_1" escape="true" name="us-gaap:BusinessCombinationsPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(b)
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_6" id="_SignificantAccountingPoliciesTextBlock-c0_cont_5"><ix:continuation id="_BusinessCombinationsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
accounts for all business combinations under the purchase method of accounting in accordance with ASC 805, Business Combinations (&#8220;ASC
805&#8221;). The purchase method of accounting requires that the consideration transferred to be allocated to net assets including separately
identifiable assets and liabilities the Company acquired, based on their estimated fair value. The consideration transferred in an acquisition
is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments
issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable
to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured
separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of
(i) the total of the cost of the acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously
held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill.
If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference is recognized directly
in earnings. The determination and allocation of fair values to the identifiable net assets acquired and liabilities assumed is based
on various assumptions and valuation methodologies requiring considerable judgment from management. Although the Company believes that
the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results
may differ from forecasted amounts and the differences could be material.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_7" id="_SignificantAccountingPoliciesTextBlock-c0_cont_6"><ix:nonNumeric contextRef="c0" continuedAt="_UseOfEstimates-c0_cont_1" escape="true" name="us-gaap:UseOfEstimates"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(c)
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_8" id="_SignificantAccountingPoliciesTextBlock-c0_cont_7"><ix:continuation id="_UseOfEstimates-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The preparation
of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include,
but are not limited to revenue recognition, estimating the useful lives of long-lived assets and intangible assets, valuation assumptions
in performing asset impairment tests of long-lived assets, fair value of warrant liabilities and contingent liability, allowance for doubtful
accounts, and valuation of deferred taxes and deferred tax assets. Actual results could differ from those estimates, and as such, differences
may be material to the consolidated financial statements.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_9" id="_SignificantAccountingPoliciesTextBlock-c0_cont_8"><ix:nonNumeric contextRef="c0" continuedAt="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Foreign currency</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_10" id="_SignificantAccountingPoliciesTextBlock-c0_cont_9"><ix:continuation continuedAt="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_2" id="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The functional
currency of the Company is in US dollars and the functional currency of the Company&#8217;s subsidiaries and VIEs are Renminbi (&#8220;RMB&#8221;),
as determined based on the criteria of Accounting Standards Codification (&#8220;ASC&#8221;) 830 (&#8220;ASC 830&#8221;) &#8220;Foreign
Currency Matters&#8221;. The reporting currency of the Company is also the RMB.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_11" id="_SignificantAccountingPoliciesTextBlock-c0_cont_10"><ix:continuation continuedAt="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_3" id="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Monetary
assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the
rates of exchange in place at the balance sheet date. Transactions in currencies other than the functional currency during the year are
converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains
and losses are recognized in the consolidated statement of operations.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_12" id="_SignificantAccountingPoliciesTextBlock-c0_cont_11"><ix:continuation id="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Assets and
liabilities of the Company translated from their respective functional currencies to the reporting currency at the exchange rates at the
balance sheet dates, equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average
exchange rates in effect during the reporting period. The resulting foreign currency translation adjustment are recorded in other comprehensive
income (loss).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

</div><!-- Field: Page; Sequence: 169; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_13" id="_SignificantAccountingPoliciesTextBlock-c0_cont_12"><ix:nonNumeric contextRef="c0" continuedAt="sj_ConvenienceTranslationPolicyTextBlock-c0_cont_1" escape="true" name="sj:ConvenienceTranslationPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(e)
Convenience translation</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_14" id="_SignificantAccountingPoliciesTextBlock-c0_cont_13"><ix:continuation id="sj_ConvenienceTranslationPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Translations
of balances in the consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB into
USD (or &#8220;US$&#8221;) as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were calculated
at the rate of US$<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentConvertibleConversionPrice1" scale="0" unitRef="usdPershares">1.00</ix:nonFraction> = RMB&#160;<ix:nonFraction contextRef="c5" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentConvertibleConversionPrice1" scale="0" unitRef="cnyPershares">6.8792</ix:nonFraction>, representing the noon buying rate in The City of New York for cable transfers of RMB as certified
for customs purposes by the Federal Reserve Bank of New York on the last trading day of December 31, 2022. No representation is made that
the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_15" id="_SignificantAccountingPoliciesTextBlock-c0_cont_14"><ix:nonNumeric contextRef="c0" continuedAt="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>(f) Cash and cash
equivalents</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use and have
original maturities less than three&#160;months. All highly liquid investments with a stated maturity of 90&#160;days or less from the
date of purchase are classified as cash equivalents.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_17" id="_SignificantAccountingPoliciesTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" continuedAt="_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy-c0_cont_1" escape="true" name="us-gaap:ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>(g) Accounts receivable and allowance for
doubtful accounts</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_18" id="_SignificantAccountingPoliciesTextBlock-c0_cont_17"><ix:continuation continuedAt="_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy-c0_cont_2" id="_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Accounts
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_19" id="_SignificantAccountingPoliciesTextBlock-c0_cont_18"><ix:continuation continuedAt="_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy-c0_cont_3" id="_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company
determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical collection
experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the Company makes
specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible.
The facts and circumstances for each account may require the Company to use substantial judgment in assessing its collectability.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_20" id="_SignificantAccountingPoliciesTextBlock-c0_cont_19"><ix:continuation id="_ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Account
balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not
probable.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_21" id="_SignificantAccountingPoliciesTextBlock-c0_cont_20"><ix:nonNumeric contextRef="c0" continuedAt="_InvestmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:InvestmentPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(h)
Investment in marketable security</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_22" id="_SignificantAccountingPoliciesTextBlock-c0_cont_21"><ix:continuation id="_InvestmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Marketable
securities consist of investments in equity securities with readily determinable fair values. Marketable equity securities that are bought
and held principally for the purpose of selling them in the near term are classified as trading securities, in accordance with ASC 320.
The Company accounts for investments in marketable equity securities with readily determinable fair values in accordance with ASC Topic
321, Investments - Equity Securities (&#8220;ASC 321&#8221;). These investments are measured at fair value with the related gains and
losses, including unrealized, recognized in investment income (loss).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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Property and equipment</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_24" id="_SignificantAccountingPoliciesTextBlock-c0_cont_23"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Property
and equipment are stated at cost, net of accumulated depreciation using the straight-line method over their estimated useful lives, once
the asset is placed in service.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_25" id="_SignificantAccountingPoliciesTextBlock-c0_cont_24"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The estimated
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_26" id="_SignificantAccountingPoliciesTextBlock-c0_cont_25"><ix:nonNumeric contextRef="c0" escape="true" name="sj:ScheduleOfEstimatedUsefulLivesTableTextBlock"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_4" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_27" id="_SignificantAccountingPoliciesTextBlock-c0_cont_26"><ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Repair and
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are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related
accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of income. The Company also re-evaluates
the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 170; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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Intangible assets</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

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assets are carried at cost less accumulated amortization and any impairment. License for Beelive platform is determined to have an infinite
useful life and is not subject to amortization and tested for impairment at least annually. Intangible assets with a finite useful life
are amortized using the straight-line method over the estimated economic life of the intangible assets as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_30" id="_SignificantAccountingPoliciesTextBlock-c0_cont_29"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfImpairedIntangibleAssetsTextBlock"><ix:continuation id="_IntangibleAssetsFiniteLivedPolicy-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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  <tr style="vertical-align: bottom">
    <td><span style="font-size: 10pt">Patent</span></td>
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td style="vertical-align: bottom">&#160;</td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_31" id="_SignificantAccountingPoliciesTextBlock-c0_cont_30"><ix:nonNumeric contextRef="c0" continuedAt="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(k)
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_32" id="_SignificantAccountingPoliciesTextBlock-c0_cont_31"><ix:continuation id="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
evaluates its long-lived assets or asset group, including property and equipment and intangible assets including license that has an infinite
useful life, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that
will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable.
When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net
cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash
flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying
amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated
by the assets, when the market prices are not readily available for the long-lived assets. No impairment of long-lived assets was recognized
for the years ended December 31 2020, 2021 and 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_33" id="_SignificantAccountingPoliciesTextBlock-c0_cont_32"><ix:nonNumeric contextRef="c0" continuedAt="_GoodwillAndIntangibleAssetsGoodwillPolicy-c0_cont_1" escape="true" name="us-gaap:GoodwillAndIntangibleAssetsGoodwillPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(l)
Goodwill</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_34" id="_SignificantAccountingPoliciesTextBlock-c0_cont_33"><ix:continuation id="_GoodwillAndIntangibleAssetsGoodwillPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Goodwill
represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination.
Goodwill is not subject to amortization but is monitored annually for impairment or more frequently if there are indicators of impairment.
Management considers the following potential indicators of impairment: significant underperformance relative to historical or projected
future operating results, significant changes in the Company&#8217;s use of acquired assets or the strategy of the Company&#8217;s overall
business, significant negative industry or economic trends and a significant decline in the Company&#8217;s stock price for a sustained
period. The Company performs its impairment test on annual basis. Currently, the Company&#8217;s goodwill is evaluated at the entity level
as it has been determined there is&#160;one&#160;operating segment comprised of one reporting unit. When assessing goodwill for impairment
the Company first performs a qualitative assessment to determine whether it is necessary to perform a quantitative analysis. If the Company
determines it is unlikely that the reporting unit fair value is less than its carrying value then no quantitative assessment is performed.
If the Company cannot determine that it is likely that the reporting unit fair value is more than its carrying value, then the Company
performs a quantitative assessment. Based on the qualitative assessment performed for the year ended December 31, 2022, the Company determined
it was unlikely that it&#8217;s reporting unit fair value was less than its carrying value and no quantitative assessment was required.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_35" id="_SignificantAccountingPoliciesTextBlock-c0_cont_34"><ix:nonNumeric contextRef="c0" continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_1" escape="true" name="us-gaap:RevenueRecognitionLongTermContracts"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(m)
Long term investment</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_36" id="_SignificantAccountingPoliciesTextBlock-c0_cont_35"><ix:continuation continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_2" id="_RevenueRecognitionLongTermContracts-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>ASU 2016-01
(&#8220;ASU 2016-01&#8221;), Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition,
measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted
for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through
earnings, unless they qualify for a measurement alternative. The Company adopted the new financial instruments accounting standard from
January 1, 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_37" id="_SignificantAccountingPoliciesTextBlock-c0_cont_36"><ix:continuation continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_3" id="_RevenueRecognitionLongTermContracts-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Equity
Investments with Readily Determinable Fair Values</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><ix:continuation continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_4" id="_RevenueRecognitionLongTermContracts-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Equity investments
with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in
active markets at the reporting date.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_39" id="_SignificantAccountingPoliciesTextBlock-c0_cont_38"><ix:continuation continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_5" id="_RevenueRecognitionLongTermContracts-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Equity
investments without readily determinable fair values</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_40" id="_SignificantAccountingPoliciesTextBlock-c0_cont_39"><ix:continuation continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_6" id="_RevenueRecognitionLongTermContracts-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>After the
adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values and
not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring
basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity
investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_41" id="_SignificantAccountingPoliciesTextBlock-c0_cont_40"><ix:continuation continuedAt="_RevenueRecognitionLongTermContracts-c0_cont_7" id="_RevenueRecognitionLongTermContracts-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Equity
investments accounted for using the equity method</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_42" id="_SignificantAccountingPoliciesTextBlock-c0_cont_41"><ix:continuation id="_RevenueRecognitionLongTermContracts-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control,
using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share
of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary
impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the
entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination,
particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes
in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified
impairment is other-than-temporary.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 172; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_43" id="_SignificantAccountingPoliciesTextBlock-c0_cont_42"><ix:nonNumeric contextRef="c0" continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:FairValueMeasurementPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(n)
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_44" id="_SignificantAccountingPoliciesTextBlock-c0_cont_43"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_2" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Fair value
is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants
would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance
with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_45" id="_SignificantAccountingPoliciesTextBlock-c0_cont_44"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_3" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_48" id="_SignificantAccountingPoliciesTextBlock-c0_cont_47"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_6" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The carrying
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expenses and other current assets, accounts payables, balances with related parties and other current liabilities, approximate their fair
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</div><div>

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</div><div>

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</div><div>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 173; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(n)
Fair value of financial instruments (continued)</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_52" id="_SignificantAccountingPoliciesTextBlock-c0_cont_51"><ix:continuation id="_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock-c0_cont_1"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_10" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_9"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p></ix:continuation></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_53" id="_SignificantAccountingPoliciesTextBlock-c0_cont_52"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_11" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Contingent
consideration &#8211; earn-out liability</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_54" id="_SignificantAccountingPoliciesTextBlock-c0_cont_53"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_12" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt">(i)
Earn-out liability from SPAC transaction</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_55" id="_SignificantAccountingPoliciesTextBlock-c0_cont_54"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_13" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In
connection with SPAC transaction, the previous shareholders of Scienjoy Inc. may be entitled to receive earnout shares as follows:
(1) if Scienjoy Inc.&#8217;s net income before tax for the year ended December 31, 2020 is greater than or equal to either
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of the Company (&#8220;SPAC Earn-out Target 2020&#8221;); and (2) if Scienjoy Inc.&#8217;s net income before tax for the year ended
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owners of Scienjoy Inc. otherwise will receive (i) <ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">3,000,000</ix:nonFraction> earn-out shares if the
share price of the Company is higher than $<ix:nonFraction contextRef="c166" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">20.00</ix:nonFraction> for any sixty days in any period of ninety consecutive trading days between May 8,
2021 and May 7, 2022, and (ii) <ix:nonFraction contextRef="c167" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">3,000,000</ix:nonFraction> earnout shares if the share price of the Company is higher than $<ix:nonFraction contextRef="c168" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">25.00</ix:nonFraction> for any sixty days
in any period of ninety consecutive trading between May 8, 2022 and May 7, 2023. For the years ended December 31, 2020 and 2021, the SPAC Earn-out Target 2020 and 2021 were met and the Company
issued an aggregated of <ix:nonFraction contextRef="c8" decimals="-6" format="ixt:num-dot-decimal" name="sj:EarnoutShare" scale="6" unitRef="shares">6</ix:nonFraction> million earn-out shares accordingly (Note 15).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_56" id="_SignificantAccountingPoliciesTextBlock-c0_cont_55"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_14" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Upon the
closing of the SPAC Transaction, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from May 8, 2020 to December 31, 2021 in earnings. The Company determined the fair value of the
contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair
value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate,
to generate individual stock price paths. The major assumptions used in the binomial model are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_57" id="_SignificantAccountingPoliciesTextBlock-c0_cont_56"><ix:nonNumeric contextRef="c0" continuedAt="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_1" escape="true" name="us-gaap:FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_15" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_14"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">May&#160;7,<br/> 2020</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left">Risk-free interest rate</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>Share price</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation></ix:nonNumeric></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 174; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(n)
Fair value of financial instruments (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_58" id="_SignificantAccountingPoliciesTextBlock-c0_cont_57"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_16" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt">(ii)
Earn-out liability from BeeLive acquisition</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_59" id="_SignificantAccountingPoliciesTextBlock-c0_cont_58"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_17" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In connection
with the acquisition of Beelive (Note 4), the previous shareholders of BeeLive may be entitled to receive earnout shares as follows: (i)
if the BeeLive Company&#8217;s total annual revenue is no less than RMB<ix:nonFraction contextRef="c169" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:RevenuesNetOfInterestExpense" scale="6" unitRef="cny">336.6</ix:nonFraction> million in Year 2020,the previous shareholder will be entitled
to received additional <ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfAdditionalSharesAuthorized" scale="0" unitRef="shares">540,960</ix:nonFraction> Class A ordinary shares (&#8220;Beelive Earn-out Target 2020&#8221;); (ii) if the BeeLive Companies&#8217;
total annual revenue is no less than RMB<ix:nonFraction contextRef="c171" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:RevenuesNetOfInterestExpense" scale="6" unitRef="cny">460.6</ix:nonFraction> million in Year 2021 (&#8220;Beelive Earn-out Target 2021&#8221;), the previous shareholder
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is no less than RMB <ix:nonFraction contextRef="c173" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:RevenuesNetOfInterestExpense" scale="6" unitRef="cny">580.9</ix:nonFraction> million in Year 2022 (&#8220;Beelive Earn-out Target 2022&#8221;), the previous shareholder will be entitled
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will be entitled to a reduced number of the earn-out shares. For the years ended December 31, 2020, 2021 and 2022, the Beelive Earn-out Target 2020, 2021 and 2022 were met
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_60" id="_SignificantAccountingPoliciesTextBlock-c0_cont_59"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_18" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Upon the
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and recorded the changes in fair value from the acquisition date to December 31, 2022 in earnings. The Company determined the fair value
of the contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in
the fair value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend
rate, to generate individual stock price paths. The major assumptions used in the binomial model are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_61" id="_SignificantAccountingPoliciesTextBlock-c0_cont_60"><ix:continuation continuedAt="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_2" id="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_1"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_19" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_18"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
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    <td style="white-space: nowrap; padding-bottom: 1.5pt; vertical-align: bottom; text-align: center">&#160;</td>
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2020</b></span></td>
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2020</b></span></td>
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2021</b></span></td>
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2022</b></span></td>
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    </tr>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_62" id="_SignificantAccountingPoliciesTextBlock-c0_cont_61"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_20" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>(iii) Earn-out
liability from Weiliantong acquisition</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_63" id="_SignificantAccountingPoliciesTextBlock-c0_cont_62"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_21" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In connection
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consideration (Class A ordinary shares); If the total annual revenue of Weiliantong Company in a particular performance year does not
reach the target revenue as specified above, but is equal to or more than <ix:nonFraction contextRef="c179" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">80</ix:nonFraction>% of the target revenue, the previous shareholder will be
entitled to a reduced number of the earn-out shares. For the years ended December
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_64" id="_SignificantAccountingPoliciesTextBlock-c0_cont_63"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_22" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Upon the
closing of the Weiliantong acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value in earnings. The Company determined the fair value of the contingent consideration using binomial
model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial model uses
random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual stock price
paths. The major assumptions used are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_65" id="_SignificantAccountingPoliciesTextBlock-c0_cont_64"><ix:continuation continuedAt="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_3" id="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_2"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_23" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_22"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 175; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(n)
Fair value of financial instruments (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_66" id="_SignificantAccountingPoliciesTextBlock-c0_cont_65"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_24" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
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31, 2021 and 2022. The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring
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</div><div>

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</div><div>

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RMB13,106&#160;as shares to be issued in the equity of the Company. As of December 31, 2022, there was&#160;995,118&#160;earn-out
shares required to be issued and the Company included it in the calculation of earnings per share. Upon issuance of this report, a
total of 507,804 shares (540,960 * 93.87%) has been issued to Cosmic Soar, the
previous shareholder of Beelieve and a total of 487,314 share has been issue to Wolter Global, the previous shareholder of
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_69" id="_SignificantAccountingPoliciesTextBlock-c0_cont_68"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_27" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2020, 2021 and 2022. The following
is a reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring basis using
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</div><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_71" id="_SignificantAccountingPoliciesTextBlock-c0_cont_70"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_29" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The aggregated
contingent considerations for the earn-out liabilities were approximate RMB<ix:nonFraction contextRef="c4" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilities" scale="6" unitRef="cny">10.6</ix:nonFraction>&#160;million and RMB<ix:nonFraction contextRef="c5" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilities" scale="6" unitRef="cny">4.3</ix:nonFraction> million as of December 31, 2021
and 2022, respectively. The balance of contingent consideration for the earn-out liabilities are classified as current liability due to
short term nature. </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(n)
Fair value of financial instruments (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_72" id="_SignificantAccountingPoliciesTextBlock-c0_cont_71"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_30" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span><i>Warrant liabilities</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_73" id="_SignificantAccountingPoliciesTextBlock-c0_cont_72"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_31" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company&#8217;s
warrants assumed from SPAC acquisition on May 7,2020, the date of the closing of SPAC Transaction, that have complex terms, such as a
clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash upon
a fundamental transaction that is considered outside of the control of management are considered to be a derivative as contemplated in
ASC 815-40. The warrant is recorded as derivative liability on the consolidated balance sheet upon the SPAC transaction and is adjusted
to its fair value at the end of each reporting period, with the change being recorded as other expense or gain in accordance with ASC
820.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_74" id="_SignificantAccountingPoliciesTextBlock-c0_cont_73"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_32" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The warrant
liabilities were measured and recorded on a recurring basis. The Company determined the fair value of the contingent consideration using
binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial
model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual
stock price paths. The major assumptions used in the binomial model are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_75" id="_SignificantAccountingPoliciesTextBlock-c0_cont_74"><ix:continuation id="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_3"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_33" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_32"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_76" id="_SignificantAccountingPoliciesTextBlock-c0_cont_75"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_34" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The following&#160;table
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_77" id="_SignificantAccountingPoliciesTextBlock-c0_cont_76"><ix:continuation id="_FairValueAssetsMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock-c0_cont_1"><ix:continuation id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_34"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>


</div><!-- Field: Page; Sequence: 177; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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Revenue recognition</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_79" id="_SignificantAccountingPoliciesTextBlock-c0_cont_78"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_2" id="_RevenueRecognitionPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On January
1, 2019, the Company adopted ASC 606, &#8220;Revenue from Contracts with Customers&#8221; using the modified retrospective method applied
to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented
under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company&#8217;s historic
accounting under Topic 605. Based on the Company&#8217;s assessment, the adoption of ASC 606 did not result in any adjustment on the Company&#8217;s
consolidated financial statements, and there were no material differences between the Company&#8217;s adoption of ASC 606 and its historic
accounting under ASC 605.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_80" id="_SignificantAccountingPoliciesTextBlock-c0_cont_79"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_3" id="_RevenueRecognitionPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Revenues
are recognized when control of the promised virtual items or services is transferred to the Company&#8217;s customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those virtual items or services. Revenue is recorded,
net of sales related taxes and surcharges.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_81" id="_SignificantAccountingPoliciesTextBlock-c0_cont_80"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_4" id="_RevenueRecognitionPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Live
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_82" id="_SignificantAccountingPoliciesTextBlock-c0_cont_81"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_5" id="_RevenueRecognitionPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
is principally engaged in operating its own live streaming platforms, which enable broadcasters and viewers to interact with each other
during live streaming. The Company is responsible for providing a technological infrastructure to enable the broadcasters, online users
and viewers to interact through live streaming platforms. All the platforms can be accessed for free. The Company mainly derives the revenue
from sales of virtual items in the platforms. The Company has a recharge system for users to purchase the Company&#8217;s virtual currency
then purchase virtual items for use. Users can recharge via various online third-party payment platforms, including WeChat Pay, AliPay
and other payment platforms. Virtual currency is non-refundable and often consumed soon after it is purchased.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_83" id="_SignificantAccountingPoliciesTextBlock-c0_cont_82"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_6" id="_RevenueRecognitionPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
designs, creates and offers various virtual items for sales to users with pre-determined stand-alone selling price. Virtual items are
categorized as consumable and time-based items. Consumable items are consumed upon purchase and use while time-based items could be used
for a fixed period of time. Users can purchase and present consumable items to broadcasters to show support for their favorite broadcasters,
or purchase time-based virtual items for one or multiple months for a monthly fee, which provide users with recognized status, such as
priority speaking rights or special symbols over a period of time.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_84" id="_SignificantAccountingPoliciesTextBlock-c0_cont_83"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_7" id="_RevenueRecognitionPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
shares a portion of the sales proceeds of virtual items (&#8220;revenue sharing fee&#8221;) with broadcasters and talent agencies in accordance
with their revenue sharing arrangements. Broadcasters, who do not have revenue sharing arrangements with the Company, are not entitled
to any revenue sharing fee. The Company also utilizes third-party payment collection channels, which charges the payment handling cost
for users to purchase the virtual currency directly from it. The payment handling costs are recorded in cost of sales.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_85" id="_SignificantAccountingPoliciesTextBlock-c0_cont_84"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_8" id="_RevenueRecognitionPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
evaluates and determines that it is the principal and views users to be its customers, because the Company controls the virtual items
before they are transferred to users. Its control is evidenced by the Company&#8217;s sole ability to monetize the virtual items before
they are transferred to users, and is further supported by the Company being primarily responsible to the users for the delivery of the
virtual items as well as having full discretion in establishing pricing for the virtual items. Accordingly, the Company reports live streaming
revenues on a gross basis with the amounts billed to users recorded as revenues and revenue sharing fee paid to broadcasters and related
agencies recorded as cost of revenues.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_86" id="_SignificantAccountingPoliciesTextBlock-c0_cont_85"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_9" id="_RevenueRecognitionPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Sales proceeds
are initially recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. The Company has determined
that each individual virtual item represents a distinct performance obligation. Accordingly, live streaming revenue is recognized immediately
when the consumable virtual item is used, or in the case of time-based virtual items, revenue is recognized over the fixed period on a
straight-line basis. The Company does not have further obligations to the user after the virtual items are consumed. The Company&#8217;s
live streaming virtual items are generally sold without right of return and the Company does not provide any other credit and incentive
to its users. Unconsumed virtual currency is recorded as deferred revenue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_87" id="_SignificantAccountingPoliciesTextBlock-c0_cont_86"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_10" id="_RevenueRecognitionPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
also cooperates with independent third-party distributors to sell virtual currency through annual distribution agreements with these distributors.
Third-party distributors purchase virtual currency from the Company with no refund provision according to the annual distribution agreements,
and they are responsible for selling the virtual currency to end users. They may engage their own sales representatives, which are referred
to as &#8220;sales agents&#8221; to directly sell to individual end users. The Company has no control over such &#8220;sales agents&#8221;.
The Company has discretion to determine the price of the virtual currency sold to its third-party distributors, but has no discretion
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</div><div>


</div><!-- Field: Page; Sequence: 178; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(o)
Revenue recognition (continued)</i></b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_88" id="_SignificantAccountingPoliciesTextBlock-c0_cont_87"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_11" id="_RevenueRecognitionPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Technical
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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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Streaming, BeeLive Live Streaming (including BeeLive Chinese version &#8211; Mifeng) and Hongle Live Streaming. The following table sets
forth our revenue by platforms for the periods indicated:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_97" id="_SignificantAccountingPoliciesTextBlock-c0_cont_96"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_20" id="_RevenueRecognitionPolicyTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Contract
balances</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_98" id="_SignificantAccountingPoliciesTextBlock-c0_cont_97"><ix:continuation id="_RevenueRecognitionPolicyTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Contract
balances include accounts receivable and deferred revenue. Accounts receivable primarily represent cash due from distributors and are
recorded when the right to consideration is unconditional. The allowance for doubtful accounts reflects the best estimate of probable
losses inherent to the account receivable balance. Deferred revenue primarily includes unconsumed virtual currency and unamortized revenue
from time-based virtual items in the Company&#8217;s platforms, where there is still an obligation to be provided by the Company, which
will be recognized as revenue when all of the revenue recognition criteria are met. Due to the generally short-term duration of the relevant
contracts, all performance obligations are satisfied within one year.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 179; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_99" id="_SignificantAccountingPoliciesTextBlock-c0_cont_98"><ix:nonNumeric contextRef="c0" continuedAt="sj_GovernmentSubsidiesPolicyTextBlock-c0_cont_1" escape="true" name="sj:GovernmentSubsidiesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(p)
Government subsidies</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_100" id="_SignificantAccountingPoliciesTextBlock-c0_cont_99"><ix:continuation id="sj_GovernmentSubsidiesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Government
subsidies are primarily referred to the amounts received from various levels of local governments from time to time which are granted
for general corporate purposes and to support its ongoing operations in the region. The grants are determined at the discretion of the
relevant government authority and there are no restrictions on their use. The government subsidies amounted to RMB<ix:nonFraction contextRef="c32" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:JapaneseWelfarePensionInsuranceLawGovernmentSubsidies" scale="3" unitRef="cny">111</ix:nonFraction>, RMB<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:JapaneseWelfarePensionInsuranceLawGovernmentSubsidies" scale="3" unitRef="cny">67</ix:nonFraction>, RMB<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherIncome" scale="3" unitRef="cny">10,094</ix:nonFraction>
(US$<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherIncome" scale="3" unitRef="usd">1,464</ix:nonFraction>) for the years ended December 31, 2020, 2021 and 2020 are recorded as other income.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_101" id="_SignificantAccountingPoliciesTextBlock-c0_cont_100"><ix:nonNumeric contextRef="c0" continuedAt="_CostOfSalesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CostOfSalesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(q)
Cost of revenues</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_102" id="_SignificantAccountingPoliciesTextBlock-c0_cont_101"><ix:continuation id="_CostOfSalesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Amounts
recorded as cost of revenue relate to direct expenses incurred in order to generate revenue. Such costs are recorded as incurred. Cost
of revenues consists primarily of (i) revenue sharing fees and content costs, including payments to various broadcasters, and content
providers, (ii) bandwidth costs, (iii) salaries and welfare, (iv) depreciation and amortization expense for servers and other equipment,
and intangibles directly related to operating the platform, (v) user acquisition costs (vi) payment handling costs, and (vii) other costs.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_103" id="_SignificantAccountingPoliciesTextBlock-c0_cont_102"><ix:nonNumeric contextRef="c0" continuedAt="_ResearchAndDevelopmentExpensePolicy-c0_cont_1" escape="true" name="us-gaap:ResearchAndDevelopmentExpensePolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(r)
Research and development expenses</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_104" id="_SignificantAccountingPoliciesTextBlock-c0_cont_103"><ix:continuation id="_ResearchAndDevelopmentExpensePolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Research
and development expenses primarily consist of (1) salaries and benefits expenses incurred for research and development personnel, and
(2) rental, general expenses and depreciation expenses associated with the research and development activities. Expenditures incurred
during the research phase are expensed as incurred and no research and development expenses were capitalized as of December 31, 2021 and
2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_105" id="_SignificantAccountingPoliciesTextBlock-c0_cont_104"><ix:nonNumeric contextRef="c0" continuedAt="_AdvertisingCostsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:AdvertisingCostsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(s)
Sales and marketing expenses</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_106" id="_SignificantAccountingPoliciesTextBlock-c0_cont_105"><ix:continuation id="_AdvertisingCostsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Sales and
marketing expenses consist primarily of advertising and market promotion expenses. The advertising and market promotion expenses amounted
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_107" id="_SignificantAccountingPoliciesTextBlock-c0_cont_106"><ix:nonNumeric contextRef="c0" continuedAt="_PostemploymentBenefitPlansPolicy-c0_cont_1" escape="true" name="us-gaap:PostemploymentBenefitPlansPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(t)
Employee benefits</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_108" id="_SignificantAccountingPoliciesTextBlock-c0_cont_107"><ix:continuation id="_PostemploymentBenefitPlansPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The full-time
employees of the Company&#8217;s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment
insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these
benefits based on certain percentages of the employees&#8217; respective salaries, subject to certain ceilings, in accordance with the
relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_109" id="_SignificantAccountingPoliciesTextBlock-c0_cont_108"><ix:nonNumeric contextRef="c0" continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:LesseeLeasesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(u)
Leases</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

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adopted Topic 842 on January 1, 2022 using the modified retrospective transition approach. The Company has lease contracts office space
under operating leases. The Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use
assets on its consolidated balance sheets at lease commencement. The Company measures its lease liabilities based on the present value
of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental
borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease
payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of weighted average interest
rate of its own bank loans. The Company measures right-of-use assets based on the corresponding lease liability adjusted for payments
made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing
lease expense when the lessor makes the underlying asset available to the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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with lease term less than one year (short-term leases), the Company records operating lease expense in its consolidated statements of
operations on a straight-line basis over the lease term and record variable lease payments as incurred.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 180; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_112" id="_SignificantAccountingPoliciesTextBlock-c0_cont_111"><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(v)
Income taxes</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

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accounts for current income taxes in accordance with the laws of the relevant tax authorities. The Company follows the liability method
in accounting for income taxes in accordance to ASC topic 740 (&#8220;ASC 740&#8221;), Income Taxes. Under this method, deferred tax assets
and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted
tax rates that will be in effect in the period in which the differences are expected to reverse. A valuation allowance would be recorded
against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the
deferred tax assets will not be realized.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_114" id="_SignificantAccountingPoliciesTextBlock-c0_cont_113"><ix:continuation id="_IncomeTaxPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The guidance
on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. Guidance was also provided on recognition of income tax assets and liabilities,
classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions,
accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Company&#8217;s
uncertain tax positions and determining its provision for income taxes. The Company recognizes interests and penalties, if any, under
accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive loss. The
Company did not recognize any interest and penalties associated with uncertain tax positions as of December 31, 2021 and 2022. As of December
31, 2021 and 2022, the Company did not have any significant unrecognized uncertain tax positions.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_115" id="_SignificantAccountingPoliciesTextBlock-c0_cont_114"><ix:nonNumeric contextRef="c0" continuedAt="sj_ValueAddedTaxPolicyTextBlock-c0_cont_1" escape="true" name="sj:ValueAddedTaxPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(w)
Value added tax (&#8220;VAT&#8221;)</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_116" id="_SignificantAccountingPoliciesTextBlock-c0_cont_115"><ix:continuation id="sj_ValueAddedTaxPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Revenue
represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to&#160;<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DerivativeBasisSpreadOnVariableRate" scale="-2" unitRef="pure">13</ix:nonFraction>%, depending
on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against
their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in tax payable. All of the VAT returns filed
by the Company&#8217;s subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the
date of filing.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_117" id="_SignificantAccountingPoliciesTextBlock-c0_cont_116"><ix:nonNumeric contextRef="c0" continuedAt="sj_StatutoryReservesPolicyTextBlock-c0_cont_1" escape="true" name="sj:StatutoryReservesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(x)
Statutory reserves</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_118" id="_SignificantAccountingPoliciesTextBlock-c0_cont_117"><ix:continuation continuedAt="sj_StatutoryReservesPolicyTextBlock-c0_cont_2" id="sj_StatutoryReservesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company&#8217;s
PRC entities are required to make appropriations to certain non-distributable reserve funds.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_119" id="_SignificantAccountingPoliciesTextBlock-c0_cont_118"><ix:continuation continuedAt="sj_StatutoryReservesPolicyTextBlock-c0_cont_3" id="sj_StatutoryReservesPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In accordance
with the laws applicable to China&#8217;s Foreign Investment Enterprises, the Company&#8217;s subsidiaries registered as WFOEs have to
make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by
the Ministry of Finance of the People&#8217;s Republic of China (&#8220;PRC GAAP&#8221;) to reserve funds including general reserve fund
and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least&#160;<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="sj:GeneralReserveFundRate" scale="-2" unitRef="pure">10</ix:nonFraction>% of the after-tax profits calculated
in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached&#160;<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="sj:ReserveFundReachedPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% of the registered capital of the Company.
Appropriation to the staff bonus and welfare fund is at the Company&#8217;s discretion.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_120" id="_SignificantAccountingPoliciesTextBlock-c0_cont_119"><ix:continuation continuedAt="sj_StatutoryReservesPolicyTextBlock-c0_cont_4" id="sj_StatutoryReservesPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In addition,
in accordance with the Company Laws of the PRC, the Company&#8217;s entities registered as PRC domestic companies must take appropriations
from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a
discretionary surplus fund. The appropriation to the statutory surplus fund must be at least&#160;<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="sj:StatutorySurplusFundPercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% of after-tax profits as determined
under the PRC GAAP. Appropriation is not required if the surplus fund has reached&#160;<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="sj:SurplusFundReachedPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% of the registered capital of the Company. Appropriation
to the discretionary surplus fund is made at the discretion of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_121" id="_SignificantAccountingPoliciesTextBlock-c0_cont_120"><ix:continuation id="sj_StatutoryReservesPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The use
of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the off-setting of losses or increasing
capital of the respective company. The staff bonus and welfare fund is liability in nature and is restricted to fund payments of special
bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the Company in terms
of cash dividends, loans or advances, nor can they be distributed except under liquidation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_122" id="_SignificantAccountingPoliciesTextBlock-c0_cont_121"><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(y)
Earnings per share</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_123" id="_SignificantAccountingPoliciesTextBlock-c0_cont_122"><ix:continuation id="_EarningsPerSharePolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
computes earnings per share (&#8220;EPS&#8221;) in accordance with ASC 260, &#8220;Earnings per Share&#8221;. ASC 260 requires companies
to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the
period. Diluted EPS presents the dilutive effect on a per share basis of the potential common shares (e.g., convertible securities, options
and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares
that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation
of diluted EPS.&#160;Contingently issuable shares were not included in the computation of diluted shares outstanding if they were not
issuable should the end of the reporting period have been the end of the contingency period. For the years ended December 31, 2020, there
was&#160;<ix:nonFraction contextRef="c181" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">3,540,960</ix:nonFraction>&#160;contractual issuable shares related to SPAC and Beelive Earn-out Target 2020 achieved as of December 31, 2020,
which was fully issued for the year ended December 31, 2020. For the years ended December 31, 2021, there was&#160;<ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">3,540,960</ix:nonFraction>&#160;contractual
issuable shares related to SPAC and Beelive Earn-out Target 2021 achieved as of December 31, 2021, which was fully issued in the year
ended December 31, 2022. For the year ended December 31, 2022, there was <ix:nonFraction contextRef="c183" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">995,118</ix:nonFraction> contractual issuable shares related to Beelive Earn-out
and Weiliantong Earn-out Target 2022 achieved as of December 31, 2022, and <ix:nonFraction contextRef="c179" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">636,691</ix:nonFraction> contractual issuable shares related to Weiliantong
acquisition.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_124" id="_SignificantAccountingPoliciesTextBlock-c0_cont_123"><ix:nonNumeric contextRef="c0" continuedAt="sj_NoncontrollingInterestsPolicyTextBlock-c0_cont_1" escape="true" name="sj:NoncontrollingInterestsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(z)
Non-controlling interests</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_125" id="_SignificantAccountingPoliciesTextBlock-c0_cont_124"><ix:continuation id="sj_NoncontrollingInterestsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
31, 2022, non-controlling interests represent <ix:nonFraction contextRef="c184" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterestOwnershipPercentageByNoncontrollingOwners" scale="-2" unitRef="pure">49</ix:nonFraction>% non-controlling shareholders&#8217; interests in HCHY. The non-controlling interests
are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling
interests in the operating results of the Company are presented on the face of the consolidated statements of comprehensive income (loss)
as an allocation of the total income or loss between non-controlling interest holders and the shareholders of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_126" id="_SignificantAccountingPoliciesTextBlock-c0_cont_125"><ix:nonNumeric contextRef="c0" continuedAt="_SegmentReportingPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:SegmentReportingPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(aa)
Segment reporting</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_127" id="_SignificantAccountingPoliciesTextBlock-c0_cont_126"><ix:continuation id="_SegmentReportingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
follows ASC 280, &#8220;<i>Segment Reporting.&#8221;</i>&#160;The Company&#8217;s Chief Executive Officer or chief operating decision-maker
reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company
as a whole and hence, the Company has only one reportable segment. As the Company&#8217;s long-lived assets are substantially all located
in the PRC and substantially all the Company&#8217;s revenues are derived from within the PRC, no geographical segments are presented.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_128" id="_SignificantAccountingPoliciesTextBlock-c0_cont_127"><ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(bb)
Recent accounting pronouncements</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_129" id="_SignificantAccountingPoliciesTextBlock-c0_cont_128"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In February
2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset and a corresponding
lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating
leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating
section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization
of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will
be classified as a financing activity while the interest component will be included in the operating section of the statement of cash
flows. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective
approach to adoption. Early adoption is permitted. In September 2017, the FASB issued ASU No. 2017-13, which to clarify effective dates
that public business entities and other entities were required to adopt ASC Topic 842 for annual reporting. A public business entity that
otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial
statements or financial information in another entity&#8217;s filing with the SEC adopting ASC Topic 842 for annual reporting periods
beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. ASU
No. 2017-13 also amended that all components of a leveraged lease be recalculated from inception of the lease based on the revised after-tax
cash flows arising from the change in the tax law, including revised tax rates. The difference between the amounts originally recorded
and the recalculated amounts must be included in income of the year in which the tax law is enacted. In November 2019, the FASB issued
ASU No. 2019-10, by which to defer the effective date for all other entities by an additional year. As an emerging growth company, the
Company has not early adopted this update and it will become effective on January 1, 2021. In June 2020, the FASB issued ASU No. 2020-05,
&#8220;Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities&#8221; (&#8220;ASU
2020-05&#8221;) in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides
a limited deferral of the effective dates for implementing previously issued ASU 606 and ASU 842 to give some relief to businesses and
the difficulties they are facing during the pandemic. ASU 2020-05 affects entities in the &#8220;all other&#8221; category and public
Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the &#8220;all other&#8221;
category may defer to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December
15, 2022. The Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2022</span>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(bb)
Recent accounting pronouncements (continued)</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>&#160;</i></b></span></p><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_130" id="_SignificantAccountingPoliciesTextBlock-c0_cont_129"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2016, the FASB issued ASU No. 2016-13, &#8220;Financial Instruments
&#8212; Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,&#8221; which requires the Company to measure
and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018,
April 2019 and May 2019, the FASB issued ASU No. 2018-19, &#8220;Codification Improvements to Topic 326, Financial Instruments &#8212;
Credit Losses,&#8221; &#8220;ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments &#8212; Credit Losses,&#8221;
&#8220;Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,&#8221; and &#8220;ASU No. 2019-05, Financial Instruments
&#8212; Credit Losses (Topic 326): Targeted Transition Relief,&#8221; which provided additional implementation guidance on the previously
issued ASU. The ASU is effective for fiscal years beginning after Dec. 15, 2019 for public business entities that meet the definition
of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC. All other entities, ASU No. 2016-13 is effective for fiscal
years beginning after December 15, 2022. The adoption of this guidance will not have a material impact on the Company&#8217;s consolidated
financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_131" id="_SignificantAccountingPoliciesTextBlock-c0_cont_130"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_4" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In October
2018, the FASB issued ASU No. 2018-17 (&#8220;ASU 2018-17&#8221;), Consolidation (Topic 810): Targeted Improvements to Related Party Guidance
for Variable Interest Entities. The updated guidance requires entities to consider indirect interests held through related parties under
common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making
fee is a variable interest. The amendments in this update are effective for non-public business entities for fiscal years beginning after
December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted. These amendments
should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.
The adoption of this guidance did not have a material impact on the Company&#8217;s consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_132" id="_SignificantAccountingPoliciesTextBlock-c0_cont_131"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_5" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In December
2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, to simplify the accounting
for income taxes. The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology
for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also
simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions
that result in a step-up in the tax basis of goodwill. This ASU will become effective for the Company&#8217;s annual and interim periods
beginning in January 1, 2021, and early adoption is permitted. The adoption of this guidance did not have a material impact on the Company&#8217;s
consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_133" id="_SignificantAccountingPoliciesTextBlock-c0_cont_132"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_6" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In January
2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic
323), and Derivatives and Hedging (Topic 815) (&#8220;ASU 2020-01&#8221;), which is intended to clarify the interaction of the accounting
for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting
for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning
January 1, 2021. The adoption of this guidance did not have a material impact on the Company&#8217;s consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_134" id="_SignificantAccountingPoliciesTextBlock-c0_cont_133"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_7" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In August
2020, the FASB issued ASU 2020-06, Debt &#8211; Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging &#8211;
Contracts in Entity&#8217;s Own Equity (Subtopic 815-40) (&#8220;ASU 2020-06&#8221;). ASU 2020-06 simplifies the guidance for certain
financial instruments with characteristics of both debt and equity, including convertible instruments and contracts on an entity&#8217;s
own equity, by reducing the number of accounting models for convertible instruments. It also amends guidance in ASC Topic 260, Earnings
Per Share, relating to the computation of earnings per share for convertible instruments and contracts on an entity&#8217;s own equity.
ASU 2020-06 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2021, with early adoption
permitted for fiscal years that begin after December 15, 2020. The adoption of this guidance did not have a material impact on the Company&#8217;s
consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_135" id="_SignificantAccountingPoliciesTextBlock-c0_cont_134"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_8" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In October
2021, the FASB issued ASU No. 2021-08, &#8220;&#8216;Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities
from Contracts with Customers&#8221; (&#8220;ASU 2021-08&#8221;). This ASU requires entities to apply Topic 606 to recognize and measure
contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination
by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and
revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after
December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company does not expect
the adoption of ASU 2021-04 will have a material effect on the consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_135"><ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Except for
the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated
financial position, statements of operations and cash flows.</span></p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:ConcentrationRiskDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>3.
<span style="text-transform: uppercase">CONCENTRATION OF RISK</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_2" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(a)
Credit risk</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_3" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash
equivalents, accounts receivable, other receivables included in prepaid expenses, other current assets, and amounts due from related
parties. As of December 31, 2021 and 2022, RMB<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ConcentrationRiskCreditRiskFinancialInstrumentMaximumExposure" scale="3" unitRef="cny">238,792</ix:nonFraction>&#160;and RMB<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ConcentrationRiskCreditRiskFinancialInstrumentMaximumExposure" scale="3" unitRef="cny">172,514</ix:nonFraction> (US$<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ConcentrationRiskCreditRiskFinancialInstrumentMaximumExposure" scale="3" unitRef="usd">25,012</ix:nonFraction>), respectively, were deposited with major
financial institutions located in the PRC. There is a RMB <ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TimeDepositsAtOrAboveFDICInsuranceLimit" scale="0" unitRef="cny">500,000</ix:nonFraction> deposit insurance limit for a legal entity&#8217;s aggregated
balance at each mainland PRC bank, and the bank deposits with financial institutions in the Hong Kong Special Administrative Region
are insured by the government authority up to HKD <ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepositsWithOtherFederalHomeLoanBanks" scale="0" unitRef="hkd">500,000</ix:nonFraction>. Management believes that these financial institutions are of high credit
quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are
secure due to the state policy on protecting depositors&#8217; interests.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_4" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>For the
credit risk related to accounts receivable, the Company performs ongoing credit evaluations of its customers. The Company establishes
an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific customers and other information.
The allowance amounts were immaterial for all periods presented.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_5" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(b)
Currency convertibility risk</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_6" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Substantially
all of the Company&#8217;s businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994,
the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People&#8217;s Bank
of China. However, the unification of the exchange rates does not imply the convertibility of RMB (</span>&#165;<span>)
into US$ ($) or other foreign currencies. All foreign exchange transactions continue to take place either through the People&#8217;s Bank
of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People&#8217;s Bank of China.
Approval of foreign currency payments by the People&#8217;s Bank of China or other institutions requires submitting a payment application
form together with suppliers&#8217; invoices, shipping documents and signed contracts.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_7" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(c)
Significant customers</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_8" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>For the
years ended December 31, 2020 and 2021, no customer individually represents greater than <ix:nonNumeric contextRef="c0" name="us-gaap:ConcentrationRiskCustomer"><ix:nonNumeric contextRef="c9" name="us-gaap:ConcentrationRiskCustomer"><ix:nonNumeric contextRef="c8" name="us-gaap:ConcentrationRiskCustomer">10%</ix:nonNumeric></ix:nonNumeric></ix:nonNumeric> of the total revenue. For the year ended
December 31, 2022, <ix:nonFraction contextRef="c292" decimals="0" format="ixt-sec:numwordsen" name="sj:NumberOfCustomers" scale="0" unitRef="pure">one</ix:nonFraction> customer accounted for <ix:nonNumeric contextRef="c292" name="us-gaap:ConcentrationRiskCustomer">11.2%</ix:nonNumeric> of the Company&#8217;s total revenue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_9" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(d)
Significant suppliers</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation id="_ConcentrationRiskDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>For the
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and&#160;<ix:nonFraction contextRef="c297" decimals="3" format="ixt:num-dot-decimal" name="sj:ConcentrationRiskPercentage" scale="-2" unitRef="pure">10.0</ix:nonFraction>% of the Company&#8217;s accounts payable as of December 31, 2020. For the year ended December 31, 2021, <ix:nonFraction contextRef="c298" decimals="0" format="ixt-sec:numwordsen" name="sj:NumberOfVendors" scale="0" unitRef="pure">one</ix:nonFraction> vendor accounted
for&#160;<ix:nonFraction contextRef="c299" decimals="3" format="ixt:num-dot-decimal" name="sj:ConcentrationRiskPercentage" scale="-2" unitRef="pure">19.6</ix:nonFraction>% of the Company&#8217;s total purchases and <ix:nonFraction contextRef="c300" decimals="0" format="ixt-sec:numwordsen" name="sj:NumberOfVendors" scale="0" unitRef="pure">one</ix:nonFraction> vendor accounted for&#160;<ix:nonFraction contextRef="c301" decimals="3" format="ixt:num-dot-decimal" name="sj:ConcentrationRiskPercentage" scale="-2" unitRef="pure">10.9</ix:nonFraction>% of the Company&#8217;s accounts payable
as of December 31, 2021. For the year ended December 31, 2022, no vendor accounted for greater than <ix:nonFraction contextRef="c302" decimals="2" format="ixt:num-dot-decimal" name="sj:ConcentrationRiskPercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% of the Company&#8217;s total purchases
and no vendor accounted for greater than <ix:nonFraction contextRef="c303" decimals="2" format="ixt:num-dot-decimal" name="sj:ConcentrationRiskPercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% of the Company&#8217;s accounts payable as of December 31, 2022.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:BusinessCombinationDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>4.
ACQUISITION</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_2" id="_BusinessCombinationDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>4.1 Acquisition
of Weiliantong</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_3" id="_BusinessCombinationDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On December
29, 2021, the Company entered into an Equity Acquisition Framework Agreement (the &#8220;Framework Agreement&#8221;) with Golden Shield
Enterprises Limited (&#8220;Golden Shield&#8221;), Beijing Weiliantong Technology Co., Ltd. (&#8220;Weiliantong&#8221;), Tianjin&#160;Yieryi&#160;Technology
Co., Ltd. (&#8220;Yieryi&#8221;), Wolter Global Investment Limited (&#8220;Wolter Global&#8221;) and Qingdao Weilaijin Industry Investment
Fund Partnership (Limited Partnership) (&#8220;Weilaijin&#8221;), which is one of the shareholders of&#160;Yieryi. Pursuant to the Framework
Agreement, the Company, or its affiliates designated by the Company, acquires all of the outstanding equity interests of (i) Weiliantong
from&#160;its shareholder Yieryi&#160;and (ii) Golden Shield from Wolter Global (the &#8220;Acquisitions&#8221;).&#160;Yieryi&#160;and
Wolter Global are under common control.&#160;&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_4" id="_BusinessCombinationDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Pursuant
to the Framework Agreement, the Acquisition requires both cash and share considerations (the &#8220;Considerations&#8221;).&#160;The Company
is required to pay RMB<ix:nonFraction contextRef="c304" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DividendsSharebasedCompensationStock" scale="3" unitRef="cny">180,000</ix:nonFraction> in its Class A ordinary shares, consisting of <ix:nonNumeric contextRef="c305" name="sj:BusinessCombinationOfDescription">(1) the shares consideration of RMB20,800 to Weilaijin (the
&#8220;Weilaijin Share Consideration&#8221;), a shareholder of Yieryi, and (ii) the shares consideration of RMB159,200&#160;in its Class
A ordinary shares to Wolter Global (the &#8220;Wolter Global Share Consideration&#8221;), including 20% of the Wolter Global Share Consideration
are subject to certain performance conditions (i.e., earn-out provisions) and requirements over the following two years (earn-out arrangement).</ix:nonNumeric>
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at RMB<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ContingentConsiderationClassifiedAsEquityFairValueDisclosure" scale="3" unitRef="cny">181,958</ix:nonFraction>, based on a valuation performed by an independent valuation firm engaged by the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_5" id="_BusinessCombinationDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In addition,
the Company is required to repay Weilianton&#8217;s loan payable in aggregated of RMB<ix:nonFraction contextRef="c307" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLoansPayableLongTerm" scale="3" unitRef="cny">86,200</ix:nonFraction>&#160;on behalf of Weilianton, consisting of
RMB<ix:nonFraction contextRef="c306" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLoansPayableLongTerm" scale="3" unitRef="cny">77,400</ix:nonFraction>&#160;loans payable to Yieryi and RMB<ix:nonFraction contextRef="c308" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLoansPayableLongTerm" scale="3" unitRef="cny">8,800</ix:nonFraction>&#160;loan payable to a third party.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_6" id="_BusinessCombinationDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The objective
of the Acquisition is to support the Company&#8217;s strategic growth initiative of acquiring the top-tier online live streaming platform
Hongle.tv and expanding the NFT business scope. The Acquisition was closed on January 1, 2022.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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was accounted for as business combination in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not
material. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition
date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent
valuation firm engaged by the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_8" id="_BusinessCombinationDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c313" continuedAt="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c313_cont_1" escape="true" name="us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 185; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>4.
ACQUISITION (CONTINUED)</b></span> </p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>4.1 Acquisition
of Weiliantong (continued)</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_9" id="_BusinessCombinationDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The intangible
assets are mainly attributable to Trademark and license as well as software acquired through the acquisition, which are generally amortized
over&#160;<ix:nonNumeric contextRef="c309" format="ixt-sec:duryear" name="us-gaap:AcquiredFiniteLivedIntangibleAssetsWeightedAverageUsefulLife">5</ix:nonNumeric>-<ix:nonNumeric contextRef="c310" format="ixt-sec:duryear" name="us-gaap:AcquiredFiniteLivedIntangibleAssetsWeightedAverageUsefulLife">10</ix:nonNumeric>&#160;years, except that the license acquired for Weiliantong platform is determined to have an infinite useful life and
is not subject to amortization.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_10" id="_BusinessCombinationDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Weiliantong
began its business since 2015. The following table summarizes unaudited pro forma results of operations for the year ended December 31,
2021, assuming that acquisition of Weiliantong occurred as of January 1, 2021. The pro forma results have been prepared for comparative
purpose only based on management&#8217;s best estimate and do not purport to be indicative of the results of operations which actually
would have resulted had the acquisitions occurred as of the beginning of period:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_11" id="_BusinessCombinationDisclosureTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" escape="true" name="srt:ScheduleOfCondensedIncomeStatementTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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December 31,<br/> 2021</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="white-space: nowrap; padding-bottom: 1.5pt">&#160;</td>
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Year ended <br/>
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_12" id="_BusinessCombinationDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>4.2 Acquisition
of Chuangda Huizhi</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>

</div><div>

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and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. (&#8220;HYDC&#8221;) from its original shareholders for a
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December 31, 2021 were not significant to the Company.&#160;The Company believes the CDZH acquisition will help to enrich the Company&#8217;s
product line, expand its user base and capitalize on the growth potential in the live streaming market. The CDZH acquisition was accounted
for as business combination in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not material. The
following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents
the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged
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</div><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation id="_BusinessCombinationDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The intangible
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 186; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_1" escape="true" name="us-gaap:AccountsAndNontradeReceivableTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>5.
ACCOUNTS RECEIVABLE, NET</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_2" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Accounts
receivable and allowance for doubtful accounts consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_3" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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</div><div>

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</div><div>

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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation id="_AccountsAndNontradeReceivableTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Two unrelated
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31, 2022, respectively.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>


</div><!-- Field: Page; Sequence: 187; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_1" escape="true" name="us-gaap:AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt; text-transform: uppercase"><b>6.
PREPAID EXPENSES AND OTHER CURRENT ASSETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>
</div><div>

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expenses and other current assets consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_3" id="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Prepayment for property and equipment (1)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_4" id="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_3"><ix:continuation continuedAt="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_2" id="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><ix:footnote id="ix_4_footnote" xml:lang="en-US">The Company subsequently terminated the related purchases after
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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_5" id="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_4"><ix:continuation continuedAt="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_3" id="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_6" id="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_5"><ix:continuation continuedAt="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_4" id="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_7" id="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_6"><ix:continuation id="_DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation id="_AccountsPayableAccruedLiabilitiesAndOtherLiabilitiesDisclosureCurrentTextBlock-c0_cont_7"><p style="text-align: justify; margin-left: 0.25in; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">On April 11, 2022, the Company lent RMB<ix:nonFraction contextRef="c331" decimals="0" format="ixt:num-dot-decimal" name="sj:WorkingCapital" scale="0" unitRef="cny">7,000</ix:nonFraction> to Jiada Hexin (Beijing) Technology Co., Ltd for working capital purpose. The loan was from April 11, 2022 to December 31, 2023 with annual interest rate of <ix:nonFraction contextRef="c332" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityInterestRateDuringPeriod" scale="-2" unitRef="pure">2.4</ix:nonFraction>% from April 11, 2022 to December 31, 2022 and annual interest rate of <ix:nonFraction contextRef="c333" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityInterestRateDuringPeriod" scale="-2" unitRef="pure">6.0</ix:nonFraction>% from January 1, 2023 to December 31, 2023.</p></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>&#160;</span>&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c9_cont_3" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c9_cont_2"><ix:nonNumeric contextRef="c9" escape="true" name="us-gaap:PropertyPlantAndEquipmentTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

</div><!-- Field: Page; Sequence: 188; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt; text-transform: uppercase"><b>8.
INTANGIBLE ASSETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_2" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Intangible
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</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_3" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_4" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>For the
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</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_5" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The estimated
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</div><div>

</div><ix:continuation id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>


</div><!-- Field: Page; Sequence: 189; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_InvestmentTextBlock-c0_cont_1" escape="true" name="us-gaap:InvestmentTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt; text-transform: uppercase"><b>9.
LONG TERM INVESTMENT</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_InvestmentTextBlock-c0_cont_2" id="_InvestmentTextBlock-c0_cont_1"><ix:nonNumeric contextRef="c0" continuedAt="_InvestmentTableTextBlock-c0_cont_1" escape="true" name="us-gaap:InvestmentTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><ix:continuation continuedAt="_InvestmentTextBlock-c0_cont_3" id="_InvestmentTextBlock-c0_cont_2"><ix:continuation continuedAt="_InvestmentTableTextBlock-c0_cont_2" id="_InvestmentTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_InvestmentTextBlock-c0_cont_5" id="_InvestmentTextBlock-c0_cont_4"><ix:continuation continuedAt="_InvestmentTableTextBlock-c0_cont_4" id="_InvestmentTableTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Investments of RMB<ix:nonFraction contextRef="c348" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherInvestments" scale="3" unitRef="cny">5,000</ix:nonFraction>&#160;represented of&#160;<ix:nonFraction contextRef="c348" decimals="4" format="ixt:num-dot-decimal" name="sj:EquityInvestmentPercentage" scale="-2" unitRef="pure">1.76</ix:nonFraction>%
equity investment in the privately-held entity (&#8220;Zhejiang Qusu Technology Co., Ltd&#8221; or &#8220;QS&#8221;), in which the Company
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</div><div>

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equity interest in Qingdao Weilai JingChanye Investment Fund LP (&#8220;QD&#8221;), in which the Company does not have significant influence
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</div><div>

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equity interest in Jiada Hexin (Beijing) Technology Co., Ltd. (&#8220;Jiada&#8221;), in which the Company does not have significant influence
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</div><div>

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equity interest in Liujiaoshou Drink Co., Ltd., in which the Company does not have significant influence and such investment do not have
readily determinable fair values.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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equity interest in Beijing Dunengmaihuo Culture Media Co., Ltd., in which the Company does not have significant influence and such investment
do not have readily determinable fair values.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_InvestmentTextBlock-c0_cont_10" id="_InvestmentTextBlock-c0_cont_9"><ix:continuation continuedAt="_InvestmentTableTextBlock-c0_cont_9" id="_InvestmentTableTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On May 6, 2022, the Company signed an investment
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the Company does not have significant influence and such investment do not have readily determinable fair values. For the year ended December
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</div><div>

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</div><div>

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</div><div>

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broadcaster, IT, Big Data, Artificial Intelligence and logistic industry. &#160;The Qingdao LLP is managed by two unrelated general partners
(GPs). The Company, as a Limited partner, neither participate in the daily operation of Qingdao LP, nor has the exclusive rights to control
the partnership meeting and investment decisions. As a result, the Company considers it has significant influence on this investment
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</div><div>

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there was no material market environment change or any other factor that indicating the fair value of the above investments was less than
its carrying value, hence, the Company concluded there is no impairment of the above investments.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_LongTermDebtTextBlock-c0_cont_1" escape="true" name="us-gaap:LongTermDebtTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt; text-transform: uppercase"><b>10.
LONG TERM DEPOSITS AND OTHER ASSETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_2" id="_LongTermDebtTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Long term
deposits and other assets consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LongTermDebtTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfOtherAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;<span>&#160;</span></p><div>

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RIGHT OF USE ASSETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_2" id="sj_RightOfUseAssetsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
has several operating leases for offices. The Company&#8217;s lease agreements do not contain any material residual value guarantees or
material restrictive covenants.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_3" id="sj_RightOfUseAssetsTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Effective
January 1, 2022, the Company adopted the new lease accounting standard using a modified retrospective transition method which allowed
the Company not to recast comparative periods presented in its consolidated financial statements. In addition, the Company elected the
package of practical expedients, which allowed the Company to not reassess whether any existing contracts contain a lease, to not reassess
historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected
the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company combines the lease and
non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of
operating lease ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as
of January 1, 2022. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining
lease payments over the lease term.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_4" id="sj_RightOfUseAssetsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Total lease
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</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_5" id="sj_RightOfUseAssetsTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Supplemental
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</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_6" id="sj_RightOfUseAssetsTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:OperatingLeaseLeaseIncomeTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_7" id="sj_RightOfUseAssetsTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The weighted
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</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_8" id="sj_RightOfUseAssetsTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfWeightedAverageNumberOfSharesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
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    <td style="width: 1%">&#160;</td>
    <td style="width: 10%">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="sj_RightOfUseAssetsTextBlock-c0_cont_9" id="sj_RightOfUseAssetsTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The following
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</div><div>

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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 191; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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Bank Loan</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation id="_FederalHomeLoanBankAdvancesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On August 12, 2022, <ix:nonNumeric contextRef="c375" name="us-gaap:CapitalLeasesIndemnificationAgreementsDescription">the
Company entered into a loan agreement with Bank of Hangzhou to obtain a loan of RMB5,000 (US$725) for a term of one year and at a fixed
rate of 4.5% per annum. The loan was guaranteed by WXZJ.</ix:nonNumeric></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>13.
INCOME TAXES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><i>Enterprise
income tax</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_3" id="_IncomeTaxDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>British
Virgin Islands</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_4" id="_IncomeTaxDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Under the
current laws of the British Virgin Islands, the Company incorporated in the British Virgin Islands is not subject to tax on income or
capital gain. Additionally, the British Virgin Islands does not impose a withholding tax on payments of dividends to shareholders.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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Islands</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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current laws of the Cayman Islands, the subsidiary of the Company incorporated in the Cayman Islands is not subject to tax on income or
capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_7" id="_IncomeTaxDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Hong
Kong</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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its&#160;taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiary incorporated in
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_9" id="_IncomeTaxDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>The PRC</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_10" id="_IncomeTaxDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company&#8217;s
subsidiaries and the VIE that are each incorporated in the PRC are subject to Corporate Income Tax (&#8220;CIT&#8221;) on the taxable
income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws
(&#8220;PRC Income Tax Laws&#8221;) effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company&#8217;s PRC subsidiaries
and the VIE are subject to a CIT statutory rate of&#160;<ix:nonFraction contextRef="c377" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">25</ix:nonFraction>%.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_11" id="_IncomeTaxDisclosureTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" continuedAt="sj_IncomeTaxLawDescription-c0_cont_1" name="sj:IncomeTaxLawDescription"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Under the
PRC Income Tax Laws, an enterprise which qualifies as a High and New Technology Enterprise (&#8220;the HNTE&#8221;) is entitled to a preferential
tax rate of 15% provided it continues to meet HNTE qualification standards on an annual basis. SG qualifies as an HNTE and is entitled
for a preferential tax rate of 15% from 2018 to 2024. HX qualifies as an HNTE and is entitled for a preferential tax rate of 15% from
2017 to 2023. LH qualifies as an HNTE and is entitled for a preferential tax rate of 15% from 2016 to 2024. WLT qualifies as an HNTE and
is entitled for a preferential tax rate of 15% from 2017 to 2023. CX qualifies as an HNTE and is entitled for a preferential tax rate
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_12" id="_IncomeTaxDisclosureTextBlock-c0_cont_11"><ix:continuation continuedAt="sj_IncomeTaxLawDescription-c0_cont_2" id="sj_IncomeTaxLawDescription-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Under the
PRC Income Tax Laws, during the period from January 1, 2010 to December 31, 2030, an enterprise which established in region of Holgus
and Kashgar is entitled to a preferential tax rate of 0% in five consecutive years and a preferential tax rate of 9% for the next five
years since the first-year income generated from operations provided it continues to meet the conditions within the required scope.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_13" id="_IncomeTaxDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><ix:continuation id="sj_IncomeTaxLawDescription-c0_cont_2">Holgus X
qualifies for the conditions and entitled for a preferential tax rate of 0% from 2017 to 2021 and a preferential tax rate of 9% from 2022
to 2026. Kashgar Times qualifies for the conditions and entitled for a preferential tax rate of 0% from 2016 to 2020 and a preferential
tax rate of 9% from 2021 to 2025. Holgus H qualifies for the conditions and entitled for a preferential tax rate of 0% from 2020 to 2025
and a preferential tax rate of 9% from 2026 to 2030. Kashgar Lehong qualifies for the conditions and entitled for a preferential tax rate
of 0% from 2020 to 2025 and a preferential tax rate of 9% from 2026 to 2030.</ix:continuation>&#160;For the years ended December 31, 2020, 2021 and 2022,
total tax saving for the preferential tax rate were RMB<ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">39,876</ix:nonFraction>, RMB<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">34,561</ix:nonFraction>&#160;and RMB<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">33,892</ix:nonFraction> (US$<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="usd">4,914</ix:nonFraction>), respectively, the impacts on basic
EPS were RMB<ix:nonFraction contextRef="c378" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">1.7</ix:nonFraction>, RMB<ix:nonFraction contextRef="c379" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">1.1</ix:nonFraction>&#160;and RMB<ix:nonFraction contextRef="c380" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">0.7</ix:nonFraction>&#160;(US$<ix:nonFraction contextRef="c380" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="usd">0.1</ix:nonFraction>), respectively, and the impacts on dilutive EPS were RMB<ix:nonFraction contextRef="c381" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">1.5</ix:nonFraction>, RMB<ix:nonFraction contextRef="c382" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">1.1</ix:nonFraction>&#160;and RMB<ix:nonFraction contextRef="c383" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="cny">0.7</ix:nonFraction>&#160;(US$<ix:nonFraction contextRef="c383" decimals="-2" format="ixt:num-dot-decimal" name="sj:PreferentialTaxRate" scale="3" unitRef="usd">0.1</ix:nonFraction>),
respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; "></p><div>

</div><!-- Field: Page; Sequence: 192; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>13.
INCOME TAXES (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_14" id="_IncomeTaxDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><i>Uncertain
tax positions</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_15" id="_IncomeTaxDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based
on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2021 and 2022, the
Company did not have any significant unrecognized uncertain tax positions.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_16" id="_IncomeTaxDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
did not incur any interest or penalty related to potential underpaid income tax expenses for the years ended December 31, 2020, 2021and
2022, and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December
31, 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The income
tax expenses comprise:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c8" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CurrentIncomeTaxExpenseBenefit" scale="3" unitRef="cny">5,459</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

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is as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_21" id="_IncomeTaxDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The components
of deferred taxes are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_22" id="_IncomeTaxDisclosureTextBlock-c0_cont_21"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_23" id="_IncomeTaxDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Based upon
the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are
recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable
income to realize the deferred tax assets for the Company. Thus, there were no valuation allowances as of December 31, 2020, 2021 and
2022 for the deferred tax assets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_24" id="_IncomeTaxDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The components
of deferred liabilities are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_IncomeTaxDisclosureTextBlock-c0_cont_24"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:SummaryOfDeferredTaxLiabilityNotRecognizedTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; "></p><div>

</div><!-- Field: Page; Sequence: 193; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>15.
SHAREHOLDERS&#8217; EQUITY</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><i>Ordinary
Shares</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
is authorized to issue an unlimited number of no par value Class A ordinary shares and&#160;Class B ordinary shares. As of December 31,
2019, there was&#160;<ix:nonFraction contextRef="c405" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares"><ix:nonFraction contextRef="c405" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">2,461,983</ix:nonFraction></ix:nonFraction>&#160;Class A ordinary shares remain issued and outstanding. After redemption of&#160;<ix:nonFraction contextRef="c406" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockRedeemedOrCalledDuringPeriodShares" scale="0" unitRef="shares">212,633</ix:nonFraction>&#160;Class
A ordinary shares prior to the SPAC transaction on May 7, 2020, the number of outstanding Class A ordinary shares became&#160;<ix:nonFraction contextRef="c407" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">2,249,350</ix:nonFraction>.
In connection with the SPAC Transaction, the Company issued approximately&#160;<ix:nonFraction contextRef="c408" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="6" unitRef="shares">19.4</ix:nonFraction>&#160;million Class A ordinary shares including&#160;<ix:nonFraction contextRef="c408" decimals="-6" format="ixt:num-dot-decimal" name="sj:EarnoutConsiderationShares" scale="6" unitRef="shares">3</ix:nonFraction>&#160;million
shares&#160;as part of earn-out consideration that was issued to the previous owners of Scienjoy Inc.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>At the closing
of the SPAC Transaction, a convertible promissory note of RMB<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ConvertibleNotesPayableCurrent" scale="3" unitRef="cny">4,038</ix:nonFraction>&#160;(US$<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ConvertibleNotesPayableCurrent" scale="3" unitRef="usd">619</ix:nonFraction>) with the related rights previously issued to the shareholder&#8217;s
of Scienjoy, Inc. was automatically converted into&#160;<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesConversionOfUnits" scale="0" unitRef="shares">63,250</ix:nonFraction>&#160;Class A ordinary shares.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>At the closing
of the SPAC Transaction, the Company issued&#160;<ix:nonFraction contextRef="c409" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">402,983</ix:nonFraction>&#160;Class A ordinary shares to settle deferred underwriting commission of RMB<ix:nonFraction contextRef="c410" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:UnderwritingIncomeLoss" scale="3" unitRef="cny">14,131</ix:nonFraction>&#160;(US$&#160;<ix:nonFraction contextRef="c410" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:UnderwritingIncomeLoss" scale="0" unitRef="usd">2,166</ix:nonFraction>)&#160;in
connection of the Company&#8217;s initial public offering on February 8, 2019. The effective conversion price was US$&#160;<ix:nonFraction contextRef="c0" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:CommonStockConvertibleConversionPriceIncrease" scale="0" unitRef="usdPershares">5.0</ix:nonFraction>&#160;per
Class A ordinary shares based on the volume weighted average price of the Company&#8217;s Class A ordinary shares prior to the SPAC Transaction,
as a result, the fair value of Class A ordinary shares issued approximated the carrying value of deferred underwriting commission payable
settled.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Prior to
the SPAC Transaction, the Company issued certain Public Rights and Private Rights in connection with its previous initial public offering
and private placement. All these outstanding public rights and private rights were converted into&#160;<ix:nonFraction contextRef="c411" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesConversionOfUnits" scale="0" unitRef="shares">602,000</ix:nonFraction>&#160;Class A ordinary shares
upon the completion of the SPAC Transaction.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:nonNumeric contextRef="c0" name="sj:DescriptionOfSPACTransaction"><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Prior to
the closing of the SPAC Transaction, the Company issued 533,000 Class A ordinary shares to the financial advisors and underwriter with
fair value of RMB18,713 (US$ 2,868) based on share price of U$5.0 per ordinary share at the time of the transaction.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In connection
of the acquisition of BeeLive, the Company issued&#160;<ix:nonFraction contextRef="c412" decimals="0" format="ixt:num-dot-decimal" name="sj:CommonStockShareIssued" scale="0" unitRef="shares">3,786,719</ix:nonFraction>&#160;Class A ordinary shares to the original shareholders of BeeLive
as&#160;<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="sj:OriginalShareholdersPercentage" scale="-2" unitRef="pure">70</ix:nonFraction>% of total RMB<ix:nonFraction contextRef="c413" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:Cash" scale="6" unitRef="cny">250</ix:nonFraction>&#160;million (or equivalent to RMB<ix:nonFraction contextRef="c412" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:Cash" scale="6" unitRef="cny">175</ix:nonFraction>&#160;million) worth share consideration (Note 4), which was calculated
based on US$&#160;<ix:nonFraction contextRef="c414" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionSharePrice" scale="0" unitRef="usdPershares">6.68</ix:nonFraction>&#160;per share based on the&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:durday" name="sj:AverageClosingPriceTerm">15</ix:nonNumeric>&#160;days average closing price of the Company&#8217;s Class A ordinary shares
prior to the acquisition. The fair value of the shares issued approximated RMB<ix:nonFraction contextRef="c412" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityFairValueOfAmountOutstanding" scale="6" unitRef="cny">175</ix:nonFraction>&#160;million (US$&#160;<ix:nonFraction contextRef="c412" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityFairValueOfAmountOutstanding" scale="6" unitRef="usd">26.8</ix:nonFraction>&#160;million) as part of
the purchase consideration.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>For the
year ended December 31, 2021 the Company issued&#160;<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">108,230</ix:nonFraction>&#160;Class A ordinary shares to White Lion Capital LLC. The gross proceeds
were RMB<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="sj:GrossProceedsAmount" scale="0" unitRef="cny">664,670</ix:nonFraction>.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On November
8, 2021, the Company&#8217;s 2021 annual general meeting of shareholders (the &#8220;AGM&#8221;) approved the following shareholders&#8217;
resolutions:&#160;<ix:nonNumeric contextRef="c0" name="sj:AnnualGeneralMeetingOfShareholdersDescription">(i) the adoption of a dual-class share structure, pursuant to which the Company&#8217;s authorized share capital shall
be re-classified and re-designed into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled
to one (1) vote and each Class B ordinary share being entitled to ten (10) votes at a meeting of the shareholders or on any resolution
of shareholders; and (ii) the authorization to the Company to issue up to 50,000,000 Class A Preferred Shares with such designations,
powers, preferences and relative, participation, optional and other rights, if any, and such qualifications, limitations and restrictions
as the directors may determine among other matters. Additionally, together with the adoption of a dual-class share structure, 2,625,058
Class A ordinary shares held by Heshine Holdings Limited have been converted into 2,625,058 Class B ordinary shares.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In connection
of the acquisition of Weiliantong, the Company issued&#160;<ix:nonFraction contextRef="c415" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">3,898,511</ix:nonFraction>&#160;Class A ordinary shares to the original shareholders of Weiliantong
as part of total RMB<ix:nonFraction contextRef="c416" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Cash" scale="0" unitRef="cny">180,000</ix:nonFraction>(or equivalent to RMB<ix:nonFraction contextRef="c5" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:Cash" scale="6" unitRef="cny">127</ix:nonFraction> million) worth share worth share consideration (Note 4), which was calculated based
on US$<ix:nonFraction contextRef="c417" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionSharePrice" scale="0" unitRef="usdPershares">5.13</ix:nonFraction>&#160;per share based on the&#160;<ix:nonNumeric contextRef="c418" format="ixt-sec:durday" name="sj:AverageClosingPriceTerm">20</ix:nonNumeric>&#160;days average closing price of the Company&#8217;s Class A ordinary shares prior to
the acquisition. The fair value of the shares issued approximated RMB<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityFairValueOfAmountOutstanding" scale="0" unitRef="cny">127,000</ix:nonFraction>&#160;(US$&#160;<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityFairValueOfAmountOutstanding" scale="0" unitRef="usd">18,000</ix:nonFraction>) as part of the purchase consideration.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
31, 2022, the Company had&#160;<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">36,684,668</ix:nonFraction></ix:nonFraction>&#160;Class A ordinary shares and&#160;<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">2,925,058</ix:nonFraction></ix:nonFraction>&#160;Class B ordinary shares issued and outstanding.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>15.
SHAREHOLDERS&#8217; EQUITY (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><i>Treasury
Stock</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In October,
2022, the Company repurchased an aggregate of <ix:nonFraction contextRef="c419" decimals="0" format="ixt:num-dot-decimal" name="sj:AggregateCommonShares" scale="0" unitRef="shares">794,120</ix:nonFraction> Class A ordinary shares at price of $<ix:nonFraction contextRef="c420" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:TreasuryStockAcquiredAverageCostPerShare" scale="0" unitRef="usdPershares">3.01</ix:nonFraction> per share, which was recorded as treasury
stock. As of December 31, 2022, all these shares were held in an escrow account as reserve solely for potential needed.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><i>Warrants</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
31, 2021, there were&#160;<ix:nonFraction contextRef="c254" decimals="0" format="ixt:num-dot-decimal" name="sj:WarrantsOutstandingAndExercisable" scale="0" unitRef="usd">6,023,700</ix:nonFraction>&#160;warrants outstanding and exercisable, consisting of <ix:nonFraction contextRef="c421" decimals="0" format="ixt:num-dot-decimal" name="sj:PublicWarrantsShares" scale="0" unitRef="shares">5,653,700</ix:nonFraction>&#160;public warrants issued in
connection with the Company&#8217;s initial public offering and&#160;<ix:nonFraction contextRef="c422" decimals="0" format="ixt:num-dot-decimal" name="sj:PrivateWarrantsShares" scale="0" unitRef="shares">370,000</ix:nonFraction>&#160;private warrants issued for a private placement simultaneously
with the closing of the initial public offering. Two warrants are exercisable for one Class A ordinary shares. All these warrants were
issued and outstanding before the SPAC Transaction and&#160;no&#160;warrants have been exercised for the year ended December 31, 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:nonNumeric contextRef="c251" name="us-gaap:ClassOfWarrantOrRightReasonForIssuingToNonemployees"><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Public
Warrants became exercisable upon the completion of the SPAC Transaction on May 7, 2020 with exercise price of US$11.5 per full share.
The Public Warrants will expire five years from February 5, 2019 (or February 5, 2024).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
may call the warrants for redemption (excluding the Private Warrants), in whole and not in part, at a price of $<ix:nonFraction contextRef="c255" decimals="2" format="ixt:num-dot-decimal" name="sj:WarrantsPerSharePrice" scale="0" unitRef="usdPershares">0.01</ix:nonFraction>&#160;per warrant:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">at any time while the Public
Warrants are exercisable,</span></td>
</tr></table><p style="margin: 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">upon not less than 30 days&#8217;
prior written notice of redemption to each Public Warrant holder,</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">if, and only if, the reported
last sale price of the Class A ordinary shares equals or exceeds $<ix:nonFraction contextRef="c423" decimals="2" format="ixt:num-dot-decimal" name="sj:OrdinaryPerSharePrice" scale="0" unitRef="usdPershares">16.50</ix:nonFraction>&#160;per share, for any 20 trading days within a 30-trading day
period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and</span></td>
</tr></table><p style="margin: 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">if, and only if, there is a
current registration statement in effect with respect to the issuance of the Class A ordinary shares underlying such warrants at the
time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>If the Company
calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants
to do so on a &#8220;cashless basis&#8221;. The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants
may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization,
merger or consolidation. The Public Warrants may only be exercised for a whole number of shares, meaning that the Public Warrants must
be exercised in multiples of two. However, the warrants will not be adjusted for issuances of Class A ordinary shares at a price below
its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The private
warrants are identical to the public warrants with the exercise price of US$&#160;<ix:nonFraction contextRef="c255" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares">11.5</ix:nonFraction>&#160;per full share and expiration by&#160;<ix:nonNumeric contextRef="c255" format="ixt:date-monthname-day-year-en" name="us-gaap:WarrantsAndRightsOutstandingMaturityDate">February
4, 2024</ix:nonNumeric>, except that the private warrants and the Class A ordinary shares issuable upon the exercise of the private warrants will not
be transferable, assignable or salable until after the completion of the SPAC Transaction, subject to certain limited exceptions. The
private warrants may only be exercised for a whole number of shares, meaning that the private warrants must be exercised in multiples
of two. Additionally, the private warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held
by the initial purchasers or their permitted transferees. If the private warrants are held by someone other than the initial purchasers
or their permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis
as the public warrants.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 196; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->43<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>15.
SHAREHOLDERS&#8217; EQUITY (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>A summary
of warrants activity for the year ended December&#160;31, 2020, 2021 and 2022 is as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> average life</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration<br/> dates</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 9%; text-align: center">-</td><td style="width: 1%">&#160;</td>
    <td style="width: 15%; text-align: center">-</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: center; padding-bottom: 1.5pt">-</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">-</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-indent: -0.125in; padding-left: 0.125in; text-align: left">Additional warrants upon exercise of UPO</td><td>&#160;</td>
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    <td style="text-align: center">-</td><td>&#160;</td>
    <td style="text-align: center">-</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 1.5pt; vertical-align: top">Exercised</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: center; padding-bottom: 1.5pt">-</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">-</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: center; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c9" format="ixt:date-monthname-day-year-en" name="sj:ShareBasedCompensationArrangementByShareBasedPaymentsAwardExpirationDates">February 4, 2024</ix:nonNumeric></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt; vertical-align: top">Balance of warrants outstanding as of December&#160;31, 2022</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c5" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber" scale="0" unitRef="shares">6,023,700</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 4pt"><ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="sj:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm3">1.1</ix:nonNumeric>&#160;years</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 4pt"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="sj:ShareBasedCompensationArrangementByShareBasedPaymentsAwardExpirationDates">February 4, 2024</ix:nonNumeric></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt; vertical-align: top">Balance of warrants exercisable as of December&#160;31, 2022</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c5" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">6,023,700</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 4pt"><ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1">1.1</ix:nonNumeric>&#160;years</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 4pt"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="sj:ShareBasedCompensationArrangementByShareBasedPaymentAwardsExpirationDate">February 4, 2024</ix:nonNumeric></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
31, 2022, the Company had warrants exercisable for&#160;<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber" scale="0" unitRef="shares">3,011,850</ix:nonFraction>&#160;Class A ordinary shares with weighted average life of&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms">1.1</ix:nonNumeric>&#160;years
and expired on&#160;<ix:nonNumeric contextRef="c5" format="ixt:date-monthname-day-year-en" name="us-gaap:WarrantsAndRightsOutstandingMaturityDate">February 4, 2024</ix:nonNumeric>.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>Unit
Purchase Option</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On February
8, 2019,&#160;<ix:nonNumeric contextRef="c424" name="sj:DescriptionOfUnitPurchaseOption">the Company sold to Chardan, for $100, an option to purchase up to 375,000 Units exercisable at $11.50 per Unit (or an aggregate
exercise price of $4,312,500) exercisable on the completion of the SPAC Transaction on May 7, 2020. On February 20, 2019, in connection
with the underwriters&#8217; election to exercise the over-allotment option in full, the Company issued Chardan an option to purchase
up to an additional 56,250 Units exercisable at $11.50 per Unit for no additional consideration. Each Unit consists of one ordinary share,
one redeemable warrant and one right (together &#8220;UPO&#8221;). The unit purchase option may be exercised for cash or on a cashless
basis, at the holder&#8217;s option, and expires February 5, 2024. For the year ended December 31, 2021, 100,000 UPO have been exercised
for 110,000 shares. As of December 31, 2022, the Company had UPO units exercisable for 530,000 Class A ordinary shares with weighted average
life of 1.1 years and expiring on February 5, 2024.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>Liability
Classified Warrants</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_31" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>All of the
Company&#8217;s outstanding warrants contain a contingent cash payment feature and therefore were accounted for as a liability and are
adjusted to fair value at each balance sheet date. The change in fair value of the warrant liability is recorded as change in fair value
of warrant liabilities in the consolidated statements of operations and comprehensive loss (Note 2).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

</div><!-- Field: Page; Sequence: 197; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>15.
SHAREHOLDERS&#8217; EQUITY (CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_32" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
accounted for the unit purchase option, inclusive of the receipt of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromDepositOnLoan" scale="0" unitRef="usd">100</ix:nonFraction>&#160;cash payment, as an expense of the Initial Public Offering
resulting in a charge directly to shareholders&#8217; equity. The Company estimated the fair value of the unit purchase option is approximately
$<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockOptionPlanExpense" scale="0" unitRef="usd">1,286,000</ix:nonFraction>, or $<ix:nonFraction contextRef="c425" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionSharePrice" scale="0" unitRef="usdPershares">2.98</ix:nonFraction>&#160;per Unit, using the Black-Scholes option-pricing model. The fair value of the unit purchase option granted to
the underwriters was estimated as of the date of grant using the following assumptions: (1) expected volatility of&#160;<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedGoodsAndNonemployeeServicesTransactionValuationMethodExpectedVolatilityRate" scale="-2" unitRef="pure">35</ix:nonFraction>%, (2) risk-free
interest rate of&#160;<ix:nonFraction contextRef="c0" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedGoodsAndNonemployeeServicesTransactionValuationMethodRiskFreeInterestRate" scale="-2" unitRef="pure">2.44</ix:nonFraction>% and (3) expected life of&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:durwordsen" name="us-gaap:ShareBasedGoodsAndNonemployeeServicesTransactionValuationMethodExpectedTerm1">five years</ix:nonNumeric>. The option and such units purchased pursuant to the option, as well
as the Class A ordinary shares underlying such units, the rights included in such units, the Class A ordinary shares that are issuable
for the rights included in such units, the warrants included in such units, and the shares underlying such warrants, have been deemed
compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA&#8217;s NASDAQ Conduct Rules.
Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing
180-day period) following the date of Initial Public Offering except to any underwriter and selected dealer participating in the Initial
Public Offering and their bona fide officers or partners. The option grants to holders demand and &#8220;piggy back&#8221; rights for
periods of five and seven years, respectively, from the effective date of the registration statement with respect to the registration
under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees
and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves.
The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the
event of a stock dividend, or the Company&#8217;s recapitalization, reorganization, merger or consolidation. However, the option will
not be adjusted for issuances of Class A ordinary shares at a price below its exercise price.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_33" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>Shares
to be issued</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_34" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
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was 3,540,960 earn-out shares required to be issued and the Company classified the related portion of earn-out liability in aggregated
of RMB200,100 as shares to be issued in the equity of the Company.</ix:nonNumeric>&#160;On March 25, 2021, the Company issued <ix:nonFraction contextRef="c426" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">3,540,960</ix:nonFraction> Class A ordinary
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_35" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
31, 2021, the earn-out liability related to SPAC Earn-out Target 2021 and Beelive Earn-out Target 2021 were met.&#160;<ix:nonNumeric contextRef="c9" name="sj:DescriptionOfEarnoutLiability">As a result, there
was 3,540,960 earn-out shares required to be issued and the Company classified the related portion of earn-out liability in aggregated
of RMB128,119 as shares to be issued in the equity of the Company.</ix:nonNumeric> On June 2, 2022, the Company issued <ix:nonFraction contextRef="c427" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">3,240,960</ix:nonFraction> Class A ordinary shares
and <ix:nonFraction contextRef="c428" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">300,000</ix:nonFraction> Class B ordinary shares for this achievement of earnout target.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_36" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>As of December
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2022.&#160;<ix:nonNumeric contextRef="c0" name="sj:DescriptionOfEarnoutLiability">As a result, there was 995,118 earn-out shares required to be issued and the Company classified the related portion of earn-out
liability in aggregated of RMB13,106 as shares to be issued in the equity of the Company.</ix:nonNumeric> Upon issuance of this report, a total of <ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="sj:IssuanceTotal" scale="0" unitRef="shares">507,804</ix:nonFraction>
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Wolter Global, the previous shareholder of Weilingtong. In addition, in connection with the acquisition of Weiliantong (Note 4), the Company
is required to issue <ix:nonFraction contextRef="c431" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">636,691</ix:nonFraction> Class A shares to Weilaijin (equivalent to RMB<ix:nonFraction contextRef="c431" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Cash" scale="6" unitRef="cny">20.8</ix:nonFraction> million) after received exercise notice.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_37" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_36"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>Shares
issued for service</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_38" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_37"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On November
18, 2022, the Company issued <ix:nonFraction contextRef="c432" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">61,500</ix:nonFraction> Class A ordinary shares for directors as part of compensations. </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_39" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_38"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>2021
Equity Incentive Plan</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_39"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>On August
3, 2021, the Employee Share Option Committee (the &#8220;ESOP Committee&#8221;) of the Company approved a resolution which appointed the
Chief Executive Officer and Chief Operating Officer as Authorized Officer of ESOP Committee. In 2021, the ESOP Committee approved the
granting of <ix:nonFraction contextRef="c433" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">2,053,783</ix:nonFraction> Restricted Share Units (&#8220;RSU&#8221;) under the 2021 Equity Incentive Plan. As of December 31, 2021, <ix:nonFraction contextRef="c434" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c434" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesOutstanding" scale="0" unitRef="shares">2,053,783</ix:nonFraction></ix:nonFraction>
RSUs were issued and outstanding. <ix:nonFraction contextRef="c435" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesShareBasedCompensationForfeited" scale="0" unitRef="shares">72,713</ix:nonFraction> RSU was forfeited and <ix:nonFraction contextRef="c435" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares" scale="0" unitRef="shares">1,264,114</ix:nonFraction> RSU was vested during the year ended December 31, 2022. As of
December 31, 2022, the Company had <ix:nonFraction contextRef="c436" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesOutstanding" scale="0" unitRef="shares">716,956</ix:nonFraction> RSU outstanding.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; "></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_RestrictedAssetsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:RestrictedAssetsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>16.
STATUTORY RESERVES AND RESTRICTED NET ASSETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_RestrictedAssetsDisclosureTextBlock-c0_cont_2" id="_RestrictedAssetsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company&#8217;s
ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory
laws and regulations permit payments of dividends by the Company&#8217;s PRC subsidiaries only out of their retained earnings, if any,
as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial
statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company&#8217;s
subsidiaries.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RestrictedAssetsDisclosureTextBlock-c0_cont_3" id="_RestrictedAssetsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>In accordance
with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company&#8217;s PRC subsidiaries,
a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the
enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise&#8217;s
PRC statutory accounts. A foreign-invested enterprise is required to allocate at least&#160;<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="sj:AppropriationToGeneralReservePercentageOfProfitNetOfTax" scale="-2" unitRef="pure">10</ix:nonFraction>% of its annual after-tax profit to the
general reserve until such reserve has reached&#160;<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="sj:GeneralReserveFundMaximumThresholdAsPercentageOfRegisteredCapital" scale="-2" unitRef="pure">50</ix:nonFraction>% of its respective registered capital based on the enterprise&#8217;s PRC statutory
accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors
for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as
cash dividends. WXBJ was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on
distributable profits. As of December 31, 2021 and 2022, the Company had appointed RMB<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StatutoryAccountingPracticesStatutoryCapitalAndSurplusRequired" scale="3" unitRef="cny">31,775</ix:nonFraction>&#160;and RMB <ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StatutoryAccountingPracticesStatutoryCapitalAndSurplusRequired" scale="3" unitRef="cny">39,208</ix:nonFraction>&#160;(US$<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StatutoryAccountingPracticesStatutoryCapitalAndSurplusRequired" scale="3" unitRef="usd">5,685</ix:nonFraction>), respectively
in its statutory reserves.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_RestrictedAssetsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>Foreign
exchange and other regulations in the PRC may further restrict the Company&#8217;s VIE from transferring funds to the Company in the form
of dividends, loans and advances. Amounts restricted include paid-in capital, additional paid-in capital and statutory reserves of the
Company&#8217;s PRC Subsidiaries and the equity of VIE, as determined pursuant to PRC generally accepted accounting principles. As of
December 31, 2021 and 2022, restricted net assets of the Company&#8217;s PRC subsidiaries and VIE were RMB<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherRestrictedAssets" scale="3" unitRef="cny">240,092</ix:nonFraction>&#160;and RMB<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherRestrictedAssets" scale="3" unitRef="cny">394,521</ix:nonFraction>&#160;(US$<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherRestrictedAssets" scale="3" unitRef="usd">57,200</ix:nonFraction>).</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>17.
COMMITMENTS AND CONTINGENCIES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(a)
Capital and Other Commitments</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
did not have significant capital and other commitments as of December 31, 2021 and 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b><i>(b)
Contingencies</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>From time
to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well
as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be
material to the consolidated financial statements.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SubsequentEventsTextBlock-c0_cont_1" escape="true" name="us-gaap:SubsequentEventsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>18.
SUBSEQUENT EVENTS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation id="_SubsequentEventsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
evaluated all events and transactions that occurred after December 31, 2022 up through the date the Company issued these consolidated
financial statements on April 28, 2023, for disclosure or recognition in the consolidated financial statements of the Company as appropriate.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>19.
C<span style="text-transform: uppercase">ONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>
</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_2" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
performed a test on the restricted net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation
S-X Rule 4-08 (3), &#8220;General Notes to Financial Statements&#8221; and concluded that it was applicable for the Company to disclose
the financial statements for the parent company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_3" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The subsidiary
did not pay any dividend to the Company for the years presented. For the purpose of presenting parent only financial information, the
Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed
balance sheets of the Company as &#8220;Investment in subsidiary&#8221; and the income of the subsidiary is presented as &#8220;share
of income of subsidiary&#8221;. Certain information and footnote disclosures generally included in financial statements prepared in accordance
with U.S. GAAP have been condensed and omitted.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_4" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
did not have other commitments or guarantees as of December 31, 2021 and 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

</div><!-- Field: Page; Sequence: 199; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->46<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>19.
C<span style="text-transform: uppercase">ONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY&#160;</span>(CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_5" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-transform: uppercase; "><b>PARENT
COMPANY BALANCE SHEETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_6" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="srt:ScheduleOfCondensedBalanceSheetTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">TOTAL LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

</div><!-- Field: Page; Sequence: 200; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->47<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>SCIENJOY HOLDING CORPORATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">(All amounts in thousands,
except share and per share data or otherwise stated)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-size: 10pt"><b>19.
C<span style="text-transform: uppercase">ONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY&#160;</span>(CONTINUED)</b></span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_7" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-transform: uppercase; ">PARENT
COMPANY STATEMENT OF INCOME</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_8" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="srt:CondensedStatementOfComprehensiveIncomeTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_9" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-transform: uppercase; ">PARENT
COMPANY STATEMENT OF CASH FLOWS</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_9"><ix:nonNumeric contextRef="c0" escape="true" name="srt:ScheduleOfCondensedCashFlowStatementTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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<ix:footnote id="ix_8_footnote" xml:lang="en-US">Investments of RMB234,176 included the following items:
Investments of RMB5,000 represented of 1.76% equity investment in the privately-held entity (&#8220;Zhejiang Qusu Technology Co., Ltd&#8221; or &#8220;QS&#8221;), in which the Company does not have significant influence and such investment do not have readily determinable fair values.
On May 27, 2021, the Company invested RMB10,000 for 4.44% equity interest in Qingdao Weilai JingChanye Investment Fund LP (&#8220;QD&#8221;), in which the Company does not have significant influence and such investment do not have readily determinable fair values.
On March 8, 2021, the Company invested RMB 8,000 for 13.79% equity interest in Jiada Hexin (Beijing) Technology Co., Ltd. (&#8220;Jiada&#8221;), in which the Company does not have significant influence and such investment do not have readily determinable fair values.
On December 8, 2021, the Company invested RMB2,925 for 19.50% equity interest in Liujiaoshou Drink Co., Ltd., in which the Company does not have significant influence and such investment do not have readily determinable fair values.
On December 8, 2021, the Company invested RMB3,800 for 19.00% equity interest in Beijing Dunengmaihuo Culture Media Co., Ltd., in which the Company does not have significant influence and such investment do not have readily determinable fair values.
On May 6, 2022, the Company signed an investment agreement to invest up to RMB5,000 into Valley Hongyuan (Hangzhou) Technology Partnership LP for its 14.28% equity interest, in which the Company does not have significant influence and such investment do not have readily determinable fair values. For the year ended December 31, 2022, the Company invested RMB2,000 into Valley Hongyuan (Hangzhou) Technology Partnership LP.
On December 9, 2022, the Company invested RMB5,000 for 1.55% equity interest in Chengdu Tianfu Yuanhe Jingu Venture Capital Center LP, in which the Company does not have significant influence and such investment do not have readily determinable fair values.
On December 19, 2022, the Company invested RMB25,000 in Banyou Century (Hangzhou) Technology Co., Ltd. for its 7.6923% equity interest, in which the Company does not have significant influence and such investment do not have readily determinable fair values.</ix:footnote><!--Text not found in footnote sections assigned to Schedule of long term investment-->
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{"company-data": {"conformed-name": "Scienjoy Holding Corp", "cik": "0001753673", "assigned-sic": "7374", "irs-number": "000000000", "state-of-incorporation": "D8", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "001-38799", "film-number": "23860009"}, "business-address": {"street1": "RM 1118, 11TH FLOOR, BUILDING 3, NO. 99", "street2": "WANGZHOU RD.,LIANGZHU ST.YUHANG DISTRICT", "city": "HANGZHOU, ZHEJIANG PROVINCE", "state": "F4", "zip": "311113", "phone": "(86)0571-88586668"}, "mail-address": {"street1": "RM 1118, 11TH FLOOR, BUILDING 3, NO. 99", "street2": "WANGZHOU RD.,LIANGZHU ST.YUHANG DISTRICT", "city": "HANGZHOU, ZHEJIANG PROVINCE", "state": "F4", "zip": "311113"}, "former-company": {"former-conformed-name": "Wealthbridge Acquisition Ltd", "date-changed": "20180919"}}
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
20-F
(Mark
One)
☐
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended
December 31
,
2022
.
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of event requiring this shell company report
For
the transition period from           to
Commission
File Number:
001-38799
SCIENJOY
HOLDING CORPORATION
(Exact
name of Registrant as specified in its charter)
N/A
(Translation
of Registrant's name into English)
British
Virgin Islands
(Jurisdiction
of incorporation or organization)
RM
1118, 11
th
Floor, Building 3, No. 99 Wangzhou Rd
.,
Liangzhu St
.
Yuhang
District
,
Hangzhou
, Zhejiang Province,
311113
,
China
(86)
0571 8858 6668
(Address
of principal executive offices)
Xiaowu
He
Chief
Executive Officer
RM
1118, 11
th
Floor, Building 3, No. 99 Wangzhou Rd
.,
Liangzhu St
.
Yuhang
District
,
Hangzhou
, Zhejiang Province,
311113
,
China
(86)
0571 8858 6668
Email:
xiaowu.he@scienjoy.com
(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities
registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A Ordinary shares, no par value
SJ
Nasdaq
Capital Market
Securities
registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Class
A Ordinary Shares
Warrants
Indicate
the number of outstanding shares of each of the issuer's classes of capital stock or common stock as of the close of business covered
by the annual report.
36,684,668
Class A ordinary shares and
2,925,058
Class B ordinary shares were issued and outstanding as of December 31, 2022.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes     ☒
No
If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934.
☐ Yes     ☒
No
Note
    –
Checking
    the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 from their obligations under those Sections.
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
☒
Yes
☐
No
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
☒
Yes
☐
No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging
growth company. See definition of "accelerated filer and large accelerated filer" and "emerging growth company"
in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated file
Non-accelerated filer
Emerging growth company
☐
☐
☒
☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 13(a) of the Exchange Act.
☐
†
The
    term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards
    Board to its Accounting Standards Codification after April 5, 2012.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
☐
Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
International Financial Reporting Standards as issued by the International Accounting Standards Board
Other
☒
☐
☐
If
"other" has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow.
☐ Item
17     ☐ Item 18
If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).
☐
Yes
☒
No
(APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
☐
Yes     ☐ No
Table
of Contents
INTRODUCTION
iii
FORWARD-LOOKING
    INFORMATION
vii
PART
    I
1
ITEM
    1.
IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM
    2.
OFFER
    STATISTICS AND EXPECTED TIMETABLE
1
ITEM
    3.
KEY
    INFORMATION
1
A.
[Reserved]
1
B.
Capitalization
    and Indebtedness
1
C.
Reasons
    for the Offer and Use of Proceeds
1
D.
Risk
    Factors.
1
ITEM
    4.
INFORMATION
    ON THE COMPANY
45
A.
History
    and Development of the Company
45
B.
Business
    Overview
48
C.
Organizational
    Structure
83
D.
Property,
    Plants and Equipment
86
ITEM
    4A.
UNRESOLVED
    STAFF COMMENTS
86
ITEM
    5.
OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS
86
A.
Operating
    Results
86
B.
Liquidity
    and Capital Resources
95
C.
Research
    and Development, Patents and Licenses, etc.
97
D.
Trend
    Information
97
E.
Critical
    Accounting Estimates
97
ITEM
    6.
DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES
104
A.
Directors
    and Executive Officers
104
B.
Compensation
    of Directors and Executive Officers
107
C.
Board
    Practices
108
D.
Employees
109
E.
Share
    Ownership
109
F.
Disclosure
    of a Registrant's Action to Recover Erroneously Awarded Compensation
111
ITEM
    7.
MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
111
A.
Major
    Shareholders
111
B.
Related
    Party Transactions
111
C.
Interests
    of Experts and Counsel
116
ITEM
    8.
FINANCIAL
    INFORMATION
116
A.
Consolidated
    Statements and Other Financial Information
116
B.
Significant
    Changes
116
ITEM
    9.
THE
    OFFER AND LISTING
117
A.
Offer
    and Listing Details
117
B.
Plan
    of Distribution
117
C.
Markets
117
D.
Selling
    Shareholders
117
E.
Dilution
117
F.
Expenses
    of the Issue
117
i
ITEM
    10.
ADDITIONAL
    INFORMATION
117
A.
Share
    Capital
117
B.
Memorandum
    and Articles of Association
118
C.
Material
    Contracts
129
D.
Exchange
    Controls
129
E.
Taxation
129
F.
Dividends
    and Paying Agents
134
G.
Statement
    by Experts
134
H.
Documents
    on Display
134
I.
Subsidiary
    Information
134
J.
Annual
    Report to Security Holders
134
ITEM
    11.
QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
134
ITEM
    12.
DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES
135
A.
Debt
    Securities
135
B.
Warrants
    and Rights
135
C.
Other
    Securities
135
D.
American
    Depositary Shares
135
PART
    II
136
ITEM
    13.
DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES
136
ITEM
    14.
MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
136
ITEM
    15.
CONTROLS
    AND PROCEDURES
136
ITEM
    16.
Reserved
137
ITEM
    16.A.
AUDIT
    COMMITTEE FINANCIAL EXPERT
137
ITEM
    16.B.
CODE
    OF ETHICS
137
ITEM
    16.C.
PRINCIPAL
    ACCOUNTANT FEES AND SERVICES
137
ITEM
    16.D.
EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
138
ITEM
    16.E.
PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
138
ITEM
    16.F.
CHANGE
    IN REGISTRANT'S CERTIFYING ACCOUNTANT
138
ITEM
    16.G.
CORPORATE
    GOVERNANCE
139
ITEM
    16.H.
MINE
    SAFETY DISCLOSURE
139
ITEM
    16.I.
DISCLOSURE
    REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
139
PART
    III
140
ITEM
    17.
FINANCIAL
    STATEMENTS
140
ITEM
    18.
FINANCIAL
    STATEMENTS
140
ITEM
    19.
EXHIBITS
140
ii
INTRODUCTION
On
May 7, 2020, Scienjoy Holding Corporation, formerly known as Wealthbridge Acquisition Limited ("Wealthbridge"), consummated
the transactions contemplated by the Share Exchange Agreement (the "Share Exchange Agreement"), dated as of October 28, 2019,
by and among Scienjoy Holding Corporation ("SHC"), formerly known as Wealthbridge Acquisition Limited, Scienjoy Inc., Lavacano
Holdings Limited ("Lavacano"), and WBY Entertainment Holdings Ltd. ("WBY", together with Lavacano, the "Sellers"),
pursuant to which SHC acquired 100% the issued and outstanding equity interests of Scienjoy Inc. from the Sellers and changed its name
to Scienjoy Holding Corporation.
iii
USE
OF CERTAIN TERMS
As
used in this annual report, unless the context otherwise requires, references to the terms "Company," "we," "us"
and "our" refer to Scienjoy Holding Corporation and, where applicable, our wholly-owned subsidiaries. Unless otherwise indicated
and except where the context otherwise requires, references in this annual report to:
●
"Active broadcasters"
    refers to the hosts perform live music, dancing and other entertaining performance in front of the audience through the screens on
    the mobile platform;
●
"active users"
    refers to users who visited our platforms at least once in a given period;
●
"ARPPU" refers
    to average live streaming revenue per paying user in a given period;
●
"BeeLive Acquisition"
    refers to the Company's acquisition of the BeeLive businesses and related transactions;
●
"Business Combination"
    refers to the Company's acquisition of Scienjoy Inc. on May 7, 2020 and related transactions;
●
"CDN" refers
    to content delivery network;
●
"CDZH" refers
    to Chuangda Zhihui (Beijing) Technology Co., Ltd.;
●
"CAGR" refers
    to compound annual growth rate;
●
"China" and
    the "PRC" refer to the People's Republic of China, including Hong Kong and Macau;
●
"Golden Shield"
    refers to Golden Shield Enterprises Limited;
●
"Heshine" refers
    to Heshine Holdings Limited;
●
"HKD" refers
    to Hong Kong Dollar, the official currency of the Hong Kong Special Administrative Region;
●
"Holgus X"
    refers to Holgus Sixiang Information Technology Co., Ltd.;
●
"Holgus H"
    refers to Holgus Sixiang Haohan Internet Technology Co., Ltd.;
●
"Hong Kong"
    refers to the Hong Kong Special Administrative Region of the People's Republic of China;
●
"HX" refers
    to Hai Xiu (Beijing) Technology Co., Ltd.;
●
"HYDC" refers
    to Beijing Huayi Dongchen Technology Co., Ltd.;
●
"HYHF" refers
    to HuaYuHeFeng (Qingdao) Technology Co., Ltd.;
●
"HZ" refers
    to Sixiang Huizhi (Beijing) Technology Culture Co., Ltd.;
●
"Kashgar Times"
    refers to Kashgar Sixiang Times Internet Technology Co., Ltd.;
●
"Kashgar Lehong"
    refers to Kashgar Sixiang Lehong Information Technology Co., Ltd.;
●
"Lavacano"
    refers to Lavacano Holdings Limited;
iv
●
"LH" refers
    to Beijing Le Hai Technology Co., Ltd.;
●
"Macau" refers
    to the Macau Special Administrative Region of the People's Republic of China;
●
"MF" refers
    to Sixiang Mifeng (Tianjin) Technology Co., Ltd.;
●
"our PRC subsidiaries"
    refer to our WFOEs, i.e. Sixiang Infinite (Beijing) Technology Co., Ltd. ("WXBJ"), and Sixiang Infinite (Zhejiang) Culture
    Technology Co., Ltd. ("WXZJ"), Scienjoy International Limited, and Scienjoy BeeLive Limited and their respective subsidiaries.
    WXBJ's subsidiaries  include Sixiang Zhihui (Beijing) Technology Co., Ltd. ("ZH"),
Sixiang
    Yingyue (Shanghai) Technology Co., Ltd. ("SXYY"),
Holgus Sixiang Information Technology Co., Ltd. ("Holgus
    X"), Kashgar Sixiang Times Internet Technology Co., Ltd. ("Kashgar Times"), Kashgar Sixiang LeHong Information
    Technology Co., Ltd. ("Kashgar Lehong"), Sixiang ZhiHui (HaiNan) Investment ("ZHHN"), and Holgus Sixiang
    Haohan Internet Technology Co., Ltd. ("Holgus H"), WXZJ's subsidiary includes Sixiang Zhihui (Zhejiang) Culture
    Technology Co., Ltd. ("ZHZJ");
●
"paying user"
    refers to a registered user that has purchased virtual currency on our platforms at least once during the relevant period;
●
"paying ratio"
    for a given period is calculated by dividing (i) the sum of paying users in such period, by(ii) the total active users in such period;
●
"Purchase Agreement"
    refers to Common Stock Purchase Agreement, entered between the Company and White Lion Capital on February 23, 2021;
●
"QAU" refers
    to the number of active users in a given quarter;
●
"QY" or "Zhihui Qiyuan" refers to Zhihui Qiyuan (Beijing) Technology Co., Ltd.;
●
"QYHN" refers
    to ZhiHui Qiyuan (Hainan) Investment Co., Ltd.;
●
"QYHZ" or "Sixiang
    Qiyuan" refers to Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd.;
●
"registered user"
    refers to a user that has registered and logged onto our platform at least once since registration;
●
"RMB" or "Renminbi"
    refers to the legal currency of the People's Republic of China;
●
"Scienjoy HK"
    refers to Scienjoy International Limited;
●
"SG" refers
    to Beijing Sixiang Shiguang Technology Co., Ltd.;
●
"Share Exchange Agreement"
    refers to the Share Exchanged Agreement, dated October 28, 2019, by and among Scienjoy Inc., the Company, Lavacano Holdings Limited,
    and WBY Entertainment Holdings Ltd.;
●
"SH" refers
    to ShiHuai (Beijing) Technology Co. Ltd.;
●
"SHC" refers
    to Scienjoy Holding Corporation, a British Virgin Islands holding company;
●
"SHWL" refers
    to ShanHaiWeiLan (Beijing) Technology Co., Ltd.;
●
"Sixiang Qiyuan VIEs"
    refer to Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. ("QYHZ") and its subsidiaries, including Xiuli (Zhejiang)
    Culture Technology Co., Ltd. ("XL"), Leku (Zhejiang) Culture Technology Co., Ltd. ("LK"), Haifan (Zhejiang)
    Culture Technology Co., Ltd. ("HF"), Xiangfeng (Zhejiang) Culture Technology Co., Ltd. ("XF") and Hongren
    (Zhejiang) Culture Technology Co., Ltd. ("HR"), each such company formed under PRC Laws;
●
"SY" refers
    to Tianjin Sihui Peiying Technology Co., Ltd.;
●
"TF" refers
    to Tongfang Investment Fund Series SPC;
●
"US$", "USD"
    "dollars" or "U.S. dollars" refers to the legal currency of the United States;
●
"U.S. GAAP"
    are to accounting principles generally accepted in the United States;
●
"variable interest
    entity," "VIEs" or "VIE entities" refer to the variable interest entities, including Zhihui Qiyuan
    VIEs and Sixiang Qiyuan VIEs.  Each of the VIEs is consolidated into our consolidated financial statements in accordance
    with U.S. GAAP as if they were its wholly-owned subsidiaries;
v
●
"WBY" refers
    to WBY Entertainment Holdings Ltd.;
●
"Wealthbridge"
    refers to Wealthbridge Acquisition Limited;
●
"White Lion Capital"
    refers to White Lion Capital LLC;
●
"WLT" or "Weiliantong"
    refers to Beijing Weiliantong Technology Co., Ltd.;
●
"WXBJ" refers
    to Sixiang Wuxian (Beijing) Technology Co., Ltd.;
●
"WXZJ" refers
    to Sixiang Wuxian (Zhejiang) Culture Technology Co., Ltd.;
●
"WFOEs" or
    "our WFOEs" refer to our wholly foreign owned entities in China, which include WXBJ and WXZJ;
●
"ZH" refers
    to Sixiang Zhihui (Beijing) Technology Co., Ltd.;
●
"ZHHN" refers
    to Sixiang Zhihui (Hainan) Technology Co., Ltd.;
●
"ZHZJ" refers
    to Sixiang Zhihui (Zhejiang) Culture Technology Co., Ltd; and
●
"Zhihui Qiyuan VIEs"
    refer to Zhihui Qiyuan (Beijing) Technology, Co., Ltd. and its subsidiaries, including Zhihui Qiyuan (Beijing) Technology, Co. Ltd.
    (智汇启源(北京)科技有限公司) or Zhihui Qiyuan, a limited
    liability company organized and existing under the laws of the PRC, and Zhihui Qiyuan's subsidiaries, including Hai Xiu (Beijing)
    Technology Company Co. Ltd. ("HX"), Beijing Le Hai Technology Co. Ltd. ("LH"), Beijing Sixiang Shiguang Technology
    Co. Ltd. ("SG"), Sixiang Mifeng (Tianjin) Technology Co., Ltd (formerly known as Tianjin Guangju Dingfei Technology Co.,
    Ltd.) ("MF"), Changxiang Infinite Technology (Beijing) Co., Ltd. ("CX"), ZhiHui QiYuan (HaiNan) Investment
    Co., Ltd. ("QYHN"),  HuaYuHeFeng (Qingdao) Technology Co., Ltd. ("HYHF"), Beijing Weiliantong Technology
    Co., Ltd ("WLT"). Chuangda Zhihui (Beijing) Technology Co., Ltd ("CDZH"), Hongcheng Huiying (Zhejiang) Technology
    Industry Development Co., Ltd. ("HCHY"), and Beijing Huayi Dongchen Technology Co., Ltd. ("HYDC"), each such
    company formed under PRC Law.
Translations
of balances in our consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB
into USD (or "US$") as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were
calculated at the rate of US$1.00 = RMB 6.8972, representing the noon buying rate in The City of New York for cable transfers of RMB
as certified for customs purposes by the Federal Reserve Bank of New York on the last trading day of December 31, 2022.
No
representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that
rate, or at any other rate.
vi
FORWARD-LOOKING
INFORMATION
Certain
statements in this annual report may constitute "forward-looking statements" for purposes of the federal securities laws.
Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intends," "may," "might," "plan," "possible," "potential," "predict,"
"project," "should," "would" and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this annual report may
include, for example, statements about:
●
the goals and strategies
    of the VIEs and the Company as a whole;
●
the VIEs' ability
    to attract new users and talent to our platform;
●
the future business development,
    financial condition and results of operations of the VIEs and the Company as a whole;
●
the expected growth in,
    and market size of, the mobile live streaming platforms;
●
expected changes in our
    revenue, costs or expenditures of the VIEs and the Company as a whole;
●
the VIEs' ability
    to continue to source and offer new and attractive products and services;
●
the expectations regarding
    demand for and market acceptance of our brands, platforms and services;
●
the expectations regarding
    growth in our user base and level of user engagement;
●
the VIEs' ability
    to attract, retain and monetize users;
●
the VIEs' ability
    to continue to develop new technologies and/or upgrade our existing technologies;
●
growth of and trends of
    competition in mobile live streaming industry;
●
government policies and
    regulations relating to mobile live streaming industry; and
●
general economic and business
    conditions in the markets the VIEs have businesses.
The
preceding list is not intended to be an exhaustive list of all of our forward-looking statements. In particular, for additional information
regarding known material factors that could affect our operating results and performance, please read the section entitled "Risk
Factors" in this annual report. Should one or more of the risks or uncertainties described in this annual report made in connection
therewith occur, or should underlying assumptions prove incorrect, actual results and plans could different materially from those expressed
in any forward-looking statements.
vii
PART
I
ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not
applicable.
ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not
applicable.
ITEM
3. KEY INFORMATION
A.
[Reserved]
B.
Capitalization and Indebtedness
Not
applicable.
C.
Reasons for the Offer
    and Use of Proceeds
Not
applicable.
D.
Risk Factors.
Summary
of Risk Factors
An
investment in our securities involves significant risks. Below is a summary of material risks that we face, organized under relevant
headings. These risks are discussed fully in "Item 3. Key Information—D. Risk Factors."
Risks
Factors Relating to Our Business and Industry
●
We may fail to retain our
    existing users, keep them engaged or further grow our user base.
●
Our revenue growth is primarily
    dependent on paying users and revenue per paying user. If we fail to continue to grow or maintain our paying user base or fail to
    continue to increase revenue per paying user, our live streaming revenue may not increase, which may materially and adversely affect
    our results of operations and financial condition.
●
We rely on a single monetization
    model.
●
We may fail to offer attractive
    content on our platforms.
●
Failure to attract, cultivate,
    and retain top broadcasters may materially and negatively affect our user engagement and thus our business and operations.
●
If we fail to implement
    an effective revenue sharing fee policy, we may lose our broadcasters and our results of operations and financial condition may be
    materially and negatively affected.
●
We partner with various
    talent agencies to manage our broadcasters. If we are not able to maintain our relationship with talent agencies, our operations
    may be materially and adversely affected.
●
We may fail to successfully
    implement our monetization strategies.
●
Our business depends on
    a strong brand, and any failure to maintain, protect, and enhance our brand would hurt our ability to retain or expand our user base,
    or our ability to increase their level of engagement.
1
●
Our core values of focusing
    on user experience and user satisfaction first and acting for the long-term may conflict with the short-term operating results of
    our business.
●
If we fail to obtain or
    maintain the required licenses and approvals or if we fail to comply with laws and regulations applicable to our industry, our business,
    results of operations, and financial condition may be materially and adversely affected.
●
We may be subject to intellectual
    property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked
    to our platforms, or distributed to our users, or for proprietary information appropriated by former employees, which may materially
    and adversely affect our business, financial condition and prospects.
●
Unauthorized use of our
    intellectual property and the expenses incurred in protecting our intellectual property rights may materially and adversely affect
    our business.
●
Our content monitoring
    system may not be effective in preventing misconduct by our users and misuse of our platforms.
●
We may be held liable for
    information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if such content is deemed
    to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us.
●
The complexity, uncertainties,
    and changes in PRC regulation of the Internet industry and companies may materially and adversely affect our business and financial
    condition.
●
Concerns about the collection,
    use, and disclosure of personal data and other privacy-related and security matters could deter customers and users from using our
    services and adversely affect our reputation and business.
●
Continuing efforts of our
    executive officers, key employees, and qualified personnel are essential to our business and the loss of their services may adversely
    and negatively impact our business and results of operations.
●
We are subject to risks
    relating to litigation.
●
The appointed Temporary
    Receiver of Link Motion Inc. (f/k/a NQ Mobile Inc.) may bring an action to restore Link Motion Inc.'s senior position in the
    Showself businesses, which may result in claims against us.
●
Contractual disputes with
    our talent agencies may harm our reputation, and may be costly or time-consuming to resolve.
●
Key performance metrics
    used by us, such as QAUs, paying users, ARPPU and paying ratio, may overstate the number of our active and paying users, which may
    lead to an inaccurate interpretation of our revenue metrics and our business operations by our management and by investors, and may
    even misleadingly affect management's business judgment of our operations.
●
Restrictions on virtual
    currency may adversely affect our revenues.
●
Our results of operations
    are subject to quarterly fluctuations due to seasonality.
●
We do not currently have
    business insurance to cover our main assets and business. Any uninsured occurrence of business disruption, litigation, or natural
    disaster could expose us to significant costs, which could have an adverse effect on our results of operations.
●
Failure to achieve and
    maintain effective internal and disclosure controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a
    material adverse effect on our business and share price.
●
COVID-19 pandemic may have
    an adverse impact on our results of operations and financial condition for the fiscal year 2023.
2
Risks
Related to Our Corporate Structure
We
and the VIEs are also subject to risks and uncertainties related to our corporate structure, including, but not limited to, the following:
●
We conduct our business
    through the VIEs by means of contractual arrangements. PRC laws and regulations governing our businesses and the validity of certain
    of our contractual arrangements are uncertain. If the PRC courts or administrative authorities determine that these contractual arrangements
    do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected.
    In addition, changes in such PRC laws and regulations may materially and adversely affect our business.
●
Substantial uncertainties
    exist with respect to whether the foreign investor's controlling PRC onshore variable interest entities via contractual arrangements
    will be recognized as "foreign investment" and how it may impact the viability of our current corporate structure and
    operations. Also, our VIE structure may be inquired or challenged by relevant PRC governmental authorities when SHC issues additional
    securities for future financing in a public market under certain PRC laws and rules.
●
We depend upon the contractual
    arrangements in conducting our business in China, which may not be as effective as direct ownership in providing operational control.
●
We may lose the ability
    to use and enjoy assets held by the VIEs that are important to our business if the VIEs declare bankruptcy or become subject to a
    dissolution or liquidation proceeding.
●
Contractual arrangements
    may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial
    condition and the value of your investment.
●
We may rely on dividends
    paid by our PRC subsidiaries to fund cash and financing requirements. Any limitation on the ability of our PRC subsidiaries to pay
    dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our
    Class A ordinary shares.
Risks
Related to Doing Business in China
Our
WFOEs and the VIEs are based in China and have the majority of the operations in China, so we and the VIEs face risks and uncertainties
related to doing business in China in general, including, but not limited to, the following:
●
Uncertainties in the interpretation
    and enforcement of PRC laws and regulations could limit the legal protections available to you and us.
●
Regulation and censorship
    of information disseminated over the mobile and Internet in China may adversely affect our business and subject us to liability for
    streaming content or content posted on our platforms.
●
Adverse changes in global
    or China's economic, political or social conditions or government policies could have a material adverse effect on our business,
    results of operations and financial condition.
●
The PRC government's
    significant oversight over our business operation could result in a material adverse change in the operations of the VIEs and our
    company as a whole and the value of our Class A ordinary shares.
●
Rules and regulations in
    China can change quickly with little or no advance notice and their interpretation and the implementation involve uncertainty, which
    could materially and adversely affect the operations of the VIEs and our company as a whole and the value of our securities.
●
Our shares may be delisted
    and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors
    for two consecutive years. The delisting and the cessation of trading of our shares, or the threat of their being delisted and prohibited
    from being traded, may materially and adversely affect the value of your investment.
●
The filling requirements
    of the CSRC will be required in connection with an offering under PRC rules, regulations or policies, and, if required, we shall
    further obtain approval or confirmation from other PRC governmental authorities with respect to future offering, and we cannot predict
    how soon we will be able to complete such filings in CSRC or whether obtain such approvals from other PRC governmental authorities.
●
The VIEs may be subject
    to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable
    laws and obligations could have a material and adverse effect on the business, financial condition and results of operations of the
    VIEs and our company, and future offerings in a public market as a whole.
3
●
It may be difficult for
    overseas shareholders and/or regulators to conduct investigation or collect evidence within China.
●
Failure to comply with
    laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause us to lose
    customers or otherwise harm our business.
●
We may rely on dividends
    and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements we may have, and any
    limitation on the ability of our Chinese subsidiaries to make payments to us could have a material and adverse effect on our ability
    to conduct our business.
●
Uncertainties exist with
    respect to the interpretation and implementation of Anti-Monopoly Guidelines for Internet Platforms and how it may impact the business
    operations of the VIEs.
●
The recent joint statement
    by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S. House of Representatives,
    all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties
    to our future offerings, business operations share price and reputation.
●
Currently, there is no
    law or regulation specifically governing virtual asset property rights and therefore it is not clear what liabilities, if any, live
    streaming platform operators may have for virtual assets.
●
Under the PRC enterprise
    income tax law, we may be classified as a PRC "resident enterprise," which could result in unfavorable tax consequences
    to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.
●
PRC regulations relating
    to offshore investment activities by PRC residents may limit the ability of WXBJ and WXZJ (our indirect wholly-owned subsidiaries
    in China) to increase our registered capital or distribute profits to us or otherwise expose us to liability and penalties under
    PRC law.
●
Governmental control of
    currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
Risks
related to Investment in our Class A Ordinary Shares
●
We are an "emerging
    growth company" and the reduced disclosure requirements applicable to emerging growth companies may make our securities less
    attractive to investors.
●
Heshine will control the
    outcome of our shareholder actions.
●
We are a "controlled
    company" within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate
    governance requirements that provide protection to shareholders of other companies.
●
Our dual-class share structure
    with different voting rights and conversion of certain ordinary shares will limit your ability to influence corporate matters and
    could discourage others from pursuing any change of control transactions that holders of ordinary shares may view as beneficial.
●
Fluctuations in exchange
    rates could have a material adverse effect on our results of operations and the value of your investment.
●
Certain provisions of the
    Fourth Amended and Restated Memorandum and Articles of Association may be deemed to have an antitakeover effect.
●
We are a foreign private
    issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S.
    domestic public companies.
●
NASDAQ may apply additional
    and more stringent criteria for our continued listing.
4
Risks
Factors Relating to Our Business and Industry
We
may fail to retain our existing users, keep them engaged or further grow our user base.
Our
revenue primarily derives from live streaming services, and therefore our ability to maintain and increase the size of our user base
and user engagement level is critical to our success. If our user base becomes smaller or our users become less active, it is possible
that there would be less spending on the virtual gifts on our platforms. Smaller user base or lower user engagement would make it difficult
to retain top broadcasters. Consequently, our financial condition would suffer a decline in revenue, and our business and results of
operations will be materially and adversely impacted.
To
continue to maintain and improve our existing user base and user engagement, we must ensure that we adequately and timely identify and
respond to changes in user preferences, attract and retain enough popular broadcasters, and offer new and attractive features and content.
There is no guarantee that we could meet all of these goals. A number of factors could negatively affect user growth, and engagement,
including if:
●
we fail to deliver our
    services or address users' requests in a rapid and reliable manner and therefore the user experience is adversely affected;
●
we fail to innovate the
    content on our platforms that keeps users interested and engaged;
●
we fail to retain popular
    broadcasters who are able to keep users engaged;
●
we are unable to combat
    spam on or inappropriate or abusive use of our platforms, which may lead to negative public perception of us and our brand;
●
we fail to address users'
    concerns related to privacy and communication, safety, security or other factors;
●
there are adverse changes
    in our services; and
●
the growth of the number
    of mobile users in China does not continue to increase.
Our
revenue growth is primarily dependent on paying users and revenue per paying user. If we fail to continue to grow or maintain our paying
user base or fail to continue to increase revenue per paying user, our live streaming revenue may not increase, which may materially
and adversely affect our results of operations and financial condition.
Whether
we can continue to increase our paying ratio amongst our users or revenue per paying user depends on many factors, and many of them are
out of our control. We expect that our business will continue to be heavily dependent on revenue collected from paying users in the near
future. Any decline in the number of paying users or revenue per paying user may materially and adversely affect our results of operations
and financial condition.
We
rely on a single monetization model.
Mobile
live streaming platforms use three basic categories of revenue sharing models to monetize their live streaming operations: gift model,
advertise model, and shopping model. We currently mainly use the gift model, generating our revenue from virtual gifts purchased by our
users. Although we intend to diversify our revenue sharing models, such as by generating revenue from advertisement, there is no guarantee
we will succeed. Therefore, decreases in revenues generated from the gift model will materially and adversely affect our business, results
of operations and financial condition.
We
may fail to offer attractive content on our platforms.
High
quality live streaming content is important for us to attract, maintain and increase our user base and user engagement. Our content library
is constantly evolving and growing. However, if we fail to expand and diversify our content offerings, identify trending and popular
genres, or maintain the quality of our content, we may experience decreasing viewership and user engagement, which may materially and
adversely affect our financial conditions and results of operations.
In
addition, we largely rely on our broadcasters to create high-quality and fun live streaming content. We have in place a comprehensive
incentive mechanism to encourage broadcasters and talent agencies to supply content that is attractive to viewers. Also, talent agencies
cooperating with us may guide or influence broadcasters to develop content that is well received by viewers. However, if we fail to identify
the latest trends and timely guide broadcasters and talent agencies accordingly, our viewer number may decline and our results of operations
and financial condition may be materially and adversely affected.
5
Failure
to attract, cultivate, and retain top broadcasters may materially and negatively affect our user engagement and thus our business and
operations.
The
majority of our revenue is from sale of virtual gifts to users. The charisma and the high-quality content of top broadcasters are primary
contributors to user stickiness, and is difficult to be replicated by other less popular broadcasters.
Although
we have made efforts to support top broadcasters in order to retain them, there is no guarantee that they will choose to stay with us.
Top broadcasters tend to receive more offers with attractive terms than the other broadcasters and some of them may choose to move to
other platforms. Their departure may cause a corresponding decline in our user base.
Sometimes
we may face legal disputes with competing platforms from which we attract some top broadcasters. Although we are not the primary target
of these legal disputes, broadcasters involved may be subject to fines or even injunctions, which may render our investment in recruiting
them meaningless. Conversely, some of our top broadcasters have left our platforms for competing platforms despite still being in a contractual
relationship with us, which have raised legal disputes. Even if we prevail in all such legal disputes, the departures of any top broadcaster
may still have a negative impact on our user engagement and reputation. To retain top broadcasters, we must devise better compensation
schemes, improve our monetization capabilities, and help the top broadcasters reach a wider audience. Although we strive to improve in
these respects, there is no guarantee that the broadcasters will not leave our platforms.
In
terms of broadcaster cultivation, we cannot guarantee that the performance metrics we use to track promising broadcasters will enable
us to identify future top broadcasters. Some of the broadcasters we identify as promising may turn out to be underperforming, and we
may also fail to spot truly promising broadcasters in the early stages of their career. In addition to a waste of resources, either one
of these scenarios could prevent us from cultivating top broadcasters, which could weaken our core competitive strength against competing
platforms and thus cause an outflow of users to those platforms.
If
we fail to implement an effective revenue sharing fee policy, we may lose our broadcasters and our results of operations and financial
condition may be materially and negatively affected.
We
pay revenue sharing fees to the broadcasters and talent agencies as compensation, which are determined based on a percentage of revenue
from virtual gift sales that are attributed to the broadcasters' live streaming performance. Failure to implement a satisfactory
revenue sharing fee policy may result in undesired departures of broadcasters. For example, in 2018 we lowered our revenue sharing percentage
for our broadcasters, resulting in departures of a large number of our broadcasters from our platforms. As a result, our revenue was
adversely affected. Since then, we adjusted our revenue sharing fee policy to increase the sharing percentage for broadcasters. However,
there is no guarantee that our current and future revenue sharing fee policy will keep our broadcasters satisfied over an extended period
of time.
We
partner with various talent agencies to manage our broadcasters. If we are not able to maintain our relationship with talent agencies,
our operations may be materially and adversely affected.
We
work with talent agencies to manage and organize broadcasters on our platforms. Cooperation with talent agencies increases our operational
efficiency in terms of discovering, supporting, and managing broadcasters in a more organized and structured manner, and turning amateur
broadcasters into full-time broadcasters. If we fail to maintain our relationship with many of the talent agencies we are currently working
with, we may not be able to retain or attract broadcasters.
Failure
to effectively manage our growth and control our periodic spending to maintain such growth may materially and adversely affect our brand,
and our business and results of operations may be materially and adversely affected.
Our
rapid growth has placed, and continues to place, a significant strain on our management and resources. We may need to establish and expand
our capacities in all aspects of our business, such as operations, research and development, sales and marketing, and general administration,
in order to meet the increasing needs from a rapidly evolving market. We cannot assure you that our current level of growth will be sustainable.
We believe that our continued growth will depend on our ability to attract and retain viewers and top broadcasters, to develop an infrastructure
to service and support an expanding body of viewers and broadcasters, to explore new monetization avenues, and to convert non-paying
users to paying users and increase user engagement levels. We cannot assure you that we will be successful in any of the above.
6
We
expect our costs and expenses to continue to increase in the future as we anticipate that we will need to continue to implement, from
time to time, a variety of new and upgraded operational, informational and financial systems, procedures and controls on an as-needed
basis, including the continued improvement of our accounting and other internal management systems. We will also need to expand, train,
manage and motivate our workforce and manage our relationships with viewers, talent agencies, broadcasters, and other business partners.
All of these endeavors involve risks and will require substantial management efforts and skills and significant additional expenditures.
We expect to continue to invest in our infrastructure in order to provide our services rapidly and reliably to viewers and broadcasters.
Continued growth could end up straining our ability to maintain reliable service levels for all of our viewers and broadcasters, to develop
and improve our operational, financial, legal and management controls, and to enhance our reporting systems and procedures. Managing
our growth will require significant expenditures and the allocation of valuable management resources. If we fail to achieve the necessary
level of efficiency in our organization as we grow, our business, results of operations, and financial condition could be harmed.
We
may fail to successfully implement our monetization strategies.
Our
streaming platforms are free to access, and we generate revenues primarily from live streaming and sales of virtual gifts. As a result,
our revenue is affected by our ability to increase user engagement and convert non-paying users into paying users, which in turn depends
on our ability to retain quality broadcasters, innovate attractive content, and offer virtual gifts and other services. If we are not
successful in enhancing our ability to monetize our existing services or developing new approaches to monetization, we may not be able
to maintain or increase our revenues and profits or recover any associated costs. We monitor market developments and may adjust our monetization
strategies accordingly from time to time, which may result in decreases of our overall revenue or revenue contributions from some monetization
channels. In addition, we may in the future introduce new services to diversify our revenue streams, including services with which we
have little or no prior development or operating experience. If these new or enhanced services fail to engage customers or platform partners,
we may fail to generate sufficient revenues to justify our investments, and our business and operating results and financial condition
may suffer as a result.
Our
past growth may not be indicative of our future performance due to our limited operation history with a relatively new business model
in a relatively new market.
We
commenced business operations in 2012 and has experienced growth in the number of active and paying users and total revenue since 2014
(despite a decline in 2018 due to our lowering our revenue sharing percentage for our broadcasters). However, our past growth may not
be indicative of our future performance, as the markets for our live streaming platforms and the related products and services are relatively
new and rapidly developing. We must adapt ourselves to overcome challenges in a constantly evolving new market, especially in terms of
converting non-paying users to paying users, maintaining a stable paying user base and attracting new paying users. Our business plan
relies heavily upon an expanding user base and the resulting increased revenue from live streaming, as well as our ability to explore
other monetization avenues. However, our past experience and performance would not guarantee any future success if we are not able to
adapt rapidly to the evolving market.
As
live streaming industry in China is relatively young, there are few proven methods of projecting user demand or available industry standards
on which we can rely. Currently we derive our revenue primarily from sales of virtual gifts on our platforms. Although we intend to expand
our monetization avenue, we cannot assure you that our attempts to monetize our viewers and broadcasters will continue to be successful,
profitable or accepted, and therefore the income potential of our business is difficult to gauge.
Our
growth prospects should be considered in light of the risks and uncertainties that fast-growing early-stage companies with limited operating
histories in evolving industries may encounter, including, among others, risks and uncertainties regarding our ability to:
●
develop new virtual gifts
    that are appealing to users;
●
attract, retain, and cultivate
    quality broadcasters;
●
maintain stable relationships
    with talent agencies; and
●
expand to new geographic
    markets with a suitable environment for the development of live-streaming business.
7
Addressing
these risks and uncertainties will require significant capital expenditures and allocation of valuable management and employee resources.
If we fail to successfully address any of the above risks and uncertainties, the size of our user base, our revenue and operating margin
may decline.
We
mainly compete with other established entertainment live streaming platforms. If we are unable to compete effectively, our business and
operating results may be materially and adversely affected.
Since
running a successful live streaming platform requires capital outlay and a large team of quality broadcasters who remain in short supply
due to the fact that most have signed contracts with existing platforms, there are high entry barriers for the entertainment live streaming
industry. As a result, our major competitors are streaming platforms with an established presence in the industry. We must compete with
these established players for user traffic and quality broadcasters and the competition remains intense.
In
order to remain competitive, we may be required to spend additional resources, which may adversely affect our profitability. We believe
that our ability to compete effectively depends upon many factors both within and beyond our control, including:
●
the popularity, usefulness,
    ease of use, performance and reliability of our services compared to those of our competitors, and our research and development abilities
    compared to our competitors;
●
our ability to timely respond
    to and adapt to industry trends, market development and users' preferences;
●
our brand recognition in
    the market;
●
changes mandated by legislation,
    regulations or government policies, some of which may have a disproportionate effect on us; and
●
acquisitions or consolidation
    within the industry, which may result in more formidable competitors.
Furthermore,
if we involved in disputes with any of our competitors that result in negative publicity to us, such disputes, regardless of their veracity
or outcome, may harm our reputation or brand image and in turn lead to reduced number of viewers and broadcasters. Our competitors may
unilaterally decide to adopt a wide range of measures targeted at us, including approaching our top broadcasters or attacking our platforms.
Any legal proceedings or measures we take in response to competition and disputes with our competitors may be expensive, time-consuming,
and disruptive to our operations and divert our management's attention.
If
we fail to compete effectively against other entertainment medium, our results of operations and financial condition may be materially
and adversely affected.
Our
users have a vast array of entertainment choices. Other forms of entertainment, such as traditional PC and console games, online video
services, social media, as well as more traditional mediums such as television, movies, and sports events, are much more well-established
in mature markets and may be perceived by users to offer greater variety, affordability, interactivity, and enjoyment. Our platforms
compete against these other forms of entertainment for discretionary time and spending of our users. If we are unable to sustain sufficient
interest of users in our platforms in comparison to other forms of entertainment, including new forms of entertainment that may emerge
in the future, our business model may no longer be viable.
We
may fail to expand our business into overseas markets successfully.
Our
business objective includes expanding our business into overseas markets in Southeast Asia, the Middle East and South America. As we
continue to expand our international footprint, it will be increasingly susceptible to the risks associated with international operations.
We have a limited operating history outside of China and the ability to manage our international operations successfully requires significant
resources and management attention and is subject to particular challenges of supporting a rapidly growing business in an environment
of diverse cultures, languages, customs, legal systems, alternative dispute systems and economic, political and regulatory systems. In
addition, we expect to incur significant costs associated with expanding our international operations, including hiring personnel internationally.
The risks and challenges associated with doing business internationally and our international expansion include:
●
uncertain political and
    economic climates;
●
lack of familiarity and
    burdens of complying with foreign laws, accounting and legal standards, regulatory requirements, tariffs and other barriers;
8
●
unexpected changes in regulatory
    requirements, taxes, tariffs, export quotas, custom duties or other trade restrictions;
●
lack of experience in connection
    with the localization of our applications, including translation into foreign languages and adaptation for local practices, and associated
    expenses and regulatory requirements;
●
difficulties in adapting
    to differing technology standards;
●
difficulties in managing
    and staffing international operations, including differing legal and cultural expectations for employee relationships and increased
    travel, infrastructure and legal compliance costs associated with international operations;
●
fluctuations in exchange
    rates that may increase the volatility of our foreign-based revenue and expenses;
●
potentially adverse tax
    consequences, including the complexities of foreign value-added tax, goods and services tax and other transactional taxes;
●
difficulties in managing
    and adapting to differing cultures and customs;
●
data privacy laws which
    require that customer data be stored and processed in a designated territory subject to laws different than China;
●
new and different sources
    of competition as well as laws and business practices favoring local competitors and local employees;
●
increased financial accounting
    and reporting burdens and complexities; and
●
restrictions on the repatriation
    of earnings.
Our
business depends on a strong brand, and any failure to maintain, protect, and enhance our brand would hurt our ability to retain or expand
our user base, or our ability to increase their level of engagement.
We
operate six platforms under the brands "Showself" (秀色直播),"Lehai"(乐嗨)
and "Haixiu" (嗨秀), BeeLive Chinese ("MiFeng" 蜜疯直播), BeeLive International
and Hongle.tv("Hongle"红人直播). Our business and financial performance is highly dependent on the
strength and the market perception of our brands and services. A well-recognized brand is critical to increasing our user base and, in
turn, facilitating our efforts to monetize our services and enhancing our attractiveness to users. From time to time, we conduct marketing
activities across various media to enhance our brand image and to guide public perception of our brands and services. In order to create
and maintain brand awareness and brand loyalty, to influence public perception and to retain existing and attract new mobile users, customers
and platform partners, we may need to substantially increase our marketing expenditures. Since we operate in a highly competitive market,
brand maintenance and enhancement directly affect our ability to maintain our market position. In addition, we must exercise strict quality
control of our platforms to ensure that our brand image is not tarnished by substandard products or services. Any misuse of our platforms
and any governmental adverse actions against our platforms may harm our brand and reputation.
We
must also find ways to distinguish our platforms from those of our competitors. If for any reason we are unable to maintain and enhance
our brand recognition, or if we incur excessive expenses in this effort, our business, results of operations, and prospects may be materially
and adversely affected.
9
Our
core values of focusing on user experience and user satisfaction first and acting for the long-term may conflict with the short-term
operating results of our business.
At
this time we are mainly focusing on user experience and satisfaction, which we believe is essential to our success and serves the best,
long-term interests of our company and our shareholders. We may adopt strategies that we think will benefit our users, even if such strategies
may negatively impact our operating results in the short-term. We believe that a high quality user experience on our platforms helps
us expand and maintain our current user base and create better monetizing potential in the long-term.
If
we fail to obtain or maintain the required licenses and approvals or if we fail to comply with laws and regulations applicable to our
industry, our business, results of operations, and financial condition may be materially and adversely affected.
In
order to conduct and develop business in China, we have obtained the following valid licenses through our PRC variable interest entities:
ICP License for provision of Internet information services, Internet Culture Operation License for online performance and music, entertainment
and game product provision, Commercial Performance License for providing streamer agency services and License for producing radio and
television program.
However,
the Internet industry is highly regulated in China. Due to the uncertainties of interpretation and implementation of existing and future
laws and regulations, the licenses we currently hold may be deemed insufficient by governmental authorities. In addition, as all licenses
are subject to periodic renewal, even though we have successfully renewed such licenses in the past, there is no guarantee that we will
be able to continue to do so in the future. These uncertainties may in the future restrain our ability to expand our business scope and
may subject us to fines or other regulatory actions by relevant regulators if our practice is deemed as violating relevant laws and regulations.
As we develop and expand our business scope, we may need to obtain additional qualifications, permits, approvals, or licenses. Moreover,
we may be required to obtain additional licenses or approvals if the PRC government adopts more stringent policies or regulations for
our industry. If we fail to obtain, hold, or maintain any of the required licenses or permits or fail to make the necessary filings on
time or at all, we may be subject to various penalties, such as confiscation of the net revenues that have been generated through the
deemed unlicensed activities, the imposition of fines, and the discontinuation or restriction of our operations. Any such penalties may
disrupt our operations and materially and adversely affect our results of operations and financial condition.
We
may be subject to intellectual property infringement claims or other allegations by third parties for information or content displayed
on, retrieved from or linked to our platforms, or distributed to our users, or for proprietary information appropriated by former employees,
which may materially and adversely affect our business, financial condition and prospects.
Companies
in the Internet, technology, and media industries are frequently involved in intellectual property infringement litigation. In China,
the validity, enforceability, and scope of protection of intellectual property rights in Internet-related industries, especially in the
evolving live streaming industry, are uncertain. We have been and may in the future be subject to intellectual property infringement
claims or other allegations by third parties for information or content displayed on, retrieved from or linked to, recorded, stored or
make accessible on our platforms, or otherwise distributed to our users, including in connection with the music, movies, video and games
played, recorded or make accessible on our platforms during streaming. For example, we face, from time to time, allegations that we have
featured pirated or illegally downloaded music and movies on our platforms, and that we have infringed on the trademarks and copyrights
of third parties, including our competitors, or allegations that we are involved in unfair trade practices. As we face increasing competition
and as litigation becomes a more common method for resolving commercial disputes in China, we face a higher risk of being the subject
of intellectual property infringement claims or other legal proceedings.
We
permit broadcasters to upload text and graphics to our platforms and permit our users to share them. Our platforms also permit broadcasters
or users to choose their username and profile photo. Under relevant PRC laws and regulations, online service providers, which provide
storage space for users to upload content or links to other services or content, could be held liable for copyright infringement under
various circumstances, including situations where the online service provider knows or should reasonably have known that the relevant
content uploaded or linked to on our platforms infringes upon the copyright of others and the online service provider failed to take
necessary actions to prevent such infringement.
10
We
have implemented internal control measures to ensure that the design of our platforms and the content that is streamed on our platforms
does not infringe on valid intellectual properties, such as patents and copyrights held by third parties. We also license certain intellectual
properties from third parties to implement certain functions available on our platforms.
Some
of our employees were previously employed at other competing companies, including our current and potential competitors. To the extent
that these employees are involved in the development of content or technology similar to ours at their former employers, we may become
subject to claims that such employees or we may have appropriated proprietary information or intellectual properties of the former employers
of our employees. If we fail to successfully defend such claims, our results of operations may be materially and adversely affected.
Defending
claims is costly and can impose a significant burden on our management and employees, and there can be no assurances that favorable final
outcomes will be obtained in all cases. Such claims, even if they do not result in liability, may harm our reputation. Any resulting
liability or expenses, or changes required to our platforms to reduce the risk of future liability, may have a material adverse effect
on our business, financial condition and prospects.
Unauthorized
use of our intellectual property and the expenses incurred in protecting our intellectual property rights may materially and adversely
affect our business.
We
consider our copyrights, trademarks, and other intellectual properties to be critical to our success, and rely on a combination of trademark
and copyright laws, trade secrets protection, restrictions on disclosure and other agreements that restrict the use of our intellectual
property to protect these rights. Although we enter into confidentiality agreements and intellectual property ownership agreements with
our employees, these confidentiality agreements could be breached and we might not have adequate remedies for any breach. As a result,
our proprietary technology, know-how or other intellectual property could otherwise become known to third parties. In addition, third
parties may independently discover trade secrets and proprietary information, limiting our ability to assert any trade secret rights
against such parties.
The
measures we use to protect our proprietary rights may not be adequate to prevent the infringement or misappropriation of our intellectual
property. In addition, we cannot assure you that any of our trademark applications will ultimately proceed to registration or will result
in registration with adequate scope for our business. Some of our pending applications or registrations may be successfully challenged
or invalidated by others. If our trademark applications are not successful, we may have to use different marks for affected products
or services, or seek to enter into arrangements with any third parties who may have prior registrations, applications, or rights, which
might not be available on commercially reasonable terms, if at all.
Enforcement
of intellectual property laws in China has historically been lacking, primarily because of ambiguities in the laws and difficulties in
enforcement. Accordingly, intellectual property rights protection in China may not be as effective as in other jurisdictions with a more
developed legal framework regulating intellectual property rights. Policing unauthorized use of our proprietary technology, trademarks,
and other intellectual property is difficult and expensive, and litigation may be necessary in the future to enforce our intellectual
property rights. Future litigation could result in substantial costs and diversion of our resources, and could disrupt our business,
as well as materially adversely affect our results of operations and financial condition.
Some
of our products and services contain open source software, which may pose a particular risk to our proprietary software, products, and
services in a manner that negatively affects our business.
We
use open source software in some of our products and services and will continue to use open source software in the future. There is a
risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability
to provide or distribute our products or services. Additionally, we may face claims from third parties claiming ownership of, or demanding
release of, the open source software or derivative works that we have developed using such software. These claims could result in litigation
and could require us to make our software source code freely available, purchase a costly license, or cease offering the implicated products
or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional
research and development resources, and we may not be able to complete it successfully.
11
Furthermore,
because any software source code we contribute to open source projects is publicly available, our ability to protect our intellectual
property rights with respect to such software source code may be limited or lost entirely. As a result, we may be unable to prevent our
competitors or others from using such software source code contributed by us.
Our
content monitoring system may not be effective in preventing misconduct by our users and misuse of our platforms.
We
operate entertainment live streaming platforms that provide real-time streaming and interactions. Because we do not have full control
over how and what broadcasters or viewers will use our platforms to communicate, our platforms may be misused by individuals or groups
of individuals to engage in immoral, disrespectful, fraudulent or illegal activities. We have implemented control procedures to detect
and block illegal or inappropriate content and illegal or fraudulent activities conducted through the misuse of our platforms, but such
procedures may not prevent all such content from being broadcasted or posted or activities from being carried out. Moreover, real time
streaming renders it harder for us to filter illegal or inappropriate speeches, conduct, and behavior from our platforms prior to airing.
As a result, we may face civil lawsuits or other actions initiated by the affected viewer, or governmental or regulatory actions against
us. In response to allegations of illegal or inappropriate activities conducted through our platforms, PRC government authorities may
intervene and hold us liable for non-compliance with PRC laws and regulations concerning the dissemination of information on the Internet
and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some of the features and
services provided on our websites and mobile applications, or even revoke our licenses or permits to provide Internet content services.
We endeavor to ensure all broadcasters are in compliance with relevant regulations, but we cannot guarantee that all broadcasters will
comply with all PRC laws and regulations. Therefore, our live streaming service may be subject to investigations or subsequent penalties
if content displayed on our platforms is deemed to be illegal or inappropriate under PRC laws and regulations.
As
of the date of this annual report, our platform "Showself" (秀色直播) has, since our operation commencement
in 2014, received 7 administrative penalties from Beijing Cultural Market Administrative Enforcement Department, all of which are minor
penalties of fine, for the inappropriate conducts of broadcasters. The other 2 platforms of our, "Haixiu" (嗨秀秀场)
and "Lehai" (乐嗨秀场), each received 2 administrative penalties, respectively, from the same Department
for the same reason. Beelive Chinese version ("Mifeng" 蜜疯直播) received 2 administrative penalty
from Beijing Cultural Market Administrative Enforcement Department and 1 administrative penalty from Beijing Haidian Security Bureau.
Hongle.tv ("Hongle" 红人直播) received 2 administrative penalties from Beijing Cultural Market Administrative
Enforcement Department and 1 administrative penalty from Beijing Municipal Tax Bureau. All above mentioned defects have been timely remedied
by the platforms and all remedial measures have been reported to the Department for its review and approval.
We
may be held liable for information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if
such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us.
Our
users are able to exchange information, generate content and engage in various other online activities on our live streaming platforms.
We require our broadcasters and users to agree to our terms of use upon account registration. The terms of use set out types of content
strictly prohibited on our platforms. However, signing the terms of use does not guarantee the broadcasters and users will comply with
these terms.
In
addition, because a majority of the video and audio communications on our platforms is conducted in real time, the content generated
by our broadcasters and users on air cannot be filtered before they are streamed on our platforms. Therefore, users may engage in illegal
conversations or activities, including the publishing of inappropriate or illegal content on our platforms that may be unlawful under
PRC laws and regulations.
Although
we have also developed a robust content monitoring system and use our best efforts to monitor content on our platforms, we cannot detect
every incident of inappropriate content on our platforms due to the immense quantity of user-generated content. As such, government authorities
may hold us liable for inappropriate or illegal content on our platforms and may subject us to fines or other disciplinary actions, including
in serious cases suspension or revocation of the licenses necessary to operate our platforms, if we are deemed to have facilitated the
appearance of inappropriate content placed by third parties on our platforms under PRC laws and regulations.
Application
stores may temporarily take down our applications if the content was deemed to violate relevant PRC laws or regulations.
12
Meanwhile,
we may face claims for defamation, libel, negligence, copyright, patent or trademark infringement, other unlawful activities or other
theories and claims based on the nature and content of the information delivered on or otherwise accessed through our platforms. Defending
any such actions could be costly and require significant time and attention of the management and other resources, which would materially
and adversely affect our business.
The
complexity, uncertainties, and changes in PRC regulation of the Internet industry and companies may materially and adversely affect our
business and financial condition.
The
Internet industry is highly regulated in China, including foreign ownership of, and the licensing and permit requirements pertaining
to, companies in the Internet industry. These Internet-related laws and regulations are relatively new and evolving, and their interpretation
and enforcement involve significant uncertainty. As a result, sometimes it may be difficult to evaluate the legal risks involved in certain
actions or omissions. Issues, risks, and uncertainties relating to PRC regulation of the Internet business include, but are not limited
to, the following:
●
There
    are uncertainties relating to the regulation of the Internet business in China, including evolving licensing practices and the requirement
    for real-name registrations. Permits, licenses, or operations at some of our subsidiaries and PRC variable interest entity levels
    may be subject to challenge. We may not be able to timely obtain or maintain all the required licenses or approvals, permits, or
    to complete filing, registration or other formalities necessary for our present or future operations, and we may not be able to renew
    certain permits or licenses or renew certain filing or registration or other formalities. In addition, although we are not currently
    required by PRC law to ask all users for their real name and personal information when they register for a user account, PRC regulators
    could require us to implement compulsory real-name registration for all users on our platforms in the future. In late 2011, for example,
    the Beijing municipal government required micro bloggers in China to implement real-name registration for all of their registered
    users. If we are required to implement real-name registration for users on our platforms, we may lose a large number of registered
    user accounts for various reasons, including, for example, because users may not be able to maintain multiple accounts and some users
    may dislike giving out their private information.
●
New
    regulatory agencies may be established under the evolving PRC regulatory system for the Internet industry. Such new agencies may
    issue new policies or new interpretations of existing laws and regulations. We are unable to determine what policies may be issued
    by any such new agencies in the future or how existing laws, regulations, and policies will be interpreted by such new agencies.
●
New
    laws, regulations or policies may be promulgated or announced that will regulate Internet activities, including online video and
    online advertising businesses. If these new laws, regulations, or policies are promulgated, additional licenses may be required for
    our operations.
●
The
    interpretation and application of existing PRC laws, regulations, and policies and possible new laws, regulations, or policies relating
    to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments
    in, and the businesses and activities of, Internet businesses in China. There are also risks that we may be found to violate the
    existing or future laws and regulations given the uncertainty and complexity of China's regulation of Internet business.
Increases
in the costs of content on our platforms may have an adverse effect on our business, results of operations, and financial condition.
To
maintain and increase user base and user paying ratio, we must continue offering attractive and engaging content on our platforms. We
provide such content mainly through our broadcasters. In order to attract and retain top broadcasters, we need to have an attractive
revenue sharing policy and provide marketing resources to support them. If competitor platforms offer higher compensation, our costs
to retain our broadcasters may increase. As our business and user base further expand, we also need to continue updating and producing
content and activities to meet the more diversified interest of a larger user group. We also need to innovate the content on our platforms
to capture and follow the market trends, resulting in higher costs of the contents on our platforms. If we are not able to continue to
retain our broadcasters and produce high quality content on our platforms at commercially acceptable costs, our business, financial condition,
and results of operations would be adversely impacted.
13
Our
failure to anticipate or successfully implement new technologies could render our proprietary technologies or platforms unattractive
or obsolete, and reduce our revenues and market share.
Our
technological capabilities and infrastructure underlying our live streaming platforms are critical to our success. The Internet industry
is subject to rapid technological changes and innovation. We need to anticipate the emergence of new technologies and assess their market
acceptance. We also need to invest significant resources, including financial resources, in research and development to keep pace with
technological advances in order to make our development capabilities, our platforms and our services competitive in the market. However,
development activities are inherently uncertain, and we might encounter practical difficulties in commercializing our development results.
Our significant expenditures on research and development may not generate corresponding benefits. Given the fast pace with which the
Internet technology has been and will continue to be developed, we may not be able to timely upgrade our streaming technology, our engines
or the software framework for our platforms' development in an efficient and cost-effective manner, or at all. New technologies
in programming or operations could render our technologies, our platforms or products or services that we are developing or expect to
develop in the future obsolete or unattractive, thereby limiting our ability to recover related product development costs, outsourcing
costs and licensing fees, which could result in a decline in our revenues and market share.
The
proper functioning of our platforms is essential to our business. Any disruption to our IT systems could materially affect our ability
to maintain the satisfactory performance of our platforms.
Disruptive
and malfunctioned platforms will drive away frustrated users of ours and reduce our user base. Smooth and proper functioning of our platforms
relies on our IT systems. However, our technology or infrastructure may not function properly at all times. Any system interruptions
caused by telecommunications failures, computer viruses, hacking or other attempts to harm our systems could result in the unavailability
or slowdown of our platforms and limit the attractiveness of content provided on our platforms. Our servers may also be vulnerable to
computer viruses, physical or electronic break-ins and similar disruptions, which could lead to system interruptions, website or mobile
app slowdown or unavailability or loss of data. Any of such occurrences could cause severe disruption to our daily operations. As a result,
our business and results of operations may be materially and adversely affected and our market share could decline.
Any
compromise to the cyber security of our platforms could materially and adversely affect our business, reputation, and results of operations.
On
November 7, 2016, the Standing Committee of the National People's Congress released the PRC Cyber Security Law, which took effect
on June 1, 2017. The PRC Cyber Security Law requires network operators to fulfill certain obligations to safeguard security in the cyberspace
and enhance network information management.
Our
products and services are generally provided through the Internet and involve the storage and transmission of users' information.
Any security breach would expose us to a risk of loss of information and result in litigation and potential liability. As the techniques
used to obtain unauthorized access, disable or degrade Internet services or sabotage operating systems change frequently and often are
not recognized until launched against a target, we may not be able to anticipate such techniques or implement adequate preventative measures.
Upon a security breach, our technical team will be notified immediately and coordinate with the local support staff to diagnose and solve
the technical problems. As of the date of this annual report, we have not experienced any material incidents of security breach.
Despite
the security measures we have implemented, our facilities, systems, procedures, and those of our third-party providers, may be vulnerable
to security breaches, act of vandalism, software viruses, misplaced or lost data, programming or human errors or other similar events
which may disrupt our delivery of services or expose the confidential information of our users and others. If an actual or perceived
breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed, and we may lose current
and potential users and be exposed to legal and financial risks, including legal claims, regulatory fines and penalties, which in turn
could adversely affect our business, reputation, and results of operations.
14
Concerns
about the collection, use, and disclosure of personal data and other privacy-related and security matters could deter customers and users
from using our services and adversely affect our reputation and business.
Concerns
about our practices with regard to the collection, use, or disclosure of personal information or other privacy-related and security matters,
even if unfounded, could damage our reputation and operations. The PRC Constitution, the PRC Criminal Law, the General Principles of
the PRC Civil Law and the PRC Cyber Security Law protect individual privacy in general, which require certain authorization or consent
from Internet users prior to collection, use, or disclosure of their personal data and also protection of the security of the personal
data of such users. In particular, Amendment 7 to the PRC Criminal Law prohibits institutions, companies, and their employees in the
telecommunications and other industries from selling or otherwise illegally disclosing a citizen's personal information obtained
during the course of performing duties or providing services. Our internal policy requires our employees to protect the personal data
of our users, and employees who violate such policy are subject to disciplinary actions, including dismissal. While we strive to comply
with all applicable data protection laws and regulations, as well as our own privacy policies, any failure or perceived failure to comply
may result in proceedings or actions against us by government entities or private individuals, which could have an adverse effect on
our business. Moreover, failure or perceived failure to comply with applicable laws and regulations related to the collection, use, or
sharing of personal information or other privacy-related and security matters could result in a loss of confidence in us by customers
and users, which could adversely affect our business, results of operations and financial condition.
Our
operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China, which may experience
unexpected system failure, interruption, inadequacy, or security breaches.
Almost
all access to the Internet in China is maintained through state-owned telecommunication operators under the administrative control and
regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. Moreover, we primarily rely on a limited
number of telecommunication service providers to provide us with data communications capacity through local telecommunications lines
and Internet data centers to host our servers. We have limited access to alternative networks or services in the event of disruptions,
failures or other problems with China's Internet infrastructure or the fixed telecommunications networks provided by telecommunication
service providers. Web traffic in China has experienced significant growth during the past few years. Effective bandwidth and server
storage at Internet data centers in large cities such as Beijing are scarce. With the expansion of our business, we may be required to
upgrade our technology and infrastructure to keep up with the increasing traffic on our platforms. We cannot assure you that the Internet
infrastructure and the fixed telecommunications networks in China can support the demands associated with the continued growth in Internet
usage. If we cannot increase our capacity to deliver our online services, we may not be able to satisfy the increases in traffic we anticipate
from our expanding user base, and the adoption of our services may be hindered, which could adversely impact our business and profitability.
In
addition, we have no control over the costs of the services provided by telecommunication service providers. If the prices we pay for
telecommunications and Internet services rise significantly, our results of operations may be materially and adversely affected. Furthermore,
if Internet access fees or other charges to Internet users increase, some users may be prevented from accessing the mobile Internet and
thus cause the growth of mobile Internet users to decelerate. Such deceleration may adversely affect our ability to continue to expand
our user base.
We
use third-party services and technologies in connection with our business, and any disruption to the provision of these services and
technologies to us could result in adverse publicity and a slowdown in the growth of our users, which could materially and adversely
affect our business, results of operations, and financial condition.
Our
business depends upon services and software provided by third parties. For example, our user data is encrypted and saved on the storage
cloud provided by a third-party cloud services company. We are relying on the security measures of such third party cloud services company
for data protection, and our disaster recovery system to minimize the possibility of data loss or breach ability. If such third-party
cloud services company has a system disruption and is not able to recover quickly, our business and operations may be adversely affected.
Our
overall network relies on broadband connections provided by third-party operators and we expect this dependence on third parties to continue.
The networks maintained and services provided by such third parties are vulnerable to damage or interruption, which could impact our
results of operations. See "—Our operations depend on the performance of the Internet infrastructure and fixed telecommunications
networks in China, which may experience unexpected system failure, interruption, inadequacy or security breaches."
15
We
also sell a significant portion of our products and services through third-party online payment systems. If any of these third-party
online payment systems suffers security breaches, users may lose confidence in such payment systems and refrain from purchasing our virtual
gifts online, in which case our results of operations would be negatively impacted.
We
exercise no control over the third parties with whom we have business arrangements. For some of services and technologies such as online
payment systems, we rely on a limited number of third-party providers with limited access to alternative networks or services in the
event of disruptions, failures, or other problems. If such third parties increase their prices, fail to provide their services effectively,
terminate their service or agreements, or discontinue their relationships with us, we could suffer service interruptions, reduced revenues
or increased costs, any of which may have a material adverse effect on our business, results of operations, and financial condition.
User
growth and engagement depend upon effective interoperation with operating systems, networks, mobile devices, and standards that we do
not control.
We
offer access to our platforms across a variety of PC and mobile operating systems and devices. We are dependent on the interoperability
of our services with popular mobile devices and mobile operating systems that we do not control, such as Windows, Android, and iOS. Any
such operating systems or devices that decide to degrade the functionality of our services or give preferential treatment to competitive
services could adversely affect usage of our services. In order to deliver high quality services, it is important that our services work
well across a range of mobile operating systems, networks, mobile devices, and standards that we do not control. We may not be successful
in developing relationships with key participants in the mobile industry or in developing services that operate effectively with these
operating systems, networks, devices and standards. Any difficulties for users and broadcasters in accessing and using our platforms
would harm our user growth and user engagement and in turn would adversely affect our results of operations and financial condition.
We
rely on our mobile application and PC application to provide services to our users and broadcasters which, if inaccessible, may have
material adverse impact on our business and results of operations.
We
rely on third-party mobile application and PC application distribution channels such as Apple's App Store, various Android application
stores, and websites to distribute our applications to users and broadcasters. We expect a substantial number of downloads of our mobile
applications and PC applications will continue to be derived from these distribution channels. The promotion, distribution, and operation
of our applications are subject to such distribution platforms' standard terms and policies for application developers, and such
distribution channels have discretion to determine whether we comply with their terms and policies. If any of such distribution channels
determines to take down our applications or terminate the relationship with us, our business, results of operations, and financial condition
may be materially and adversely affected.
Continuing
efforts of our executive officers, key employees, and qualified personnel are essential to our business and the loss of their services
may adversely and negatively impact our business and results of operations.
Our
future success depends substantially on the continued efforts of our executive officers and key employees. If one or more of our executive
officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in
a timely manner, or at all. Since live streaming industry is characterized by high demand and intense competition for talent, we cannot
assure you that we will be able to attract or retain qualified staffs or other highly skilled employees. In addition, as we are relatively
young, our ability to train and integrate new employees into our operations may not meet the growing demands of our business, which may
materially and adversely affect our ability to grow our business and hence our results of operations.
If
any of our executive officers or key employees joins a competitor or forms a competing company, we may lose users, know-how and key professionals
and staff members. Each of our executive officers and key employees has entered into an employment agreement and a non-compete agreement
with us. However, certain provisions under the non-compete agreement may be deemed invalid or unenforceable under PRC law. If any dispute
arises between our executive officers and key employees and us, we cannot assure you that we would be able to enforce these non-compete
agreements in China, where these executive officers reside, in light of uncertainties with China's legal system.
16
We
are subject to risks relating to litigation.
We
have been involved in and may be subject to litigation and claims of various types, including litigation alleging infringement of intellectual
property rights and unfair competition, claims and disputes involving broadcasters, customers, our employees and suppliers. Litigation
is expensive, subjects us to the risk of significant damages, requires significant management time and attention and could have a material
and adverse effect on our business, results of operations, and financial condition.
We
may be the subject of allegations, harassing, or other detrimental conduct by third parties, which could harm our reputation and cause
it to lose market share, users, and customers.
We
have been subject to allegations by third parties, negative Internet postings and other adverse public exposure on our business, operations
and staff compensation. We may also become the target of harassment or other detrimental conduct by third parties or disgruntled former
or current employees. Such conduct may include complaints, anonymous or otherwise, to regulatory agencies, media or other organizations.
We may be subject to government or regulatory investigation or other proceedings as a result of such third-party conduct and may be required
to spend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that we will be
able to conclusively refute each of the allegations within a reasonable period of time or at a commercially reasonable cost, or at all.
Additionally, allegations, directly or indirectly against us, may be posted on the Internet, including social media platforms by anyone,
whether or not related to us, on an anonymous basis. Any negative publicity on us or our management can be quickly and widely disseminated.
Social media platforms and devices immediately publish the content of their subscribers and participants post, often without filters
or checks on the accuracy of the content posted. Information posted may be inaccurate and adverse to us, and it may harm our reputation,
business or prospects. The harm may be immediate without affording us an opportunity for redress or correction. Our reputation may be
negatively affected as a result of the public dissemination of negative and potentially false information about our business and operations,
which in turn may cause us to lose market share, users or customers.
The
appointed Temporary Receiver of Link Motion Inc. (f/k/a NQ Mobile Inc.) may bring an action to restore Link Motion Inc.'s senior
position in the Showself businesses, which may result in claims against us.
On
December 13, 2018, a shareholder plaintiff filed a derivative lawsuit on behalf of, and against Link Motion Inc. ("LKM")
and three individual defendants, including the chairman of the board of directors of LKM, in the United States District Court for Southern
District of New York. In this lawsuit, the shareholder plaintiff alleged certain wrongdoing by the individual defendants in connection
with the sales of LKM's corporation assets, including the sale of a 65% equity interest in the Showself businesses (currently is
conducted via Zhihui Qiyuan) to Tongfang Investment Fund Series SPC ("TF") pursuant to a share purchase agreement dated as
of March 30, 2017. On February 1, 2019, the court issued a Preliminary Injunction Order which preliminarily enjoins the defendants to
take corrective action as necessary to restore LKM's senior position in the underlying assets of the Showself businesses and appointed
a temporary receiver for LKM during the pendency of this action. The temporary receiver has certain statutory powers and specified delineated
powers, including but not limited to, commence, continue and/or control any action on behalf of LKM in the U.S., the PRC, or elsewhere.
It is possible that we could be sued in connection with these ongoing proceedings, which could be costly to defend, and a judgment against
us could result in significant damages. As of the date of this annual report and to our knowledge, the temporary receiver has yet brought
any claims in any jurisdiction to restore LKM's 65% equity interest in the Showself businesses. However we cannot guarantee that
such claims will not be brought in the future.
Negative
publicity may materially and adversely affect our brand, reputation, business, and growth prospects.
Negative
publicity involving us, our broadcasters, our users, our management, our live streaming platforms, or our business model may materially
and adversely harm our brand and our business. We cannot assure you that we will be able to defuse negative publicity about us, our management
and/or our services to the satisfaction of our investors, users and broadcasters, customers and platform partners. There has been negative
publicity about us and the misuse of our services, which has adversely affected our brand, public image, and reputation. Such negative
publicity, especially when it is directly addressed against us, may also require us to engage in defensive media campaigns. This may
cause us to increase our marketing expenses and divert our management's attention and may adversely impact our business and results
of operations.
17
Contractual
disputes with our talent agencies may harm our reputation, and may be costly or time-consuming to resolve.
We
enter into contractual arrangements with talent agencies. Pursuant to these contracts, talent agencies are responsible for recruiting
and training broadcasters and providing content for our platforms. We share with the talent agencies a certain percentage of the revenue
generated by the broadcasters they manage. Talent agencies will in turn enter into compensation arrangement with the broadcasters they
manage. From time to time, there may be contractual disputes between broadcasters and talent agencies, and/or between talent agencies
and us. Any such disputes may not only be costly and time-consuming to solve, but may also be detrimental to the quality of the content
produced by the broadcasters, or even causing broadcasters to leave our platforms.
We
enter into exclusivity agreements with certain of our top broadcasters, pursuant to which such top broadcasters agree not to work for
other live streaming platforms in exchange for additional support and resources from us. Although these top broadcasters are required
to pay a certain amount of fees if they breach the exclusivity agreements, we cannot guarantee that such exclusivity agreements will
be an effective measure to deter these top broadcasters from leaving our platforms.
Key
performance metrics used by us, such as QAUs, paying users, ARPPU and paying ratio, may overstate the number of our active and paying
users, which may lead to an inaccurate interpretation of our revenue metrics and our business operations by our management and by investors,
and may even misleadingly affect management's business judgment of our operations.
For
performance tracking purposes, we monitor metrics such as the number of registered user accounts, active users, and paying users. We
calculate certain operating metrics in the following ways: (a) the number of registered users, which refers to the number of users that
has registered and logged onto our platforms at least once since registration; (b) the number of active users, which refers to the number
of users that has visited our platforms through PC or mobile app at least once in a given period; (c) the number of paying users, which
refers to the number of users that has purchased virtual currencies on our platforms at least once in a given period. The actual number
of individual users, however, is likely to be lower than that of registered users, active users, and paying users potentially significantly,
due to various reasons such as fraudulent representation or improper registration. Some of the user accounts may also be created for
specific purposes such as to increase virtual gifting for certain performers in various contests, but the number of registered users,
active users, and paying users do not exclude user accounts created for such purposes. We have limited ability to validate or confirm
the accuracy of information provided during the user registration process to ascertain whether a new user account created was actually
created by an existing user who is registering duplicative accounts. The respective number of our registered users, active users, and
paying users may overstate the number of individuals who register on our platforms, sign onto our platforms, purchase virtual gifts or
other products and services on our platforms, which may lead to an inaccurate interpretation of our operating metrics. Additionally,
a user needs to register a separate account for each our platform to access such platform. When calculating our total numbers of QAUS
as a whole, a user with multiple accounts with us may be counted more than once and such numbers may be higher than the actual numbers
of users. Additionally, we are able to measure unique users only to the extent that these users are registered using the same identification
method. Since we allow a user to register an account on our platforms with the user's mobile number, Wechat account or QQ account,
our ability to identify unique users is limited.
If
the tracked growth in the number of our registered users, active users, and paying users is higher than the actual growth in the number
of individuals registered, active, or paying users, our user engagement level, sales, and business may not grow as quickly as we expect.
In addition, such overstatement may cause inaccurate evaluation of our operations by our management and by investors, which may also
materially and adversely affect our business and results of operations.
The
security of operations of, and fees charged by, third-party online payment platforms may have a material adverse effect on our business
and results of operations.
Currently,
we use third-party online payment platforms, such as China UnionPay, WeChat Pay, and Alipay, to receive a large part of the cash proceeds
from sales of our products and services through direct purchases on our platforms. Any scheduled or unscheduled interruption in the ability
of our users to use these and other online payment platforms could adversely affect our payment collection, and in turn, our revenue.
In addition, in online payment transactions, secure transmission of user information, such as debit and credit card numbers and expiration
dates, personal information and billing addresses, over public networks, is essential to user privacy protection and maintaining their
confidence in our platforms.
18
We
do not have control over the security measures of our third-party payment platforms, and their security measures may not be adequate
at present or may not be adequate with the expected increased usage of online payment platforms. We could be exposed to litigation and
possible liability if online transaction safety of our users is compromised in transactions involving payments for our products and services,
which could harm our reputation and our ability to attract users and may materially adversely affect our business. We also rely on the
stability of such payment transmissions to ensure the continued payment services provided to our users. If any of these third-party online
payment platforms fails to process or ensure the security of users' payments for any reason, our reputation will be damaged and
we may lose our paying users and discourage the potential purchases, which in turn, will materially and adversely affect our business,
financial condition, and prospects.
Our
users may suffer third-party fraud when purchasing our virtual currency and we may suffer fraud when selling virtual currency to users.
We
offer our users multiple options to purchase our virtual currency. Users can purchase these virtual currencies directly on web streaming
portal, or make in-app purchases using third-party payment channels including China Union Pay, WeChat pay, Alipay and Apple's App
Store. Users can also purchase virtual currencies through third-party sales agencies officially authorized by us. Other than the above-mentioned
purchase channels, there are no other means to purchase our virtual currency. However, from time to time, certain third parties fraudulently
claim that they are sales agencies authorized by us and users can purchase our virtual currency through them. If our users choose to
purchase our virtual currency from such unauthorized third parties, they may suffer losses from such fraudulent activities by third parties.
Although we are not directly responsible for the losses in such case, our user experience may be adversely affected and users may choose
to leave our platforms as a result. Such fraudulent activities by third parties might also generate negative publicity, disputes, or
even legal claims. The measures we take in response to such negative publicity, disputes, or legal claims may be expensive, time consuming,
and disruptive to our operations and divert our management's attention.
Additionally,
there is a risk that even our duly authorized third-party sales agencies may fail to deliver virtual currencies to users after users
make payment. In this case, we are responsible to deliver such virtual currencies to users. We may in turn demand payment from the authorized
third-party sale agencies but there is no guarantee that we may recover the full payment.
Restrictions
on virtual currency may adversely affect our revenues.
Due
to the relatively short history of virtual currencies in China, the regulatory framework governing the industry is still under development.
On June 4, 2009, the Ministry of Culture and the Ministry of Commerce jointly issued Notice on the Strengthening of the Administration
of Online Game Virtual Currency (the "Virtual Currency Notice"), which defines what a virtual currency is and requires that
entities obtain the approval from the competent culture administrative department before issuing virtual currency and engaging in transactions
using virtual currencies in connection with online games. The Virtual Currency Notice regulates that virtual currency may only be used
to purchase services and products provided by the online service provider that issues the virtual currency, and also prohibit businesses
that issue online game virtual currency from issuing virtual currency to game players through means other than purchases with legal currency,
and from setting game features that involve the direct payment of cash or virtual currency by players for the chance to win virtual gifts
or virtual currency based on random selection through a lucky draw, wager, or lottery. These restrictions on virtual currency may result
in lower sales of online virtual currency.
Currently,
the PRC government has not promulgated any specific rules, laws, or regulations to directly regulate virtual currencies, except for the
above-mentioned Virtual Currency Notice. Although the term "virtual currency" is widely used in live streaming industry,
we believe that the "virtual currency" used in our live streaming communities does not fall into a "virtual currency"
as defined under the Virtual Currency Notice, and we are not subject to any online game virtual currency laws or regulations for our
live streaming business. We have obtained the approval from the competent culture administrative department for issuing a virtual currency
for online games (which is set forth in the Internet Culture Operation Licenses that we have acquired). So far, we have not issued any
virtual currency for online games as defined under the Virtual Currency Notice. However, due to the uncertainties of the interpretation
and implementation of the law and regulation, we cannot assure you that the PRC regulatory authorities will not take a different view,
in which case we may be required to obtain additional approvals or licenses or change our current business model and may be subject to
fines or other penalties, which could adversely affect our business.
19
Our
results of operations are subject to quarterly fluctuations due to seasonality.
We
experience seasonality in our business, reflecting seasonal fluctuations in Internet usage. For example, the number of active users tends
to be higher during the last quarter of the year while lower near Chinese New Year season. Furthermore, the number of paying users of
our online live streaming platforms correlate with our marketing campaigns and promotional activities, which may coincide with popular
western or Chinese festivals. As a result, comparing our operating results on a period-to-period basis may not be meaningful.
We
do not currently have business insurance to cover our main assets and business. Any uninsured occurrence of business disruption, litigation,
or natural disaster could expose us to significant costs, which could have an adverse effect on our results of operations.
We
currently do not have any business liability or disruption insurance to cover our operations. Any uninsured occurrence of business disruption,
litigation, or natural disaster, or significant damages to our uninsured equipment or facilities could disrupt our business operations,
requiring us to incur substantial costs and divert our resources, which could have an adverse effect on our results of operations and
financial condition.
Failure
to achieve and maintain effective internal and disclosure controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could
have a material adverse effect on our business and share price.
Effective
internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate
successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results
would be harmed. Our management has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the
Exchange Act.
The
requirements of Section 404 of the Sarbanes-Oxley Act are ongoing and also apply to future years. We expect that our internal control
over financial reporting will continue to evolve as we continue in our efforts to transform our business. Although we are committed to
continue to improve our internal control processes and we will continue to diligently and vigorously review our internal control over
financial reporting in order to ensure compliance with the Section 404 requirements, any control system, regardless of how well designed,
operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. In addition, successful
remediation of the control deficiencies identified as of December 31, 2022 is dependent on our ability to hire and retain qualified employees
and consultants. Therefore, we cannot be certain that in the future additional material weakness or significant deficiencies will not
exist or otherwise be discovered. See "
Item 15-Controls and Procedures.
"
We
continue to grant share-based awards in the future, which may result in increased share-based compensation expenses and have an adverse
effect on our future profit. Exercise of the options or restricted shares granted will increase the number of our shares in circulation,
which may adversely affect the market price of our shares.
We
adopted an equity incentive plan on February 8, 2021, or the "
2021 Plan
", for the purpose of providing additional
incentives to employees, directors and consultants and to promote the success of the Company's business. The maximum aggregate
number of Class A ordinary shares we are authorized to issue pursuant to all awards under the 2021 Share Incentive Plan is 3,000,000
Class A ordinary shares. As of the date of this annual report, total of 2,115,283 restricted share units have been granted under 2021
Pan. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results
of operations. Furthermore, exercise of the awards granted under the 2021 Plan by our employees will increase the number of our shares
in circulation, which may have an adverse impact on our share price.
Non-compliance
on the part of our employees or third parties involved in our business could adversely affect our business.
Our
compliance controls, policies, and procedures may not protect us from acts committed by our employees, agents, contractors, or collaborators
that violate the laws or regulations of the jurisdictions in which we operate, which may adversely affect our business.
In
addition, our business partners or other third parties involved in our business through our business partners (such as contractors, talent
agencies, or other third parties entered into business relationship with our third- party business partners) may be subject to regulatory
penalties or punishments because of their regulatory compliance failures, which may, directly or indirectly, disrupt our business. When
we enter into a business relationship with a third party partner, we cannot be certain whether such third party business partner has
infringed or will infringe any other third parties' legal rights or violate any regulatory requirements or rule out the likelihood
of incurring any liabilities imposed on us due to any regulatory failures by such third party business partner. In addition, for those
third parties actively involved in our business through our business partners, we cannot assure you that our business partners will be
able to supervise and administrate those third parties. The legal liabilities and regulatory actions on our business partners or other
third parties involved in our business may affect our business activities and reputation and in turn, our results of operations.
20
We
may not be able to ensure compliance with United States economic sanctions laws.
The
U.S. Department of the Treasury's Office of Foreign Assets Control, or OFAC, administers laws and regulations that generally prohibit
U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, from conducting activities or transacting
business with certain countries, governments, entities or individuals that are targets of U.S. economic sanctions. We do not and will
not use any of our funds for any activities or business with any country, government, entity, or individual in violation of U.S. economic
sanctions.
While
we believe that we have been, and that we continue to be, in compliance with applicable U.S. economic sanctions, our current safeguards
may fail to prevent broadcasters and users located in countries that are targets of U.S. economic sanctions from accessing our platforms.
Non-compliance with applicable U.S. economic sanctions could subject us to adverse media coverage, investigations, and severe administrative,
civil and possibly criminal sanctions, expenses related to remedial measures, and legal expenses, which could materially adversely affect
our business, results of operations, financial condition and reputation.
Spammers
and malicious software and applications may affect user experience, which could reduce our ability to attract users and materially and
adversely affect our business, results of operations, and financial condition.
Spammers
may use our streaming platforms to send spam messages to users, which may affect user experience. As a result, users may reduce using
our products and services or stop using them altogether. In spamming activities, spammers typically create multiple user accounts for
the purpose of sending a high volume of repetitive messages. Although we attempt to identify and delete accounts created for spamming
purposes, we may not be able to effectively eliminate all spam messages from our platforms in a timely fashion. Any spamming activities
could have a material and adverse effect on our business, results of operations, and financial condition.
In
addition, malicious software and applications may interrupt the operations of our websites, our PC clients or mobile apps and pass on
such malware to our users which could adversely hinder user experience. Although we have been successfully blocking these attacks in
the past, we cannot guarantee that this will always be the case, and in the incident if users experience a malware attack by using our
platforms, users may associate the malware with our websites, our PC clients or mobile apps, and our reputation, business, and results
of operations would be materially and adversely affected.
Our
leased property interests may be defective and our right to lease the properties affected by such defects may be challenged, which could
adversely affect our business.
Under
PRC laws, all lease agreements are required to be registered with local housing authorities. We lease several premises in China. We cannot
assure whether or not all landlords of these premises have registered the relevant lease agreements with the government authorities,
or have completed registration of their ownership rights to the premises. Furthermore, we cannot assure that some of the premises do
not have a defective title. We may be subject to monetary fines due to failure by the landlords to complete the required registrations.
We
may also be forced to relocate our operations if the landlords do not obtain valid title to or complete the required registrations with
local housing authorities in a timely manner or at all. We might not be able to locate desirable alternative sites for our operations
in a timely and cost-effective manner which may adversely affect our business.
Future
strategic alliances or acquisitions may have a material and adverse effect on our business, reputation, and results of operations.
We
may enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further our
business purpose from time to time. These alliances could subject us to a number of risks, including risks associated with sharing proprietary
information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which
may materially and adversely affect our business. We may have limited ability to monitor or control the actions of these third parties
and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to
their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.
21
In
addition, when appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary
to our existing business. In addition to possible shareholders' approval, we may also have to complete filings and obtain approvals
and licenses from relevant government authorities for the acquisitions and to comply with any applicable PRC laws and regulations, including
the filling with CSRC if we issue additional securities for the acquisitions, which could result in increased delay and costs, and may
derail our business strategy if it fails to do so. Furthermore, past and future acquisitions and the subsequent integration of new assets
and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing
business, which in turn could have an adverse effect on our business operations. Acquired assets or businesses may not generate the expected
financial results. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities,
the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential
unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.
COVID-19
pandemic may have an adverse impact on our results of operations and financial condition for the fiscal year 2023.
In
December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts
of the world in the first half of 2020, which has caused significant volatility in the PRC and international markets. After the initial
outbreak of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the
infections caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai
in 2022, and a series of restrictions and quarantines were implemented to contain the spread. Our Beijing and Hangzhou office did not
work at full capacity for approximately two months when these restrictive measures are in force, which negatively affected our operational
and financial results. Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread
of the COVID-19 virus have been revoked or replaced with more flexible measures since December 2022. While the revocation or replacement
of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on our normal operations, the extent of the
impact on our future financial results will be dependent on future developments such as the length and severity of the crisis, the potential
resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the
global economy and capital markets, among many other factors, all of which still remain uncertain and unpredictable. Given this uncertainty,
we are currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity
and results of operations if the current situation continues, and therefore we cannot guarantee that COVID-19 will not adversely impact
our results of operations and financial condition for the fiscal year 2023.
Risk
Factors Relating to Our Corporate Structure
We
conduct our business through the VIEs by means of contractual arrangements. PRC laws and regulations governing our businesses and the
validity of certain of our contractual arrangements are uncertain
.
If the PRC courts or administrative authorities determine that
these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could
be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.
Current
PRC laws and regulations place certain restrictions and conditions on foreign ownership of certain areas of businesses and accordingly
to comply with PRC laws and regulations, we conduct such business activities through the VIEs in China. For more detailed discussions,
see
"--Substantial uncertainties exist with respect to whether the foreign investor's controlling PRC onshore variable
interest entities via contractual arrangements will be recognized as foreign investment and how it may impact the viability of our current
corporate structure and operations."
WXBJ
has entered into contractual arrangements with the Zhihui Qiyuan VIEs and their respective shareholders, and WXZJ has entered into contractual
arrangements with the Siixang Qiyuan VIEs and their respective shareholders. Such contractual arrangements enable us to exercise effective
control over, receive substantially all of the economic benefits of, and have an exclusive option to purchase all or part of the equity
interest and assets in the VIEs when and to the extent permitted by PRC law. We have evaluated the guidance in FASB ASC 810 and concluded
that we are the primary beneficiary of the VIEs because of these contractual arrangements. Accordingly, under U.S. GAAP, the financial
statements of the VIEs are consolidated as part of our financial statements.
However,
Scienjoy Holding Corporation is a British Virgin Islands holding company with no equity ownership in the VIEs and we conduct our operations
in China through (i) our PRC subsidiaries and (ii) the VIEs with which we have maintained contractual arrangements. Investors in our
Class A Ordinary Shares thus are not purchasing equity interest in our consolidated affiliated entities in China but instead are purchasing
equity interest in a British Virgin Islands holding company. If the PRC government deems that our contractual arrangements with the VIEs
do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation
of existing regulations change or are interpreted differently in the future, we and the VIEs could be subject to severe penalties or
be forced to relinquish our interests in those operations. Our holding company in the British Virgin Islands, the VIEs, and investors
of Scienjoy Holding Corporation face uncertainty about potential future actions by the PRC government that could affect the enforceability
of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company
as a group.
On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises,
or the Trial Measures, which will become effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules
No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic
Enterprises and relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC's official
website. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic principles of the Draft Administrative
Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing
by domestic enterprises. The Trial Measures grant the CSRC the authority to regulate the overseas offering and listing of PRC companies
with VIE structures and allow filings by VIE-structured companies insofar as they comply with the relevant regulations. PRC companies
that are already listed on overseas exchanges by or before March 31, 2023 are not required to make any filings with CSRC unless they
raise additional equity financing, in which case CSRC may also consult with certain PRC governmental authorities that regulate the PRC
companies' business operations, or ask the Company to obtain approvals or confirmation from such authorities in advance.
22
There
still remain substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited
to, the laws and regulations governing our and the VIEs' business, or the enforcement and performance of our contractual arrangements
with the VIEs and their shareholders. These laws and regulations may be subject to change, and their official interpretation and enforcement
may involve substantial uncertainty. New laws and regulations that affect existing and proposed future businesses may also be applied
retroactively. Due to the uncertainty and complexity of the regulatory environment, we cannot assure you that we and the VIEs would always
be in full compliance with applicable laws and regulations, the violation of which may have adverse effect on our and the VIEs'
business and our reputation.
Although
we believe we, our PRC subsidiaries and the VIEs are not in violation of current PRC laws and regulations, we cannot assure you that
the PRC government would agree that our contractual arrangements comply with PRC licensing, registration or other regulatory requirements,
with existing policies or with requirements or policies that may be adopted in the future. If the PRC government determines that we or
the VIEs do not comply with applicable law, it could revoke the VIEs' business and operating licenses, require the VIEs to discontinue
or restrict the VIEs' operations, restrict the VIEs' right to collect revenues, block the VIEs' websites, require the
VIEs to restructure our operations, impose additional conditions or requirements with which the VIEs may not be able to comply, impose
restrictions on the VIEs' business operations or on their customers, or take other regulatory or enforcement actions against the
VIEs that could be harmful to their business. Any of these or similar occurrences could significantly disrupt our or the VIEs'
business operations or restrict the VIEs from conducting a substantial portion of their business operations, which could materially and
adversely affect the VIEs' business, financial condition and results of operations. If any of these occurrences results in our
inability to direct the activities of any of the VIEs that most significantly impact its economic performance, and/or our failure to
receive the economic benefits from any of the VIEs, we may not be able to consolidate these entities in our consolidated financial statements
in accordance with U.S. GAAP. In addition, our shares may decline in value or become worthless if we are unable to assert our contractual
control rights over the assets of our PRC subsidiaries that conduct a significant part of our operations.
Substantial
uncertainties exist with respect to whether the foreign investor's controlling PRC onshore variable interest entities via contractual
arrangements will be recognized as "foreign investment" and how it may impact the viability of our current corporate structure
and operations.
On
March 15, 2019, the National People's Congress of the PRC adopted the PRC Foreign Investment Law, which took force on January 1,
2020, and replaced three existing laws regulating foreign investment in China, namely the PRC Equity Joint Venture Law, the PRC Cooperative
Joint Venture Law and Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The PRC
Foreign Investment Law defines the "foreign investment" as the investment activities in China conducted directly or indirectly
by foreign investors in the following manners: (i) the foreign investor, by itself or together with other investors establishes a foreign-invested
enterprise in China; (ii) the foreign investor acquires shares, equities, asset tranches, or similar rights and interests of enterprises
in China; (iii) the foreign investor, by itself or together with other investors, invests and establishes new projects in China; (iv)
the foreign investor invests through other approaches as stipulated by laws, administrative regulations or otherwise regulated by the
State Council. The PRC Foreign Investment Law keeps silent on how to define and regulate the "variable interest entities,"
while adding a catch-all clause that "other approaches as stipulated by laws, administrative regulations or otherwise regulated
by the State Council" can fall into the concept of "foreign investment," which leaves uncertainty as to whether the
foreign investor's controlling PRC onshore variable interest entities via contractual arrangements will be recognized as "foreign
investment." Pursuant to the PRC Foreign Investment Law, PRC governmental authorities will regulate foreign investment by applying
the principle of pre-entry national treatment together with a "negative list," which will be promulgated by or promulgated
with approval by the State Council or its authorized governmental department such as Ministry of Commerce. Foreign investors are prohibited
from making any investments in the industries which are listed as "prohibited" in such negative list; and, after satisfying
certain additional requirements and conditions as set forth in the "negative list," are allowed to make investments in the
industries which are listed as "restricted" in such negative list. For any foreign investor that fails to comply with the
negative list, the competent authorities are entitled to ban its investment activities, require such investor to take measures to correct
its non-compliance and impose other penalties.
The
latest version of the "negative list," namely, the Special Management Measures (Negative List) for the Access of Foreign
Investment (2021), which became effective on January 1, 2022, provides that foreign investment is prohibited in providing the Internet
content service, Internet audio-visual program services and online culture activities that we conduct through our consolidated variable
interest entities. These operations are subject to foreign investment restrictions/prohibitions set forth in the Special Administrative
Measures (Negative List) for the Access of Foreign Investment (2021) issued by the Ministry of Commerce.
The
PRC Foreign Investment Law leaves leeway for future laws, administrative regulations or provisions of the State Council and its departments
to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether our corporate structure will
be seen as violating foreign investment rules as we are currently using the contractual arrangements to operate certain businesses in
which foreign investors are currently prohibited from or restricted to investing. Furthermore, if future laws, administrative regulations
or provisions of the State Council and its departments mandate further actions to be taken by companies with respect to existing contractual
arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. If we fail
to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate
structure, corporate governance and business operations could be materially and adversely affected.
23
We
depend upon the contractual arrangements in conducting our business in China, which may not be as effective as direct ownership in providing
operational control.
We
are a holding company incorporated in the British Virgin Islands. As a holding company with no material operations of our own, we conduct
a substantial majority of our operations through the VIEs in China. We entered into the VIE agreements with Zhihui Qiyuan VIEs on January
29, 2019 and entered into the VIE agreements with Sixiang Qiyuan VIEs on June 1, 2022. We generate most of our revenue from operations
of the VIEs. Our shares (include Class A ordinary shares and Class A Preferred shares) offered in this offering are shares of our offshore
holding company instead of shares of the VIEs or our PRC subsidiaries. we rely on contractual arrangements by and among WXBJ, the Zhihui
Qiyuan VIEs and their shareholders and the contractual arrangements by and among WXZJ, the Sixiang Qiyuan VIEs and their shareholders
for our business operations, and these contractual arrangements may not be as effective as direct ownership in providing us with control
over the VIEs. We rely on the performance by the VIEs and their shareholders of their obligations under the contracts to receive substantially
all of the economic benefits from the VIEs' operations and be the primary beneficiary of the VIEs for accounting purposes. The
shareholders of the VIEs may not act in the best interests of our company or may not perform their obligations under these contracts.
Such risks exist throughout the period in which we intend to operate certain portion of our business through the contractual arrangements
with the VIEs.
Any
failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material
adverse effect on our business. If the VIEs or their shareholders fail to perform their respective obligations under the contractual
arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. We may also have to
rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages. The legal environment
in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal
system could limit our ability, as a British Virgin Islands holding company, to enforce these contractual arrangements and doing so may
be quite costly, and these contractual arrangements have not been tested in a court of law.
The
shareholders of the VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business and
financial condition. The shareholders of the VIEs may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual
arrangements we have with them and the VIEs, which would have a material adverse effect on our ability to effectively control the VIEs
and receive economic benefits from them. If we cannot resolve any conflict of interest or dispute between us and these shareholders,
we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty
as to the outcome of any such legal proceedings.
If
the PRC government deems that the agreements that establish the structure for operating our businesses in China do not comply with PRC
regulations on foreign investment in Internet and other related businesses, or if these regulations or their interpretation change in
the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations, and may need to reorganize
our current corporate structure to comply with PRC laws and regulations. In addition, if SHC issues new securities for future financing,
the Company shall disclose the whole corporate structure including VIEs to CSRC and may be inquired by CSRC about the background of such
structure.
PRC
laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in Internet and other
related businesses (usually defined as "value-added telecommunication business" under relevant PRC authorities), including
the provision of Internet content and online service operations, which fell under the catalogue of negative list published and updated
by PRC Ministry of Commerce from time to time. Specifically, foreign ownership is prohibited in industries of online audio and video
program services and Internet cultural business (excluding music), foreign ownership of an Internet content provider may not exceed 50%,
and the major foreign investor is required to have a record of good performance and operating experience in managing value-added telecommunications
business. We are a company registered in the British Virgin Islands and WXBJ and WXZJ (our indirect wholly-owned subsidiaries in China)
are foreign-invested enterprises (or called "wholly foreign-owned enterprises", the "WFOEs") under PRC laws and
regulations. To comply with PRC laws and regulations, we have to conduct our business in China mainly through WXBJ, WXZJ, Zhihui Qiyuan
VIEs, and Sixiang Qiyuan VIEs and their respective subsidiaries, based on a series of contractual arrangements by and among WXBJ, Zhihui
Qiyuan, and its registered shareholders and a series of contractual arrangements by and among WXZJ, Sixiang Qiyuan, and their respective
subsidiaries. As a result of these contractual arrangements, we exert control over the VIEs (namely, Zhihui Qiyuan VIEs and Sixiang Qiyuan
VIEs) and consolidate their financial results in our financial statements under U.S. GAAP. The VIEs (namely, Zhihui Qiyuan VIEs and Sixiang
Qiyuan VIEs) hold the licenses, approvals, and key assets that are essential for our operations.
24
In
the opinion of our PRC counsel, Beijing Feng Yu Law Firm (北京锋昱律师事务所) ("Feng
Yu Law Firm"), based on its understanding of the relevant PRC laws and regulations, each of the contracts among WXBJ, Zhihui Qiyuan
and its registered shareholders is valid, binding, and enforceable in accordance with its terms, each of the contracts among WXZJ, Sixiang
Qiyuan and its registered shareholders is valid, binding, and enforceable in accordance with its terms. However, we have been further
advised by our PRC counsel that there are substantial uncertainties regarding the interpretation and application of current or future
relevant PRC laws and regulations. Thus, the PRC government may ultimately take a view contrary to the opinion of our PRC counsel. In
addition, PRC government authorities may deem that foreign ownership is directly or indirectly involved in each of the VIEs' shareholding
structure. If the WFOEs and its subsidiaries and the VIEs are found in violation of any PRC laws or regulations, or if the contractual
arrangements among WXBJ, Zhihui Qiyuan and its registered shareholders or the contractual arrangements among WXZJ, Sixiang Qiyuan and
its registered shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant
governmental authorities would have broad discretion in dealing with such violation, including, without limitation:
●
revoking the business licenses
    and/or operating licenses of such entities;
●
levying fines on our related
    PRC companies;
●
confiscating any of our
    income that they deem to be obtained through illegal operations;
●
discontinuing or placing
    restrictions or onerous conditions on our operations conducted by our related PRC companies;
●
placing restrictions on
    our right to collect revenues;
●
shutting down our servers
    or blocking our app/websites;
●
requiring
        us to change our corporate structure and contractual arrangements;
●
rejecting our future offerings
    in the public market;
●
imposing additional conditions
    or requirements with which we may not be able to comply; or
●
taking other regulatory
    or enforcement actions against us that could be harmful to our business.
The
imposition of any of these penalties may result in a material and adverse effect on our ability to conduct our business operations and
future financing. In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of our
consolidated affiliated entities or the right to receive their economic benefits, we would no longer be able to consolidate their financial
results.
We
may lose the ability to use and enjoy assets held by the VIEs that are important to our business if the VIEs declare bankruptcy or become
subject to a dissolution or liquidation proceeding.
The
VIEs hold certain assets that are important to our operations, including the ICP License, SP License, the Internet Culture Operation
Permit, the Commercial Performance License, and Radio and Television Program Production and Operating Permit. Under our contractual arrangements,
the shareholders of the VIEs may not voluntarily liquidate the VIEs or approve them to sell, transfer, mortgage, or dispose of their
assets or legal or beneficial interests in the business in any manner without our prior consent. However, in the event that the shareholders
breach this obligation and voluntarily liquidate the VIEs, or the VIEs declare bankruptcy, or all or part of their assets become
subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could
materially and adversely affect our business, results of operations, and financial condition. Furthermore, if the VIEs undergo a
voluntary or involuntary liquidation proceeding, their shareholders or unrelated third-party creditors may claim rights to some or all
of its assets, hindering our ability to operate our business, which could materially and adversely affect our business, financial condition,
and results of operations.
Contractual
arrangements may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our
financial condition and the value of your investment.
Pursuant
to applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by PRC
tax authorities. We may be subject to adverse tax consequences if the PRC tax authorities determine that the contractual arrangements
among WXBJ, Zhihui Qiyuan, and its registered shareholders or the contractual arrangements among WXZJ, Sixiang Qiyuan, and its registered
shareholders are not on an arm's length basis and therefore constitute favorable transfer pricing. As a result, the PRC tax authorities
could require that VIEs adjust their taxable income upward for PRC tax purposes. Such an adjustment could increase VIEs' tax expenses
without reducing the tax expenses of WXBJ and/or WXZJ, subject the VIEs to late payment fees and other penalties for under-payment of
taxes, and result in the loss of any preferential tax treatment WXBJ and/or WXZJ may have. As a result, our consolidated results of operations
may be adversely affected.
25
We
may rely on dividends paid by our PRC subsidiaries to fund cash and financing requirements. Any limitation on the ability of our PRC
subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends
to holders of our ordinary shares.
We
and our Hong Kong subsidiary are holding companies, and we may rely on dividends to be paid by our PRC subsidiaries for our cash and
financing requirements, including the funds necessary to pay dividends and other cash distributions to the holders of the ordinary shares
and pay back any debt it may incur. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the
debt may restrict their ability to pay dividends or make other distributions to us.
Under
PRC laws and regulations, a wholly foreign-owned enterprise in China, such as WXBJ or WXZJ, may pay dividends only out of its accumulated
profits as determined in accordance with PRC accounting standards and regulations. In addition, according to current effective PRC laws
and regulations regarding foreign investment which may be updated following the effectiveness of PRC Foreign Investment Law, a wholly
foreign-owned enterprise is required to set aside at least 10% of its after-tax profits each year, after making up previous years'
accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such fund reaches 50% of its registered
capital. At the discretion of the board of directors of the wholly foreign-owned enterprise, it may allocate a portion of its after-tax
profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are
not distributable as cash dividends. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions
to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business,
pay dividends, or otherwise fund and conduct our business.
If
the custodians or authorized persons of our controlling non-tangible assets, including chops and seals, fail to fulfill their responsibilities,
or misappropriate or misuse these assets, our business and operations may be materially and adversely affected.
In
China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature.
Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security
Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The
chops of our PRC subsidiaries and the VIEs are generally held securely by the personnel designated or approved by us in accordance with
our internal control procedures. To the extent those chops are not kept safe, are stolen, or are used by unauthorized persons or for
unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised and those corporate entities
may be bound to abide by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power
and authority to do so. If any of our authorized personnel obtains, misuses, or misappropriates our chops for whatever reason, we could
experience disruptions in our operations. We may also have to take corporate or legal action, which could require significant time and
resources to resolve while distracting management from our operations. Any of the foregoing could adversely affect our business and results
of operations.
Risk
Factors Relating to Doing Business in China
Uncertainties
in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.
The
PRC legal system is based on written statutes where prior court decisions have limited value as precedents. Our PRC subsidiaries and
the VIEs, in particular WXBJ and WXZJ, two wholly foreign-owned enterprises, are subject to laws and regulations applicable to foreign-invested
enterprises as well as various Chinese laws and regulations generally applicable to companies incorporated in China. However, since these
laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations,
and rules are not always uniform, and enforcement of these laws, regulations, and rules involves uncertainties.
From
time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative
and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult
to evaluate the outcome of administrative and court proceedings and the level of legal protection we may receive. Furthermore, the PRC
legal system is based in part on government policies and internal rules that may have retroactive effect. As a result, we may not be
aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over
the scope and effect of our contractual, property (including intellectual property) and procedural rights, could materially and adversely
affect our business and impede our ability to continue our operations.
26
Regulation
and censorship of information disseminated over the mobile and Internet in China may adversely affect our business and subject us to
liability for streaming content or content posted on our platforms.
Internet
companies in China are subject to a variety of existing and new rules, regulations, policies, and license and permit requirements. In
connection with enforcing these rules, regulations, policies, and requirements, relevant government authorities may suspend services
by, or revoke licenses of, any Internet or mobile content service provider that is deemed to provide illicit content online or on mobile
devices, and such activities may be intensified in connection with any ongoing government campaigns to eliminate prohibited content online.
For example, in 2016, the Office of the Anti-Pornography and Illegal Publications Working Group, the Cyberspace Administration of China,
the Ministry of Industry and Information Technology, the Ministry of Culture and the Ministry of Public Security jointly launched a "Clean
Up the Internet 2016" campaign. Based on publicly available information, the campaign aims to eliminate pornographic information
and content in the Internet information services industry by, among other things, holding liable individuals and corporate entities that
facilitate the distribution of pornographic information and content. Publicly traded Chinese Internet companies voluntarily initiated
self-investigations to filter and remove content from their websites and cloud servers.
We
endeavor to eliminate illicit content from our platforms. We have made substantial investments in resources to monitor content that broadcasters
generate on our platforms and the way in which our users engage with each other through our platforms. We use a variety of methods to
ensure our platforms remain a healthy and positive experience for our users. Although we employ these methods to filter content posted
on our platforms, we cannot be sure that our internal content control efforts will be sufficient to remove all content that may be viewed
as indecent or otherwise non-compliant with PRC law and regulations. Government standards and interpretations as to what constitutes
illicit online content or behavior are subject to interpretation and may change in a manner that could render our current monitoring
efforts insufficient. The Chinese government has wide discretion in regulating online activities and, irrespective of our efforts to
control the content on our platforms, government campaigns and other actions to reduce illicit content and activities could subject us
to negative press or regulatory challenges and sanctions, including fines, suspension or revocation of our licenses to operate in China
or a suspension or ban on our mobile or online platform, including suspension or closure of one or more parts of or our entire business.
Further, our senior management could be held criminally liable if we are deemed to be profiting from illicit content on our platforms.
Although our business and operations have not been materially and adversely affected by government campaigns or any other regulatory
actions in the past, there is no assurance that our business and operations will be immune from government actions or sanctions in the
future. If government actions or sanctions are brought against us, or if there are widespread rumors that government actions or sanctions
have been brought against us, our reputation could be harmed and we may lose users and customers. As a result, our revenues and results
of operations may be materially and adversely affected and the value of our Class A Ordinary Shares could be dramatically reduced.
Adverse
Changes in China's political, economic social conditions or government policies could have a material adverse effect on the overall
economic growth of China, which could materially and adversely affect the growth of the business and operations of the VIES and our PRC
subsidiaries.
The
Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement,
level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented
measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and
the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still
owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development
by imposing industrial policies.
The
Chinese government also exercises significant control over China's economic growth through allocating resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or
companies.
27
While
the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various
sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws
and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely
affect the future business and operating results and the competitive position of the VIEs and our PRC subsidiaries. The Chinese government
has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit
the overall Chinese economy but may have a negative effect on the VIEs and our PRC subsidiaries. In addition, in the past the Chinese
government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures
may cause decreased economic activity in China, which may adversely affect the future business and operating results of the VIEs and
our PRC subsidiaries.
The
PRC government's significant oversight over our business operation could result in a material adverse change in the operations
of the VIEs and our company as a whole and the value of our Class A ordinary shares.
We
conduct our business in China primarily through our PRC subsidiaries (including WFOEs) and the VIEs, which are subject to Chinese government's
significant oversight and discretion. The Chinese government may intervene or influence the current and future operations of our PRC
subsidiaries and the VIEs at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers
likes ourselves, which could result in a material change in our operations and the value of our securities.
In
the event that the Chinese government exert more oversight and control over offerings that are conducted overseas and foreign investment
in China-based issuers, relevant Chinese regulatory authorities could disallow contractual arrangement under the VIE agreements and hinder
our ability to exert contractual control over or consolidate the VIEs under US. GAAP. the VIEs, which would likely result in a material
change in operations and/or value of the Company's securities, including that it could cause the value of such securities to significantly
decline or become worthless.
Rules
and regulations in China can change quickly with little or no advance notice and their interpretation and the implementation involve
uncertainty, which could materially and adversely affect the operations of the VIEs and our company as a whole and the value of our securities.
The
PRC government may take a series of regulatory actions and statements to regulate business operations in China from time to time with
little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based
companies listed overseas using variable interest entity structures which has been implemented by CSRC, adopting new measures to extend
the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the General Office of the
Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on
illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things,
requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance
supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the
PRC securities laws. On December 28, 2021, the Cyberspace Administration of China ("CAC") and certain other governmental
authorities issued the Measures of Cybersecurity Review (effective as of February 15, 2022), requiring that cyberspace operators with
personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity
Review. Furthermore, on February 17, 2023, the CSRC issued Trial Administrative Measures of Overseas Securities Offering and Listing
by Domestic Enterprises (effective as of March 31, 2023), requiring the company that directly or indirectly go to public offering overseas
shall make filing with the CSRC within three days after its completion of offering. These new laws and regulations can be complex and
stringent, and many are subject to change and uncertain interpretation, which could result in claims, change to the data and other business
practices of the VIEs and our company, regulatory investigations, penalties, increased cost of operations, or declines in user growth
or engagement, or otherwise affect the business of the VIEs. As of the date of this annual report, we have not received any inquiry or
notice or any objections to this annual report from CSRC, the CAC or any other PRC governmental authorities that have jurisdiction over
our operations. However, given the current regulatory environment in China, there remains uncertainty regarding the interpretation and
enforcement of the laws of China. Any future quick changes of the laws and rules with little or no advice notice and the uncertainty
resulted therefrom could materially and adversely disrupt and affect the operation and future financing of our PRC subsidiaries, the
VIEs and our company.
28
Our
shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to
inspect our auditors for two consecutive years. The delisting and the cessation of trading of our shares, or the threat of their being
delisted and prohibited from being traded, may materially and adversely affect the value of your investment.
The
Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines
that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB
for three consecutive years beginning in 2021, the SEC shall prohibit such shares from being traded on a national securities exchange
or in the over-the-counter trading market in the U.S.
On
March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements
of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a "non-inspection"
year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA
Act, including the listing and trading prohibition requirements described above.
On
June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law, would reduce
the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.
On
November 5, 2021, the SEC approved Rule 6100 adopted by the PCAOB to establish a framework for the PCAOB's determinations under
the HFCA Act that the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction
because of a position taken by an authority in that jurisdiction.
On
December 2, 2021, the SEC issued amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission
and disclosure requirements in the HFCA Act, which require us to identify in our annual report on Form 20-F, (1) the auditors that provided
opinions to the financial statements presented in the annual report, (2) the location where the auditors' report was issued, and
(3) the PCAOB ID number of the audit firm or branch that performed the audit work. If the SEC determines that we have three consecutive
non-inspection years, the SEC will issue stop order to prohibit the trading of our shares.
On
December 16, 2021, the PCAOB issued a Determination Report which reported that the PCAOB is unable to inspect or investigate completely
registered public accounting firms headquartered in: (1) mainland China of the People's Republic of China, because of a position
taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region of the PRC, because of a position
taken by one or more authorities in Hong Kong.
On
August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance
of the People's Republic of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public
accounting firms headquartered in mainland China and Hong Kong. The Statement of Protocol gives the PCAOB sole discretion to select the
firms, audit engagements and potential violations it inspects and investigates and puts in place procedures for PCAOB inspectors and
investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed. In
addition, the Statement of Protocol grants the PCAOB direct access to interview and take testimony from all personnel associated with
the audits the PCAOB inspects or investigates. While significant, the Statement of Protocol is only a first step. Uncertainties still
exist as to whether and how this new Statement of Protocol will be implemented. The PCAOB is required to reassess its determinations
by the end of 2022 and there are uncertainties whether the PCAOB will determine it is still unable to inspect or investigate completely
registered public accounting firms in mainland China and Hong Kong.
On
December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public
accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations
that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and
Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting
firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our
auditor's control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans
to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations
as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA
if needed.
On
December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which, among other things, amended the HFCAA to reduce
the number of consecutive years an issuer can be identified as a Commission-Identified Issuer before the Securities and Exchange Commission
must impose an initial trading prohibition on the issuer's securities from three years to two years. Therefore, once an issuer
is identified as a Commission-Identified Issuer for two consecutive years, the Securities and Exchange Commission is required under the
HCFAA to prohibit the trading of the issuer's securities on a national securities exchange and in the over-the-counter market.
Our
former auditor, Friedman LLP, as an auditor of companies that are traded publicly in the United States and a firm registered with the
PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess their compliance with
the applicable professional standards. We are not aware of any reasons to believe or conclude that Friedman LLP would not permit an inspection
by the PCAOB or that it may not be subject to such inspection. However, given the recent developments, we cannot assure you whether PCAOB
or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's
audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or
experience as it relates to the audit of our financial statements.  Our shares could still be delisted and prohibited from being
traded over-the-counter under the HFCA Act PCAOB determines in the future that it is unable to fully inspect or investigate our
auditor which has a presence in China.
29
Our
current auditor, OneStop Assurance PAC, as an auditor of companies that are traded publicly in the United States and a firm registered
with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess their compliance
with the applicable professional standards. We are not aware of any reasons to believe or conclude that OneStop Assurance PAC would not
permit an inspection by the PCAOB or that it may not be subject to such inspection. However, given the recent developments, we cannot
assure you whether PCAOB or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness
of our auditor's audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources,
geographic reach or experience as it relates to the audit of our financial statements.  Our shares could still be delisted and prohibited
from being traded over-the-counter under the HFCA Act PCAOB determines in the future that it is unable to fully inspect or investigate
our auditor which has a presence in China.
Furthermore,
there is no guarantee that future audit reports will be prepared by auditors that are completely inspected by the PCAOB, and, as such,
future investors may be deprived of such inspections, which could result in limitations or restrictions to SHC's access of the
U.S. capital markets.
The
filling of the CSRC will be required and approval and/or other requirements from other PRC governmental authorities may be required in
connection with an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will
be able to complete such filing or obtain such approval.
On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises,
or the Trial Measures, which will become effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules
No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic
Enterprises and relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC's official
website. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic principles of the Draft Administrative
Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing
by domestic enterprises. Under the Trial Measures and the Guidance Rules and Notice, domestic enterprises conducting overseas securities
offering and listing, either directly or indirectly, shall complete filings with the CSRC pursuant to the Trial Measures' requirements
within three working days following the submission of an application for initial public offering or listing. Starting from March 31,
2023, enterprises that have been listed overseas or satisfy all of the following conditions shall be deemed as "Grandfathered Issuers"
and are not required to complete the overseas listing filing immediately, but shall complete filings as required if they conduct refinancing
or are involved in other circumstances that require filing with the CSRC: (i) the application for indirect overseas offering or listing
shall have been approved by the relevant overseas regulatory authority or stock exchange prior to March 31, 2023 (as the SEC does not
approve or disapprove of an offering, this requirement is interpreted to be the SEC's declaration of the registration statement
to be effective with respect to this offering), (ii) the enterprise is not required to reapply for the approval of the relevant overseas
regulatory authority or stock exchange, and (iii) such overseas securities offering or listing shall be completed before September 30,
2023. Starting from March 31, 2023, domestic enterprises that have submitted valid applications for overseas offerings and listing but
have not obtained the approval from relevant overseas regulatory authority or overseas stock exchange shall complete filings with the
CSRC prior to their overseas offering and listings.
Our
PRC counsel, has advised us that, we will not be required to submit an application to the CSRC for the approval regarding the Company's
listing shares on Nasdaq because the Company has already been listed before March 31, 2023. However, if the Company issues additional
securities for refinancing or acquisition of domestic assets, or go listing in other public markets, it shall make filling with the CSRC
within three days after completion of such offering, and may be subject to pre-examination, confirmation or approval from the competent
PRC authorities governing our business operation in China, such as MIIT and CAC.
In
addition, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, purport to
require offshore special purpose vehicles that are controlled by PRC companies or individuals and that have been formed for the purpose
of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies or assets to obtain CSRC approval
prior to publicly listing their securities on an overseas stock exchange. The interpretation and application of the regulations remain
unclear, and whether such M&A Rules will be abolished entirely by the authorities, or particularly, replaced partially by new regulations
such as the Trial Measures. If a governmental approval is still required, it is uncertain how long it will take for us to obtain such
approval, and, even if we obtain such approval, the approval could be rescinded. Any failure to obtain or a delay in obtaining the requisite
governmental approval or filings for an offering, or a rescission of such CSRC approval or filing if obtained by us, may subject us to
sanctions imposed by the relevant PRC regulatory authority, which could include fines and penalties on our and the VIEs' operations
in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially
and adversely affect our business, financial condition, and results of operations.
30
Our
PRC counsel, has advised us that, based on its understanding of the M&A Rules, we will not be required to submit an additional application
to the CSRC for the approval under the M&A Rules for an offering. However, our PRC counsel has further advised us that there remains
some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, especially by
such governmental authorities other than CSRC, and its opinions summarized above are subject to any new laws, rules and regulations or
detailed implementations and interpretations in any form relating to the M&A Rules, if any. We cannot assure you that relevant PRC
governmental authorities, including the CSRC, would reach the same conclusion as our PRC counsel, and hence, we may face regulatory actions
or other sanctions from them. Furthermore, relevant PRC governmental authorities promulgated the Opinions on Strictly Cracking Down Illegal
Securities Activities, which provided that the administration and supervision of overseas-listed China-based companies will be strengthened,
and the special provisions of the State Council on overseas issuance and listing of shares by such companies will be revised, clarifying
the responsibilities of domestic industry competent authorities and regulatory authorities. However, the Opinions on Strictly Cracking
Down Illegal Securities Activities only provides principle rules, leaving uncertainties regarding the interpretation and implementation
of these opinions. It is possible that any new rules or regulations may impose additional requirements on us. In addition, on December
28, 2021, the Cyberspace Administration of China ("CAC") and certain other governmental authorities issued the Measures of
Cybersecurity Review (effective as of February 15, 2022), according to which, among others, operators of "critical information
infrastructure" or data processors holding over one million users' personal information shall apply to the Cybersecurity
Review Office for a cybersecurity review before any listing on a foreign stock exchange. If it is determined in the future that CAC approval
or other procedural requirements from any other governmental authorities are required to be met for and prior to an additional offering,
it is uncertain whether we can or how long it will take us to obtain such approval or complete such procedures and any such approval
could be rescinded. Any failure to obtain or delay in obtaining such approval or completing such procedures for an offering, or a rescission
of any such approval, could subject us to sanctions by the relevant PRC governmental authorities. The governmental authorities may impose
restrictions and penalties on our operations in China, such as the suspension of our apps and services, revocation of our licenses, or
shutting down part or all of our operations, limit our ability to pay dividends outside of China, delay or restrict the repatriation
of the proceeds from an offering into China or take other actions that could have a material adverse effect on our business, financial
condition, results of operations and prospects, as well as the trading price of our Class A ordinary shares. The PRC governmental authorities
may also take actions requiring us, or making it advisable for us, to halt an offering before settlement and delivery of the Class A
ordinary shares offered hereby. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement
and delivery, you do so at the risk that settlement and delivery may not occur. In addition, if the PRC governmental authorities later
promulgate new rules or explanations requiring that we obtain their approvals for filings, registrations or other kinds of authorizations
for an offering, we cannot assure you that we can obtain the approval, authorizations, or complete required procedures or other requirements
in a timely manner, or at all, or obtain a waiver of the requisite requirements if and when procedures are established to obtain such
a waiver.
The
VIEs may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply
with applicable laws and obligations could have a material and adverse effect on the business, financial condition and results of operations
of the VIEs and our company as a whole.
The
VIEs are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with
applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations.
We may be subject to various risks and costs associated with the collection, use, sharing, retention, security, and transfer of confidential
and private information, such as personal information and other data. This data is wide ranging and relates to our employees, users,
anchors, contractors and other counterparties and third parties.
On
June 10, 2021, the Standing Committee of the National People's Congress of China promulgated the Data Security Law which shall
take effect on September 1, 2021. The Data Security Law provides for data security and privacy obligations of entities and individuals
carrying out data activities, prohibits entities and individuals in China from providing any foreign judicial or law enforcement authority
with any data stored in China without approval from the competent PRC authority, and sets forth the legal liabilities of entities and
individuals found to be in violation of their data protection obligations, including rectification order, warning, fines of up to RMB10
million, suspension of relevant business, and revocation of business permits or licenses.
31
On
August 20, 2021, the Standing Committee of the National People's Congress adopted the Personal Information Security Law, which
shall come into force as of November 1, 2021. The Personal Information Protection Law includes the basic rules for personal information
processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing
activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and
use of personal information.
On
December 28, 2021, the CAC and twelve other PRC regulatory authorities jointly revised and issued the Cyber Security Review Measures
("the Review Measures"), which became effective on February 15, 2022. The Review Measures provides, among others, (i) the
purchase of cyber products and services by critical information infrastructure operators (the "CIIOs") and the network platform
operators (the "Network Platform Operators") which engage in data processing activities that affects or may affect national
security shall be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the
implementation of cybersecurity review under the CAC; and (ii) the Network Platform Operators with personal information data of more
than one million users that seek for listing in a foreign country are obliged to apply for a cybersecurity review by the Cybersecurity
Review Office. On November 14, 2021, the CAC published the Regulations on the Administration of Network Data Security (Draft for Comment)
to open for public consultation, which stipulates that if a data processor proposes to be listed abroad or provide personal information
outside the territory of PRC, it shall be subject to certain security assessment and filing requirements in CAC or competent authorities.
As advised by our PRC legal counsel, we believe that we and our PRC subsidiaries and the VIEs are not required to apply for a cyber security
review with CAC, since we listed our Ordinary Shares on the Nasdaq before the effective date of the Review Measures, and our PRC subsidiaries
and the VIEs as the "network platform operators" will not be subject to CAC's review or approval regarding data cyber
security under other current-effective CAC rules, since that, (A) all of collection and processing of any personal information or other
data in the ordinary course of business are conducted by our PRC subsidiaries and the VIEs within the territory of PRC, (B) none of our
PRC subsidiaries or the VIEs provides any personal information or operational data outside the territory of PRC, (C) such personal information
or operational data handled by our PRC subsidiaries and the VIEs will not be construed as important data threatening China's national
security, and (D) none of our PRC subsidiaries or the VIEs will fell under the "critical information infrastructure operators",
which are subject to direct and more strict regulatory supervision under CAC rules. However, the Review Measures do not provide any explanation
or interpretation of "overseas listing" or "affect or may affect national security," and Chinese government may
have broad discretion in interpreting and enforcing these laws and regulations, which may also require the Company to make filings or
obtain approval from CAC or other competent authorities with respect to its further offerings in overseas public markets. We cannot predict
the impact of the review measures, if any, at this stage, and we will closely monitor and assess the statutory developments in this regard.
On
July 7, 2022, the CAC promulgated the Measures on Security Assessment of Cross-border Data Transfer, which became effective on September
1, 2022. The data export measures require that any data processor who processes or exports personal information exceeding a certain volume
threshold pursuant to the measures shall apply for a security assessment by the CAC before transferring any personal information abroad,
including the following circumstances: (i) important data will be provided overseas by any data processor; (ii) personal information
will be provided overseas by any operator of critical information infrastructure or any data processor who processes the personal information
of more than 1,000,000 individuals; (iii) personal information will be provided overseas by any data processor who has provided the personal
information of more than 100,000 individuals in aggregate or has provided the sensitive personal information of more than 10,000 individuals
in aggregate since January 1, 2021; and (iv) other circumstances where the security assessment is required as prescribed by the CAC.
A data processor shall, before applying for the security assessment of an outbound data transfer, conduct a self-assessment of the risks
involved in the outbound data transfer. The security assessment of a cross-border data transfer shall focus on assessing the risks that
may be brought about by the cross-border data transfer concerning national security, public interests, or the lawful rights and interests
of individuals or organizations.
32
The
VIEs do not collect, process or use personal information of entities or individuals other than what is necessary for our business and
do not disseminate such information. Although we believe the VIEs currently are not required to obtain clearance from the Cyberspace
Administration of China under the Measures for Cybersecurity Review or the Opinions on Strictly Cracking Down on Illegal Securities Activities,
we face uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance
can be timely obtained, or at all.
Compliance
with the PRC Cybersecurity Law, the PRC National Security Law, the Data Security Law, the Personal Information Protection Law, the Cybersecurity
Review Measures, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, including data security
and personal information protection laws, may result in additional expenses to us and subject us to negative publicity, which could harm
our reputation among users and negatively affect the trading price of our shares in the future. There are also uncertainties with respect
to how the PRC Cybersecurity Law, the PRC National Security Law and the Data Security Law will be implemented and interpreted in practice.
PRC regulators, including the Ministry of Public Security, the MIIT, the SAMR and the Cyberspace Administration of China, have been increasingly
focused on regulation in the areas of data security and data protection, including for mobile apps, and are enhancing the protection
of privacy and data security by rule-making and enforcement actions at central and local levels. We expect that these areas will receive
greater and continued attention and scrutiny from regulators and the public going forward, which could increase our compliance costs
and subject us to heightened risks and challenges associated with data security and protection. If we are unable to manage these risks,
we could become subject to penalties, including fines, suspension of business, prohibition against new user registration (even for a
short period of time) and revocation of required licenses, and our reputation and results of operations could be materially and adversely
affected.
It
may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China.
Shareholder
claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality
in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations
or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities
regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the
securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities
regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed
interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator,
such as the Department of Justice, the SEC, the PCAOB and other authorities, to directly conduct investigation or evidence collection
activities within China may further increase difficulties faced by you in protecting your interests.
In
the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation or collect evidence within
the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the
PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by
way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority
of the PRC.
33
Failure
to comply with laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause
us to lose customers or otherwise harm our business.
Our
PRC subsidiaries and the VIEs in China are subject to regulation by various governmental agencies in China, including agencies responsible
for monitoring and enforcing compliance with various legal obligations, such as value-added telecommunication laws and regulations, privacy
and data protection-related laws and regulations, intellectual property laws, employment and labor laws, workplace safety, consumer protection
laws, governmental trade laws, import and export controls, anti-corruption and anti-bribery laws, and tax laws and regulations. These
laws and regulations impose added costs on our business. Noncompliance with applicable regulations or requirements could subject our
PRC subsidiaries and the VIEs to:
●
investigations, enforcement actions, and sanctions;
●
mandatory changes to our network and products;
●
disgorgement of profits, fines, and damages;
●
civil and criminal penalties or injunctions;
●
claims for damages by our customers or channel partners;
●
termination of contracts;
●
loss of intellectual property rights;
●
failure to obtain, maintain or renew certain licenses,
    approvals, permits, registrations or filings
●
necessary to conduct our operations; and
●
temporary or permanent debarment from sales to public
    service organizations.
If
any governmental sanctions are imposed, or if our PRC subsidiaries or the VIEs do not prevail in any possible civil or criminal litigation,
the business, results of operations, and financial condition of our PRC subsidiaries and the VIEs could be adversely affected. In addition,
responding to any action will likely result in a significant diversion of our management's attention and resources and an increase
in professional fees. Enforcement actions and sanctions could materially harm the business, results of operations, and financial condition
of our PRC subsidiaries and the VIEs.
Additionally,
companies in the technology industry have recently experienced increased regulatory scrutiny. Any similar reviews by regulatory agencies
or legislatures may result in substantial regulatory fines, changes to the business practices of our PRC subsidiaries and the VIEs, and
other penalties, which could negatively affect the business and results of operations of our PRC subsidiaries and the VIEs.
Changes
in social, political, and regulatory conditions or in laws and policies governing a wide range of topics may cause our PRC subsidiaries
and the VIEs to change their business practices. Further, the expansion by our PRC subsidiaries and the VIEs into a variety of new fields
also could raise a number of new regulatory issues. These factors could negatively affect the business and results of operations of our
PRC subsidiaries and the VIEs in material ways.
We
may rely on dividends and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements
we may have, and any limitation on the ability of our Chinese subsidiaries to make payments to us could have a material and adverse effect
on our ability to conduct our business.
Scienjoy
Holding Corporation, the British Virgin Islands holding company, may rely on dividend payments from our PRC subsidiaries for cash and
financing requirements we may have, including the funds necessary to pay dividends and other cash distributions to our shareholders or
to service any debt we may incur. Our WFOEs receive payments from the VIEs pursuant to the VIE agreements. Our WFOEs also receive payments
from their PRC operating subsidiaries. WFOEs may make distribution of such payments to Scienjoy International Limited, our Hong Kong
subsidiary, then further distribute the funds to Scienjoy Holding Corporation through its fully owned subsidiary, Scienjoy Inc. If any
of our PRC subsidiaries or the VIEs incur debt on its own behalf in the future, the instruments governing the debt may restrict its ability
to pay dividends or make other distributions to us.
34
According
to the Foreign Investment Law of the People's Republic of China and its implementing rules, which jointly established the legal
framework for the administration of foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely
transfer into or out of China its contributions, profits, capital earnings, income from asset disposal, intellectual property rights,
royalties acquired, compensation or indemnity legally obtained, and income from liquidation, made or derived within the territory of
China in RMB or any foreign currency, and any entity or individual shall not illegally restrict such transfer in terms of the currency,
amount and frequency. According to the Company Law of the People's Republic of China and other Chinese laws and regulations, our
PRC subsidiaries may pay dividends only out of their respective accumulated profits as determined in accordance with Chinese accounting
standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax
profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered
capital. Where the statutory reserve fund is insufficient to cover any loss a PRC subsidiary incurred in the previous financial year,
its current financial year's accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund
is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be
distributed to us as dividends. At their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on
Chinese accounting standards to a discretionary reserve fund.
Our
PRC subsidiaries and the VIEs receive substantially all of their revenue in Renminbi. Renminbi is not freely convertible into other currencies.
As result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use their potential future Renminbi
revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and,
in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability
of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make
other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under the
"current account," which includes dividends, trade and service-related foreign exchange transactions, but not under the "capital
account," which includes foreign direct investment and foreign currency debt. Currently, our PRC subsidiaries may purchase foreign
currency for settlement of "current account transactions," including payment of dividends to us, without the approval of
SAFE by complying with certain procedural requirements. However, the relevant Chinese governmental authorities may limit or eliminate
our ability to purchase foreign currencies in the future for current account transactions. The Chinese government may continue to strengthen
its capital controls, and additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions
falling under both the current account and the capital account. Any existing and future restrictions on currency exchange may limit our
ability to utilize revenue generated in renminbi to fund our business activities outside of China or pay dividends in foreign currencies
to holders of our securities. Foreign exchange transactions under the capital account remain subject to limitations and require approvals
from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability to obtain foreign
currency through debt or equity financing for our subsidiaries.
In
response to the persistent capital outflow in China and renminbi's depreciation against the U.S. dollar in the fourth quarter of
2016, the People's Bank of China ("PBOC") and the SAFE have promulgated a series of capital controls in early 2017,
including stricter vetting procedures for domestic companies to remit foreign currency for overseas investments, dividends payments and
shareholder loan repayments.
The
Chinese government may continue to strengthen its capital controls, and more restrictions and substantial vetting processes may be put
forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability
of our Chinese subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to
grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.
Uncertainties
exist with respect to the interpretation and implementation of Anti-Monopoly Guidelines for Internet Platforms and how it may impact
the business operations of the VIEs.
In
February 2021, the Anti-Monopoly Guidelines for Internet Platforms was promulgated by the Anti-monopoly Commission of the PRC State Council.
The Anti-Monopoly Guidelines for Internet Platforms is consistent with the Anti-Monopoly Law of PRC and prohibits monopoly agreements,
abuse of dominant position and concentration of undertakings that may have the effect of eliminating or restricting competitions in the
field of platform economy. More specifically, the Anti-Monopoly Guidelines for Internet Platforms outlines certain practices that may,
if without justifiable reasons, constitute abuse of dominant position, including without limitation, tailored pricing using big data
and analytics, actions or arrangements seen as exclusivity arrangements, using technology means to block competitors' interface,
using bundled services to sell services or products, and compulsory collection of user data. Besides, Anti-Monopoly Guidelines for Internet
Platforms expressly states that concentration involving VIEs will also be subject to antitrust filing requirements.
In
April 2021, the State Administration for Market Regulation (the "SAMR"), together with certain other PRC government authorities
convened an administrative guidance meeting, focusing on unfair competition acts in community group buying, self-inspection and rectification
by major internet companies of possible violations of anti-monopoly, anti-unfair competition, tax and other related laws and regulations,
and requesting such companies to comply with relevant laws and regulations strictly and be subject to public supervision. In addition,
many internet companies, including the over 30 companies which attended such administrative guidance meeting, are required to conduct
a comprehensive self-inspection and make necessary rectification accordingly. The SAMR has stated it will organize and conduct inspections
on the companies' rectification results. If the companies are found to conduct illegal activities, more severe penalties are expected
to be imposed on them in accordance with the laws.
35
On
June 24, 2022, the Standing Committee of the National People's Congress promulgated the Decision on Revising the Anti-monopoly Law, which
took effect on August 1, 2022. The revised Anti-Monopoly Law provides, among others, that business operators shall not abuse data, algorithms,
technology, capital advantages and platform rules to conduct monopoly activities. The revised Anti-Monopoly Law also requires relevant
government authorities to strengthen the examination of undertaking concentration in important areas and establish the hierarchical review
system of undertaking concentration, and enhances penalties for the violation of the regulations regarding undertaking concentration
and other monopoly activities.
Since
the Anti-Monopoly Guidelines for Internet Platforms are relatively new, uncertainties still exist in relation to its interpretation and
implementation, although we and the VIEs do not believe we or the VIEs engage in any foregoing situations, we cannot assure you that
our business operations will comply with such regulation in all respects, and any failure or perceived failure by us to comply with such
regulation may result in governmental investigations, fines and/or other sanctions on us.
The
recent joint statement by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S. House
of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments
could add uncertainties to our future offerings, business operations share price and reputation.
U.S.
public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative
publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative
publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial
accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.
On
December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their
oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman
Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the
risks associated with investing in companies based in or have substantial operations in emerging markets including China, reiterating
past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work papers in
China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice and other
U.S. regulatory actions, including in instances of fraud, in emerging markets generally.
On
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned
or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not
subject to PCAOB inspection. If the PCAOB is unable to inspect the company's auditors for three consecutive years, the issuer's
securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding
Foreign Companies Accountable Act.
On
May 18, 2021, NASDAQ filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in a "Restrictive Market," (ii) prohibit Restrictive Market companies from directly listing on NASDAQ Capital Market, and
only permit them to list on NASDAQ Global Select or NASDAQ Global Market in connection with a direct listing and (iii) apply additional
and more stringent criteria to an applicant or listed company based on the qualifications of the company's auditors.
On
October 4, 2021, the SEC approved NASDAQ's revised proposals for the rule changes. As a result of such scrutiny, criticism
and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some
cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and
are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny,
criticism and negative publicity will have on us, our business and our share price. If we become the subject of any unfavorable allegations,
whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations
and/or defend our Company. This situation will be costly and time consuming and distract our management from developing our growth. If
such allegations are not proven to be groundless, we and our operating subsidiary's business operations will be severely affected
and you could sustain a significant decline in the value of our Class A ordinary share.
36
You
may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions against us or our
management named in the prospectus based on foreign laws, and therefore you may not be afforded the same protection as provided
to investors in U.S. domestic companies.
We
are an exempted company incorporated under the laws of the British Virgin Islands and conduct most of our revenue-generating operations
in mainland China. In addition, certain of our executive officers and directors are PRC nationals and reside within China for
a significant portion of the time.  All or a substantial portion of the assets of these persons are also located outside the United
States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United
States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if
you are successful in bringing an action of this kind, the laws of the British Virgin Islands and of China may render you unable to enforce
a judgment against us, our assets, our directors and officers or their assets. Therefore, you may not be able to enjoy the same protection
provided by various U.S. authorities as it is provided to investors in U.S. domestic companies. For more information regarding the relevant
laws of the British Virgin Islands and China.
Currently,
there is no law or regulation specifically governing virtual asset property rights and therefore it is not clear what liabilities, if
any, live streaming platform operators may have for virtual assets.
While
participating on our platforms, our users acquire, purchase, and accumulate some virtual assets, such as gifts or certain status. Such
virtual assets can be important to users and have monetary value and, in some cases, are sold for actual money. In practice, virtual
assets can be lost for various reasons, often through other users' unauthorized use of another user account and occasionally through
data loss caused by delay of network service, network crash, or hacking activities. Currently, there is no PRC law or regulation specifically
governing virtual asset property rights. As a result, there is uncertainty as to who the legal owner of virtual assets is, whether and
how the ownership of virtual assets is protected by law, and whether an operator of live streaming platform such as us would have any
liability, whether in contract, tort or otherwise, to users or other interested parties, for loss of such virtual assets. Based on recent
PRC court judgments, the courts have typically held online platform operators liable for losses of virtual assets by platform users and
ordered online platform operators to return the lost virtual items to users or pay damages and losses. In case of a loss of virtual assets,
we may be sued by our users and held liable for damages, which may negatively affect our reputation and business, results of operations,
and financial condition.
Under
the PRC enterprise income tax law, we may be classified as a PRC "resident enterprise," which could result in unfavorable
tax consequences to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.
Under
the PRC enterprise income tax law that became effective on January 1, 2008 and other related rules and regulations published by PRC State
Taxation Administration, an enterprise established outside the PRC with "de facto management bodies" within the PRC is considered
a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income
tax rate on our worldwide income. On April 22, 2009, the State Taxation Administration, or the SAT, issued the Circular Regarding the
Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprise on the Basis of De Facto Management
Bodies, or SAT Circular 82, which provides certain specific criteria for determining whether the "de facto management body"
of a PRC-controlled enterprise that is incorporated offshore is located in China. Further to SAT Circular 82, on August 3, 2011, the
State Taxation Administration issued the Administrative Measures of Enterprise Income Tax of Chinese-Controlled Offshore Incorporated
Resident Enterprises (Trial), or SAT Bulletin 45, which became effective on September 1, 2011, to provide more guidance on the implementation
of SAT Circular 82.
According
to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered a
PRC tax resident enterprise by virtue of having our "de facto management body" in China and will be subject to PRC enterprise
income tax on our worldwide income only if all of the following conditions are met: (a) the senior management and core management departments
in charge of our daily operations function have their presence mainly in the PRC; (b) our financial and human resources decisions are
subject to determination or approval by persons or bodies in the PRC; (c) our major assets, accounting books, company seals, and minutes
and files of our board and shareholders' meetings are located or kept in the PRC; and (d) not less than half of the enterprise's
directors or senior management with voting rights habitually reside in the PRC. SAT Bulletin 45 provides further rules on residence status
determination, post-determination administration as well as competent tax authorities procedures.
Although
SAT Circular 82 and SAT Bulletin 45 apply only to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise group
and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect SAT's general
position on how the term "de facto management body" could be applied in determining the tax resident status of offshore enterprises,
regardless of whether they are controlled by PRC enterprises, individuals, or foreigners.
We
do not meet all of the conditions set forth in SAT Circular 82. Therefore, we believe that we should not be treated as a "resident
enterprise" for PRC tax purposes even if the standards for "de facto management body" prescribed in the SAT Circular
82 applied to us. For example, our minutes and files of the resolutions of our board of directors and the resolutions of our shareholders
are maintained outside the PRC.
37
However,
it is possible that the PRC tax authorities may take a different view. If the PRC tax authorities determine that we or any Hong Kong
subsidiary is a PRC resident enterprise for PRC enterprise income tax purposes, our world-wide income could be subject to PRC tax at
a rate of 25%, which could reduce our net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations.
Although dividends paid by one PRC tax resident to another PRC tax resident should qualify as "tax-exempt income" under the
enterprise income tax law, we cannot assure you that dividends paid by our PRC subsidiary to us or any of our Hong Kong subsidiaries
will not be subject to a 10% withholding tax if we or our Hong Kong subsidiary were treated as a PRC resident enterprise. The PRC foreign
exchange control authorities, which enforce the withholding tax on dividends, and the PRC tax authorities have not yet issued guidance
with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income
tax purposes.
If
we are treated as a resident enterprise, non-PRC resident shareholders may also be subject to PRC withholding tax on dividends paid by
us and PRC tax on gains realized on the sale or other disposition of our Class A ordinary shares, if such income is sourced from within
the PRC. The tax would be imposed at the rate of 10% in the case of non-PRC resident enterprise shareholders and 20% in the case of non-PRC
resident individual holders. In the case of dividends, we would be required to withhold the tax at source. Any PRC tax liability may
be reduced under applicable tax treaties or similar arrangements, but it is unclear whether a non-PRC shareholders company would be able
to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC
resident enterprise. Although we are incorporated in the British Virgin Islands, it remains unclear whether dividends received and gains
realized by our non-PRC resident shareholders will be regarded as income from sources within the PRC if we are classified as a PRC resident
enterprise. Any such tax will reduce the returns on your investment in us.
There
are uncertainties with respect to indirect transfers of PRC taxable properties outside a public stock exchange.
We
face uncertainties on the reporting and consequences on private equity financing transactions, private share transfers and share exchange
involving the transfer of shares in our company by non-resident investors. According to the Notice on Several Issues Concerning Enterprise
Income Tax for Indirect Share Transfer by Non-PRC Resident Enterprises, issued by the State Taxation Administration on February 3, 2015,
or SAT Circular 7, an "indirect transfer" of assets of a PRC resident enterprise, including a transfer of equity interests
in a non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct
transfer of PRC taxable properties, if such transaction lacks reasonable commercial purpose and was undertaken for the purpose of reducing,
avoiding or deferring PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and tax filing or withholding obligations may be triggered, depending on the nature of the PRC taxable properties being transferred.
According to SAT Circular 7, "PRC taxable properties" include assets of a PRC establishment or place of business, real properties
in the PRC, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being
a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. When determining if there is a "reasonable commercial
purpose" of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity
interest of the relevant offshore enterprise derives from PRC taxable properties; whether the assets of the relevant offshore enterprise
mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise
and its subsidiaries directly or indirectly holding PRC taxable properties have a real commercial nature which is evidenced by their
actual function and risk exposure; the duration of existence of the business model and organizational structure; the replicability of
the transaction by direct transfer of PRC taxable properties; and the tax situation of such indirect transfer outside China and its applicable
tax treaties or similar arrangements. In respect of an indirect offshore transfer of assets of a PRC establishment or place of business
of a foreign enterprise, the resulting gain is to be included with the annual enterprise filing of the PRC establishment or place of
business being transferred, and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer
relates to PRC real properties or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or
place of business of a non-resident enterprise, a PRC enterprise income tax at 10% would apply, subject to available preferential tax
treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the
withholding obligation. Where the payer fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the
competent tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default
interest. Currently, SAT Circular 7 does not apply to the sale of shares by investors through a public stock exchange where such shares
were acquired in a transaction on a public stock exchange.
We
cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing and
withholding or tax payment obligations and associated penalties with respect to any internal restructuring, and our PRC subsidiary may
be requested to assist in the filing. Any PRC tax imposed on a transfer of our Class A ordinary shares not through a public stock exchange,
or any adjustment of such gains would cause us to incur additional costs and may have a negative impact on the value of your investment
in us.
38
Implementation
of the labor laws and regulations in China may adversely affect our business and results of operations.
Pursuant
to the labor contract law that took effect in January 2008, its implementation rules that took effect in September 2008 and its amendment
that took effect in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying
remuneration, determining the term of employees' probation and unilaterally terminating labor contracts. Due to lack of detailed
interpretative rules and uniform implementation practices and broad discretion of the local competent authorities, it is uncertain as
to how the labor contract law and its implementation rules will affect our current employment policies and practices. Our employment
policies and practices may violate the labor contract law or its implementation rules, and we may thus be subject to related penalties,
fines, or legal fees. Compliance with the labor contract law and its implementation rules may increase our operating expenses, in particular
its personnel expenses. In the event that we decide to terminate some of its employees or otherwise change its employment or labor practices,
the labor contract law and its implementation rules may limit its ability to affect those changes in a desirable or cost-effective manner,
which could adversely affect our business and results of operations. On October 28, 2010, the Standing Committee of the National People's
Congress promulgated the PRC Social Insurance Law, or the Social Insurance Law, which became effective on July 1, 2011. According to
the Social Insurance Law and related rules and regulations, employees must participate in pension insurance, work-related injury insurance,
medical insurance, unemployment insurance, and maternity insurance and the employers must, together with their employees or separately,
pay the social insurance premiums for their employees. If the company has not fully paid such social insurance based on employee's
actual salaries, it may face relevant authorities' investigation and examination, and subject to penalties or fines.
We
expect our labor costs to increase due to the implementation of these laws and regulations, as updated from time to time. As the interpretation
and implementation of these laws and regulations are still evolving and become stricter, PRC tax authorities, for example, may become
the governmental agencies for collection and examination of each company's withholding and payment of social insurance after 2019
according to related rules and policies. We cannot assure you that our employment practice will at all times be deemed in full compliance
with labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If our PRC subsidiaries
are deemed to have violated relevant labor laws and regulations, they can be required to provide additional compensation to their employees
and our business, results of operations, and financial condition could be materially and adversely affected.
Further,
labor disputes, work stoppages or slowdowns at our company or any of our third-party service providers could significantly disrupt our
daily operation or our expansion plans and have a material adverse effect on our business.
PRC
regulations relating to offshore investment activities by PRC residents may limit the ability of WXBJ and WXZJ (our indirect wholly-owned
subsidiaries in China) to increase our registered capital or distribute profits to us or otherwise expose us to liability and penalties
under PRC law.
The
State Administration of Foreign Exchange (SAFE) promulgated the Circular on Relevant Issues Relating to Domestic Resident's Investment
and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 and related rules and regulations
that require PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must
update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information
(including change of such PRC citizens or residents, name, and operation term), increases or decreases in investment amount, transfers
or exchanges of shares, or mergers or divisions. According to the Notice on Further Simplifying and Improving Policies for the Foreign
Exchange Administration of Direct Investment released on February 13, 2015 and amended on December 30, 2019 by the SAFE, local banks
will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration
and amendment registration, under SAFE Circular 37 from June 1, 2015.
If
our shareholders or beneficial owners who are PRC residents or entities (as applicable) do not complete their registration with the local
SAFE branches, our PRC subsidiaries (in particular, the WFOEs) may be prohibited from distributing their profits and proceeds from any
reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to
our PRC subsidiaries (in particular, the WFOEs). Moreover, failure to comply with the SAFE registration described above could result
in liability under PRC laws for evasion of applicable foreign exchange restrictions. However, we may not at all times be fully aware
or informed of the identities of all our shareholders or beneficial owners that are required to make such registrations, and we cannot
compel our beneficial owners to comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders
or beneficial owners who are PRC residents or entities have complied with, and will in the future make or obtain any applicable registrations
or approvals required by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure
by us to amend the foreign exchange registrations of our PRC subsidiaries (in particular, the WFOEs), could subject us to fines or legal
sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries' ability to make distributions or
pay dividends or affect our ownership structure, which could adversely affect our business and prospects.
39
PRC
regulation of direct investment and loans by offshore holding companies to PRC entities may delay or limit us to make additional capital
contributions or loans to our PRC subsidiaries.
We
are an offshore holding company conducting our operations in China through our PRC subsidiaries and the VIEs. We may make loans to our
PRC subsidiary and the VIEs or it may make additional capital contributions to our PRC subsidiaries.
Any
capital contributions or loans that we, as an offshore entity, make to our PRC subsidiaries (in particular, the WFOEs), are subject to
PRC regulations. For example, none of our loans to a PRC subsidiary (in particular, the WFOEs) can exceed the difference between our
total amount of investment and our registered capital approved under relevant PRC laws, or certain amount calculated based on elements
including capital or net assets and the cross-border financing leverage ratio and the loans must be registered with the local branch
of SAFE and the competent departments of State Development and Reform Commission in case of any external debts of more than one year.
Our capital contributions to our PRC subsidiaries (in particular, the WFOEs) must be approved by or filed with the MOFCOM, SAFE, or their
respective local counterpart.
On
March 30, 2015, SAFE issued the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested
Enterprises, or SAFE Circular 19, which took effect on June 1, 2015 and was amended on December 30, 2019. Under SAFE Circular 19, a foreign-invested
enterprise, within the scope of business, may choose to convert its registered capital from foreign currency to RMB on a discretionary
basis, and the RMB capital so converted can be used for equity investments within PRC, provided that such usage shall fall into the scope
of business of the foreign-invested enterprise, which will be regarded as the reinvestment of foreign-invested enterprise.
In
light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies,
we cannot assure you that we will be able to complete the necessary registration or obtain the necessary approval on a timely basis,
or at all. If we fail to complete the necessary registration or obtain the necessary approval, our ability to make loans or equity contributions
to our PRC subsidiaries (in particular, the WFOEs) may be negatively affected, which could adversely affect the liquidity of our PRC
subsidiaries and their ability to fund their working capital and expansion projects and meet their obligations and commitments.
Governmental
control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
The
PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency
out of China. We receive substantially all of our revenues in RMB. Under existing PRC foreign exchange regulations, payments of current
account items, including profit distributions, interest payments, and trade and service-related foreign exchange transactions, can be
made in foreign currencies without prior SAFE approval by complying with certain procedural requirements, but may be subject to internal
rules of related PRC subsidiary's bank (in particular, the WFOEs' capital funds account open in bank), which is also under
the monitor of SAFE. Therefore, our PRC subsidiaries (in particular, the WFOEs) is able to pay dividends in foreign currencies to us
without prior approval from SAFE, but should still comply with bank's related rules. However, approval from or registration with
appropriate government authorities (including formalities in the bank) is required where RMB is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange
control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to
pay dividends in foreign currencies to our shareholders.
Failure
to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject
the PRC plan participants or us to fines and other legal or administrative sanctions.
Pursuant
to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications
to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In the meantime,
our directors, executive officers, and other employees who are PRC citizens or who are non-PRC residents residing in PRC for a continuous
period of not less than one year, subject to limited exceptions, and who have been granted incentive share awards by us, may follow the
Circular on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas
Publicly-Listed Company, or the SAFE Circular 7, promulgated by the SAFE in 2012. Pursuant to the SAFE Circular 7, PRC citizens and non-PRC
citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas
publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could
be the PRC subsidiaries of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution
must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests.
We and our executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than
one year and who have been granted options will be subject to these regulations upon consummation of the Business Combination. Failure
to complete the SAFE registrations may subject them to fines and legal sanctions, and may also limit our ability to contribute additional
capital into our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us. We also face regulatory
uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers, and employees
under PRC law.
40
A
slowdown of the Chinese economy or adverse changes in the economic and political policies of the PRC and the effects of COVID-19 government
could negatively impact China's overall economic growth, which could materially adversely affect our business.
We
are a holding company and substantially all of our operations are conducted in the PRC. Although the PRC economy has grown in recent years,
the pace of growth has slowed, and even that rate of growth may not continue. The annual rate of growth in the PRC declined from 6.9%
in 2015 to 6.7% in 2016, 6.8% in 2017 and 6.6% in 2018. The annual rate of growth further declined to 6.1% in 2019, the lowest since
1990. The annual rate of growth was 2.3% in 2020. Although the growth reached 8.1% in 2021, the growth rate of the first three quarters
of 2022 declined to 3.0%. A slowdown in overall economic growth, an economic downturn or recession, the effects of COVID-19 or other
adverse economic developments in the PRC may materially reduce the demand for the Group's products and may have a material and
adverse effect on its business.
China's
economy differs from the economies of most other countries in many respects, including the amount of government involvement in the economy,
the general level of economic development, growth rates and government control of foreign exchange and the allocation of resources. While
the PRC economy has grown significantly over the past few decades, this growth has remained uneven across different periods, regions
and economic sectors.
The
PRC government also exercises significant control over China's economic growth by allocating resources, controlling the payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or
companies. Any actions and policies adopted by the PRC government could negatively impact the Chinese economy or the economy of the region
our serves, which could materially adversely affect our business.
Substantial
uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations
could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of its operations
and financial condition.
Our
business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government
exerts substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in
China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government of
the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.
However, the government of the PRC may not continue to pursue these policies, or may significantly alter these policies from time to
time without notice. The Chinese economy differs from the economies of most developed countries in many respects, including the level
of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese
government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership
of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive
assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating
industry development by imposing industrial policies. The Chinese government also exercises significant control over China's economic
growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing
preferential treatment to particular industries or companies.
There
are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to,
the laws and regulations governing our business, or the enforcement and performance of our arrangements with borrowers in the event of
the imposition of statutory liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate
a comprehensive system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate
organization and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of
the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not
sufficiently cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because
of the limited volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations
involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.
In addition, there have been constant changes and amendments of laws and regulations over the past 40 years in order to keep up
with the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations
and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain
less developed areas causes uncertainty and may affect our business. Consequently, we cannot predict the future direction of Chinese
legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations
in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced
officials in the agencies and courts in certain areas, may cause possible problems to foreign investors.
41
Fluctuations
in the foreign currency exchange rate between U.S. Dollars and Renminbi could adversely affect our financial condition.
Our
business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements
that we file with the SEC and provide to our shareholders are presented in U.S. Dollars. Changes in the exchange rate between the RMB
and dollar affect the value of our assets and the results of our operations in U.S. Dollars. The value of the RMB against the U.S. Dollar
and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions
and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely
affect our cash flows, revenue and financial condition. Further, our shares offered by this prospectus are offered in U.S. Dollars, and
we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate
between the U.S. Dollar and the RMB will affect that amount of proceeds we will have available for our business.
Future
inflation in China may inhibit economic activity and adversely affect our operations.
The
Chinese economy has experienced periods of rapid expansion in recent years which can lead to high rates of inflation or deflation.
This has caused the PRC government to, from time to time, enact various corrective measures designed to restrict the availability of
credit or regulate growth and contain inflation. High inflation may in the future cause the PRC government to once again impose controls
on credit and/or prices, or to take other action, which could inhibit economic activity in China. Any action on the part of the PRC government
that seeks to control credit and/or prices may adversely affect our business operations.
Risks
Relating to Our Class A Ordinary Shares.
NASDAQ
may apply additional and more stringent criteria for our continued listing.
NASDAQ
Listing Rule 5101 provides NASDAQ with broad discretionary authority over the continued listing of securities in NASDAQ and NASDAQ may
use such discretion to deny apply additional or more stringent criteria for the continued listing of particular securities, or suspend
or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of
the securities on NASDAQ inadvisable or unwarranted in the opinion of NASDAQ, even though the securities meet all enumerated criteria
for continued listing on NASDAQ. In addition, NASDAQ has used its discretion to deny continued listing or to apply additional and more
stringent criteria in the instances, including but not limited to where the company engaged an auditor that has not been subject to an
inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach,
or experience to adequately perform the company's audit. For the aforementioned concerns, we may be subject to the additional and
more stringent criteria of NASDAQ for our continued listing.
We
are an "emerging growth company" and the reduced disclosure requirements applicable to emerging growth companies may make
our securities less attractive to investors.
We
are an "emerging growth company," as defined in the JOBS Act. We may remain an "emerging growth company" until
the fiscal year ended February 8, 2024. However, if our non-convertible debt issued within a three-year period exceeds $1.0 billion or
an annual revenue exceeds $1.235 billion, or the market value of its Class A ordinary shares that are held by non-affiliates exceeds
$700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as
of the following fiscal year. As an emerging growth company, we are not required to comply with the auditor attestation requirements
of section 404 of the Sarbanes-Oxley Act, have reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay
the adoption of new or revised accounting standards that have different effective dates for public and private companies until those
standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company
effective dates. As a result, potential investors may be less likely to invest in our securities.
42
Heshine
will control the outcome of our shareholder actions.
As
of April 18, 2023, Heshine holds 5,032,208 shares of Class A ordinary shares and 2,925,058 shares of Class B shares. Assuming none of
the outstanding warrants has been exercised, holds 51.22% of our aggregate voting power. Heshine's voting power gives it the power
to control actions that require shareholder approval under British Virgin Islands law, our memorandum and articles of association and
Nasdaq requirements, including the election and removal of a majority of our board of directors, approval of significant mergers and
acquisitions and other business combinations, and changes to our memorandum and articles of association.
Heshine's
control may cause transactions to occur that might not be beneficial to direct or indirect holders of our Class A ordinary shares and
may prevent transactions that would be beneficial to you. For example, Heshine's voting control may prevent a transaction involving
a change of control of us, including transactions in which you as a holder of our Class A ordinary shares might otherwise receive a premium
for your securities over the then-current market price. In addition, Heshine is not prohibited from selling a controlling interest in
us to a third party and may do so without your approval and without providing for a purchase of your Class A ordinary shares. If Heshine
is acquired or otherwise undergoes a change of control, any acquirer or successor will be entitled to exercise the voting control and
contractual rights of Heshine, and may do so in a manner that could vary significantly from that of Heshine.
We
are a "controlled company" within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from
certain corporate governance requirements that provide protection to shareholders of other companies.
Assuming
none of the outstanding warrants has been exercised, we are a "controlled company'' as defined under the Nasdaq Stock
Market Rules because Heshine controls more than 50% of our voting rights. For so long as we remain a controlled company under that definition,
we are permitted to elect to rely, and will rely, on certain exemptions from corporate governance rules, including:
●
an exemption from the rule
    that a majority of our board of directors must be independent directors;
●
an exemption from the rule
    that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and
●
an exemption from the rule
    that our director nominees must be selected or recommended solely by independent directors.
As
a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance
requirements.
Our
dual-class share structure with different voting rights and conversion of certain ordinary shares will limit your ability to influence
corporate matters and could discourage others from pursuing any change of control transactions that holders of Class A ordinary shares
may view as beneficial.
We
are a Foreign Private Issuer and we have adopted a dual-class share structure, which includes Class A ordinary shares with one vote per
share and Class B ordinary shares with ten votes per share. Currently Heshine holds 5,032,208 Class A ordinary shares and 2,925,058 Class
B ordinary shares, which accounts for 51.22 % voting power of all issued and outstanding ordinary shares. Consequently, Heshine has considerable
influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election
of directors and other significant corporate actions. Heshine may also take actions that are not in the best interest of the Company
or the Company's other shareholders. In addition to limiting your ability to influence corporate matters, this concentration of
ownership may discourage, delay or prevent a change in control of the Company, which could have the effect of depriving the Company's
other shareholders of the opportunity to receive a premium for their shares as part of a sale of the Company and may reduce the price
of our Class A ordinary shares.
Our
dual-class structure of ordinary shares may adversely affect the trading market for our Class A ordinary shares.
In
2017, S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies
on certain indices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders
hold no more than 5% of total voting power from being added to such indices. In addition, several shareholder advisory firms have announced
their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the
inclusion of our ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate
governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a
less active trading market for our Class A ordinary shares. Any actions or publications by shareholder advisory firms critical of our
corporate governance practices or capital structure could also adversely affect the value of our Class A ordinary shares.
43
Fluctuations
in exchange rates could have a material adverse effect on our results of operations and the value of your investment.
The
value of the RMB against the U.S. dollar and other currencies is affected by changes in China's political and economic conditions
and by China's foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of
pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three
years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within
a narrow band. Since June 2010, the RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. On November
30, 2015, the Executive Board of the International Monetary Fund (IMF) completed the regular five-year review of the basket of currencies
that make up the Special Drawing Right, or the SDR, and decided that with effect from October 1, 2016, RMB is determined to be a freely
usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese yen and
the British pound. In the fourth quarter of 2016, the RMB has depreciated significantly in the backdrop of a surging U.S. dollar and
persistent capital outflows of China. With the development of the foreign exchange market and progress towards interest rate liberalization
and RMB internationalization, the PRC government may in the future announce further changes to the exchange rate system and we cannot
assure you that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult
to predict how market forces or PRC or U.S. government policies may impact the exchange rate between the RMB and the U.S. dollar in the
future.
There
remains significant international pressure on the Chinese government to adopt a flexible currency policy to allow the RMB to appreciate
against the U.S. dollar, especially under the current circumstance of the Sino-US trade conflicts. Significant revaluation of the RMB
may have a material adverse effect on your investment. Substantially all of our revenues and costs are denominated in RMB. Any significant
revaluation of RMB may materially and adversely affect our revenues, earnings, and financial position. To the extent that we need to
convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of the RMB against
the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion. Conversely, a significant depreciation
of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings or the US dollar amount available
to us.
Very
limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into
any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging
transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge
our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict
our ability to convert RMB into foreign currency.
Certain
provisions of the Fourth Amended and Restated Memorandum and Articles of Association may be deemed to have an antitakeover effect.
The
Fourth Amended and Restated Memorandum and Articles of Association may have the effect of delaying, deferring or preventing or rendering
more difficult a change in control of the Company that a shareholder might consider in his or her best interest, including the following:
●
Poison Pill Defenses. Under
    the Companies Law of British Virgin Islands there are no provisions that specifically prevent the issuance of preferred shares or
    any such other 'poison pill' measures. Our Fourth Amended and Restated Memorandum and Articles of Association also do
    not contain any express prohibitions on the issuance of any preferred shares. Therefore, the directors without the approval of the
    holders of Class A ordinary shares may issue preferred shares that have characteristics that may be deemed to be anti-takeover. Additionally,
    such a designation of shares may be used in connection with plans that are poison pill plans.
We
are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions
applicable to U.S. domestic public companies.
On
June 30, 2020, we have made the determination that we qualify as a foreign private issuer under the Exchange Act and filed Form 8-K on
July 1, 2020 to announce our determination. Effective immediately after the filing of this Form 8-K, we began reporting under the Exchange
Act as a foreign private issuer. As a foreign private issuer, we are exempt from certain provisions of the securities rules and regulations
in the United States that are applicable to U.S. domestic issuers, including:
●
the rules under the Exchange
    Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;
●
the sections of the Exchange
    Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;
●
the sections of the Exchange
    Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit
    from trades made in a short period of time; and
●
the selective disclosure
    rules by issuers of material nonpublic information under Regulation FD.
44
We
are required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial
results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with
or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a
U.S. domestic issuer.
We
may be subject to additional reporting requirements if we lose our status as a foreign private issuer.
If
we lose our status as a foreign private issuer at some future time, then we will no longer be exempt from such rules and, among other
things, will be required to file periodic reports and financial statements as if we were a company incorporated in the United States.
The costs incurred in fulfilling these additional regulatory requirements could be substantial.
As
a company incorporated in the British Virgin Islands, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from NASDAQ corporate governance listing standards; these practices may afford less protection
to shareholders than they would enjoy if we complied fully with NASDAQ corporate governance listing standards.
As
a BVI company listed on NASDAQ, we are subject to NASDAQ corporate governance listing standards. However, NASDAQ rules permit a foreign
private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the
British Virgin Islands, which is our home country, may differ significantly from NASDAQ corporate governance listing standards. For example,
neither the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands nor our memorandum and articles of association
requires a majority of our directors to be independent and we could include non-independent directors as members of our compensation
committee and nominating committee, and our independent directors would not necessarily hold regularly scheduled meetings at which only
independent directors are present. To the extent we choose to follow home country practice in the future, our shareholders may be afforded
less protection than they otherwise would under NASDAQ corporate governance listing standards applicable to U.S. domestic issuers.
U.S.
holders of Class A ordinary shares may suffer adverse tax consequences if we were characterized as a passive foreign investment company.
Based
on the current composition of our gross income and assets and on reasonable assumptions and projections, we believe we should not be
treated as a passive foreign investment company (a "PFIC"), for U.S. federal income tax purposes for 2022. However, there
can be no assurance that this will be the case in 2022 or in future taxable years. If we were characterized as a PFIC, U.S. holders of
the Class A ordinary shares may suffer adverse tax consequences such as (i) having gains realized on the sale of the Class A ordinary
shares treated as ordinary income rather than capital gain, not qualifying for the preferential rate otherwise applicable to dividends
received in respect of the Class A ordinary shares by individuals who are U.S. holders, and (ii) having interest charges apply to certain
distributions by us and upon certain sales of the Class A ordinary shares.
ITEM
4. INFORMATION ON THE COMPANY
A.
History and Development
    of the Company
We
were originally a blank check company, known as Wealthbridge Acquisition Limited ("Wealthbridge"), incorporated in the British
Virgin Islands on May 2, 2018 with limited liability (meaning our public shareholders have no liability, as shareholders of the Company,
for the liabilities of the Company over and above the amount paid for their shares) to serve as a vehicle to effect a merger, share exchange,
asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more target businesses.
On May 7, 2020, we consummated the Business Combination contemplated by the Share Exchange Agreement with Lavacano and WBY, pursuant
to which we acquired 100% the issued and outstanding equity interests of Scienjoy Inc. and changed our name to Scienjoy Holding Corporation.
Our
principal executive offices are located at RM 1118, 11th Floor, Building 3, No. 99 Wangzhou Rd., Liangzhu St, Yuhang District, Hangzhou,
Zhejiang Province, China, 311113. Our telephone number at this address is (86) 571 8858 6668. Our registered office in the British Virgin
Islands is located at Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands. Our agent for service of process in the United
States is Cogency Global Inc., located at 122 East 42
nd
Street, 18
th
Floor, New York. Our website is
http://www.scienjoy.com
.
The information on our websites should not be deemed to be part of this annual report. The SEC also maintains a website at
http://www.sec.gov
that contains reports, proxy, and information statements, and other information regarding registration that make electronic fillings
with the SEC using the EDGAR system.
45
History
of Scienjoy Inc.
Scienjoy
Inc. is a holding company incorporated under the laws of the Cayman Islands on February 23, 2017 with authorized shares of 500,000,000
shares at a par value of $0.0001.
Scienjoy
Inc., through its subsidiaries and variable interest entities, is principally engaged in operating its own live streaming platforms in
the People's Republic of China (the "PRC"). In 2014, Scienjoy Inc.'s first live streaming APP Showself Live Streaming
was launched. Scienjoy Inc. subsequently launched "Lehai" in 2015 and "Haixiu" in 2016.
Reorganization
of Scienjoy Inc.
On
January 1, 2018, Tongfang Investment Fund Series SPC ("TF") completed the acquisition of a 65% equity interest in Sixiang
Times (Beijing) Technology Co., Ltd ("Sixiang Times") from NQ Mobile Inc., Ltd. Through the acquisition of Sixiang Times,
TF acquired a controlling position in Holgus Sixiang Information Technology Co., Ltd ("Holgus X"), Kashgar Sixiang Times
Internet Technology Co., Ltd ("Kashgar Times"), Beijing Sixiang Shiguang Technology Co., Ltd. ("SG"), Hai Xiu
(Beijing) Technology Co., Ltd ("HX") and Beijing Le Hai Technology Co., Ltd ("LH").
On
May 18, 2017, Scienjoy Inc. established its wholly owned subsidiary in Hong Kong, Scienjoy International Limited ("Scienjoy HK"),
as a holding company holding all of the outstanding shares of Sixiang Wuxian (Beijing) Technology Co., Ltd ("WXBJ") which
was established in PRC on October 17, 2017 under the laws of the People's Republic of China as a holding company holding all of
the equity interest of Sixiang Zhihui (Beijing) Technology Co., Ltd. ("ZH"), which was incorporated on July 5,2018.
Scienjoy
Inc. established ZH (through WXBJ), as a holding company for purpose of holding all of the outstanding equity interest of Holgus X and
Kashgar Times, as follows:
On
July 18, 2018, Sixiang Times and ZH executed an equity transfer agreement with Sixiang Times. Pursuant to the agreement, 100% equity
interest in Holgus X was transferred to ZH.
On
July 24, 2018, Sixiang Times and ZH executed an equity transfer agreement. Pursuant to the agreement, 100% equity interest in Kashgar
Times was transferred to ZH. In consideration of the transfer, Scienjoy Inc. paid RMB10,000,000 to the former shareholders of Kashgar
Times.
On
November 16, 2018, Sixiang Times and other minority shareholders respectively entered into certain equity transfer agreements with Sixiang
Huizhi (Beijing) Technology Culture Co., Ltd. ("HZ") and Tianjin Sihui Peiying Technology Co., Ltd. ("SY"), and
transferred 100% of the equity interest in SG to HZ, and transferred 100% of the equity interest in HX and LH to HZ and SY. Both HZ and
SY were ultimately controlled by TF.
On
January 28, 2019, HZ and SY executed equity transfer agreement with Zhihui Qiyuan. Pursuant to the agreement, 100% of the equity interest
in SG, HX and LH was transferred to Zhihui Qiyuan, which is ultimately controlled by TF. In consideration of the transfer, Scienjoy Inc.
paid RMB 32,000,000 to HZ and SY.
On
January 29, 2019, Scienjoy Inc., through WXBJ, entered into a series of contractual arrangements ("VIE Agreements") with
Zhihui Qiyuan and its registered shareholders, and in substance obtained control over all equity shares, risks and rewards of SG, HX
and LH through Zhihui Qiyuan. For a description of the VIE agreements pursuant to which Scienjoy Inc. and its subsidiaries were established
as a primary beneficiary of Zhihui Qiyuan, see "Item 4. Information on the Company—C. Organizational Structure—Contracts
that give the Company effective control of the VIEs."
On
January 10, 2020, SG consummated the acquisition of the 100% equity interest in Lixiaozhi (Chongqing) Internet Technology Co., Ltd. ("LXZ")
from its original shareholder for a cash consideration of RMB200 (US$28). We believe the acquisition of LXZ helps to enrich our product
line, expand our user base and capitalize on the growth potential in the live streaming market.
On
May 7, 2020, the Business Combination was consummated. Following our Business Combination, we changed our name from "Wealthbridge
Acquisition Limited" to "Scienjoy Holding Corporation" and continued the listing of our Ordinary Shares on NASDAQ under
the symbol "SJ". Our Public Warrants are traded on over the counter market under the symbol "SJOYW".
On
July 23, 2020, we established Kashgar Sixiang Lehong Information Technology Co., Ltd. ("Kashgar Lehong") through ZH. The
setting up of such company is for the purpose of analyzing the possibility of tax planning in such region.
46
On
August 10, 2020, we signed an Equity Acquisition Framework Agreement (the "BeeLive Acquisition Agreement") with Sciscape
International Limited, Tianjin Guangju Dingfei Technology Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co.,
Ltd.. Pursuant to the BeeLive Acquisition Agreement, we, through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International
Limited which holds the platform BeeLive International and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest
in Tianjin Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required
to pay (i) a cash consideration of RMB50.0 million and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class
A ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions and
requirements over the following three years. On August 21, 2020, all target shares were transferred to the parties designated in BeeLive
Acquisition Agreement. On September 10, 2020, we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology
Co., Ltd. and issued 3,786,719 Class A Ordinary Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently
changed its name to Sixiang Mifeng (Tianjin) Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.
BeeLive is a global live streaming platform that initially launched in China in November 2016. Since the second half of 2019, BeeLive
began expanding into international markets. To date, BeeLive International offers Arabic language live streaming product in the Middle
East and Thai language live streaming product in Southeast Asia.
In
December 2020, we have set up two new subsidiary companies, Holgus Sixiang HaoHan Internet Technology Co.,Ltd. and Sixiang ZhiHui (HaiNan)
Technology Co,. Ltd., and in March 2021, QY has set up a new subsidiary named ZhiHui QiYuan (HaiNan) Investment Co., Ltd. for general
corporate purpose.
On
March 2, 2021, QY established a wholly owned subsidiary Zhihui QiYuan(HaiNan) Investment Co,. Ltd ("QYHN") in Hainan, PRC
to provide information technology service.
In
September 2021, SG set up three subsidiaries, SH, SHWL and HYHF in an effort to enrich the product lines and expand the user base.
On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the "Framework Agreement")
with Golden Shield Enterprises Limited ("Golden Shield"), Beijing Weiliantong Technology Co., Ltd. ("Weiliantong",
together with Golden Shield, the "Target Companies", and each a "Target Company"), Tianjin Yieryi Technology
Co., Ltd. ("Yieryi"), Wolter Global Investment Limited ("Wolter Global", together with Yieryi, the "Sellers",
and each a "Seller") and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) ("Weilaijin"),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the "Hongle Acquisition").
Yieryi and Wolter Global are under common control. The transactions contemplated under the Framework Agreement have closed on January
1, 2022 (the "Closing").
Upon
the closing of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong
and Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the "Weilaijin Share Consideration"), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the "Wolter Global Share Consideration").
In
January 2022, we have set up a new subsidiary company, Sixiang Zhihui (Zhejiang) Culture Technology Co., Ltd. ("ZHZJ") for
general corporate purpose.
In
January 2022, SG consummated the acquisition of the 100% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. ("CDZH")
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. ("HYDC") from its original shareholders for
a cash consideration of RMB100,000 (US$15,692). We believe the acquisition of CDZH and HYDC will help to enrich the product lines, expand
the user base and commercialize the growth potential in the live streaming market.
On
April 7, 2022, Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd.
("QYHZ") and
its several wholly owned subsidiaries were set up in Zhejiang, PRC to provide information technology services.
47
On
April 28, 2022, we have set up a new subsidiary company, Sixiang Wuxian (Zhejiang) Culture Technology Co., Ltd. ("WXZJ")
for general corporate purpose.
On
June 1, 2022, we
through our wholly-owned subsidiary, WXZJ, entered into a series of contractual
arrangements with Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. and its shareholders, thereby  in substance obtained control
over all equity shares, risks and economic benefits of  Xiuli (Zhejiang) Culture Technology Co., Ltd., Leku (Zhejiang) Culture Technology
Co., Ltd., Haifan (Zhejiang) Culture Technology Co., Ltd., Xiangfeng (Zhejiang) Culture Technology Co., Ltd. and Hongren (Zhejiang) Culture
Technology Co., Ltd. The Company will commence its operations in Hangzhou after effecting the agreements under VIE contractual arrangement.
On
May 23, 2022, we changed our address of principal place of business to RM 1118, 11th Floor, Building 3, No. 99 Wangzhou Rd., Liangzhu
St., Yuhang District, Hangzhou, Zhejiang Province, 311113, China.
On
June 30, 2022, WXBJ incorporated a wholly owned subsidiary Sixiang Yingyue (Shanghai) Technology Co., Ltd. ("SXYY"),
in Shanghai, PRC to provide information technology service.
In
July 2022, LXZ was deregistered for general corporate purpose.
On
December 31, 2022, SHWL and SH were sold to certain third parties for a nominal consideration because SHWL and SH have not commenced
any operation since their incorporation.
Adoption
of Dual-class Structure and Authorization of Class A Preferred Shares
On
November 8, 2021, at 10:00 a.m. local time in Beijing, China we held our 2021 annual general meeting of shareholders (the "AGM")
at which the shareholders' resolutions approved: (i) the adoption of a dual-class share structure, pursuant to which the Company's
authorized share capital shall be re-classified and re-designed into Class A ordinary shares and Class B ordinary shares, with each Class
A ordinary share being entitled to one (1) vote and each Class B ordinary share being entitled to ten (10) votes at a meeting of the
shareholders or on any resolution of shareholders; and (ii) the authorization to the Company to issue up to 50,000,000 Class A Preferred
Shares with such designations, powers, preferences and relative, participation, optional and other rights, if any, and such qualifications,
limitations and restrictions as the directors may determine among other matters.
B.
Business Overview
Mission
We
are committed to establishing a mobile entertainment social community where users can enjoy interactive mobile live streaming and asynchronous
social connection.
Overview
We
are a leading provider of mobile live streaming platforms in China and focuses on interactive show live streaming from broadcasters to
users. We have 154,192 active show broadcasters for the year ended December 31, 2022. We had over 300 million registered users by the
end of December 31, 2022, increased from 267.0 million registered users for the year ended December 31, 2021. For the year ended December
31, 2022, the number of paying users was approximately 702,372, decreased 16.4% from 840,640 paying users in fiscal 2021. Before the
BeeLive Acquisition, we operated primarily on three platforms (Showself Live Streaming, Lehai Live Streaming and Haixiu Live Streaming).
Through the BeeLive Acquisition, we added two additional platforms (BeeLive Chinese (MiFeng) and BeeLive International) to our businesses.
Through the Hongle Acquisition, we added one additional platform (Hongle.tv) to our businesses. All our platforms are using our own mobile
applications, and have created a vibrant, interactive, and close community.
We
operate a mobile live streaming business by which it provides live streaming entertainment from professional "broadcasters"
to the end-users, allowing for operation of live social video communities. Using our mobile applications, users can select broadcasters
and enter real time video rooms to interact with them. In addition to the real-time interaction, users can also view photos posted by
broadcasters in their personal pages, leave comments, and engage in private chats with broadcasters when such broadcasters are not streaming.
In addition, users can also play simple, fun games using virtual currencies within the video rooms while watching live streaming of a
broadcaster.
While
users have free access to all real time video rooms, revenue is primarily generated through sales of our virtual currency. Users can
purchase virtual currency on our platforms and can use such virtual currency to buy virtual items for broadcasters to show their support.
We share revenues generated on the platforms with talents agencies, which in turn share revenues with broadcasters. Under the leadership
of our experienced management team, we continue to invest in technology advancement and industry collaboration to expand its user base
and improve its content. We are dedicated to achieving sustainable development and transforming the industry through its bold and creative
live streaming philosophy.
48
We
have achieved significant growth since our inception. The number of registered users of the Company's platforms at year end has
increased from 170.7 million in 2018 to over 300 million in 2022. The platforms' annual ARPPU was RMB 1,963 and RMB2,725 for the
years ended December 31, 2021 and 2022, respectively.
Our
Competitive Strengths
We
believe the following competitive strengths contribute to our success and differentiate us from our competitors:
Multi-Platform
Live Streaming
Starting
in 2014 with the launch of the Showself Live Streaming platform, our user base has grown into one of the largest in China, and now we
are one of the leading show live streaming providers in China. We believe our show live streaming products satisfy users' psychological
needs and decrease users' stress, loneliness, depression, frustration etc. in the real life.
Our
user traffic and revenue spread across multiple products supported by multiple mobile applications. We believe this multi-product approach
increases our competitiveness by allowing us to target different sections of the population simultaneously more effectively, achieve
better traffic matching between users and broadcasters, extend the retention of broadcasters and users on our platforms, and benefit
from user traffic acquisition while mitigating risks of focusing on a single platform. We believe that our already established position
across multiple platforms provides us with the ability to compete effectively for users and a base from which we can expand, either into
additional show live streaming platforms or into other sections of the live streaming market.
As
a pioneer in the live streaming market, we developed our own set of end-to-end (broadcaster-to-user) mobile video solutions. Many of
the systems and technologies we have developed, including, among others, our mobile-compatible animation engine technology, event-driven
asynchronous business processing mechanism, linearly expanding deployment of its servers, modular service development and assembly, high-throughput
parallel messaging service clusters and spam filtering based on machine learning, provide us with competitive advantages. We believe
our existing systems and technologies, supported by its continuing efforts in technology innovation, including with regard to augmented
reality/virtual reality ("AR/VR"), artificial intelligence ("AI"), big data technology, machine learning and
physics engine technology, provide us with the necessary technical skills to compete and expand in this rapidly changing industry.
Innovative
Product Features and Operating Philosophy
Our
product offerings include numerous innovative features designed to improve user experience, increase user-stickiness, and enhance its
monetization ability. These include, among others:
●
gamified product and operating
    philosophy that enable users to enjoy the exciting alternative life in the mobile live streaming virtual world. In this virtual world,
    users can enjoy the real interactive activities with broadcasters and also build their virtual life.
●
a range of online games
    for users to play while watching streaming. These include simple, fun games like pet run, crazy racing and gold egg smashing. Users
    pay virtual currency to play games for a chance to hit a virtual currency jackpot or win virtual goods that they can then send to
    broadcasters who can then monetize the goods. These games enhance user engagement during live streaming and encourage and facilitate
    the use of virtual currency and virtual goods.
●
both real-time streaming
    and asynchronous social functions. Users of our platforms can communicate with broadcasters and other users not only when broadcasters
    are streaming, but also afterwards through sending private texts and photos, and commenting on photos posted on the personal pages
    of specific broadcasters. This allows users to interact with broadcasters and their communities any time they wish.
Strong
Data Analytics Capabilities
The
ability to understand market traffic and pair users with suitable broadcasters and activities is key to driving user stickiness and monetization
in the mobile live streaming industry. We are able to use analytics-driven operational capabilities to understand individual user behavior
and larger industry trends. This allows us to better guide individual users to appropriate broadcasters, adjust the platform interface
to guide user traffic throughout the broadcasters while maintaining user experience, and analyze traffic on other sites such as network
alliances to select the best methods and targets for traffic acquisition. Our data insights and strong technological capabilities enable
us to innovate and optimize products on an ongoing basis and allow us to precisely operate Our platforms based on large quantities of
statistics collected and analyzed.
49
Experienced
Management Team and Professional Staff with Strong Operational Capabilities
Our
senior management team has extensive experience working with the mobile Internet, in related computer-technology industries, big data
analysis, and cutting-edge technologies. Members of our senior management team have experience of over 20 years in various segments of
the technology, business operation, and Internet industries. Under the leadership of its senior management members, we have successfully
identified trends in mobile streaming and timely seized opportunities for growth and innovation.
Our
management team has extensive experience and skill in research and development, quality control, and Internet infrastructure and operations.
We believe that as mobile streaming matures, strong operational and execution capabilities will become increasingly important to remaining
competitive and our strong team with years of relevant experience will provide us with a competitive advantage.
Our
Strategies
Our
business objective is to further strengthen our position in the mobile show live streaming industry and to leverage our existing position
to expand its business into other related industries in China and oversea markets. Looking forward, we will seek to make use of "live+",
explore entertainment online-merge-offline (OMO) models, integrate resources across the industry value chain, and build an ecosystem
of mobile live streaming, all to meet the diverse needs of users. We intend to implement the following strategies:
Provide
More Engaging and Professional Content
We
will keep introducing more engaging content to retain users and further boost users' willingness to purchase virtual goods. Although
most broadcasters working in the live streaming industry provide various entertainments for users, the content provided is generally
not as professional as traditional performers. Therefore, there is still an opportunity for us to cooperate with more traditional artists
and to train our broadcasters to produce a more professional product.
Further
Expand Our Mobile Live Streaming Business in China and Overseas
We
intend to update our mobile applications to allow for easier content creation and sharing by our users. We believe that the convenience
offered will continue to improve user stickiness and develop into a destination for social interactions. Meanwhile, our multiple platforms
can serve a broad range of potential end markets. We plan to integrate our registered user accounts across multiple mobile applications
into a unified account system. We believe this will lead to a virtuous cycle: the resulting higher user engagement level would provide
us with more opportunities to cross-promote its products and gather incremental user data for further product optimization and development.
We
have plans to expand our business globally. We have obtained considerable experience in mobile live streaming industry and plans to promote
its mobile live streaming platform in Southeast Asia, Middle East and South America. On August 10, 2020, we signed an Equity Acquisition
Framework Agreement (the "BeeLive Acquisition Agreement") with Sciscape International Limited, Tianjin Guangju Dingfei Technology
Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co., Ltd.. Pursuant to the BeeLive Acquisition Agreement, we,
through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International Limited which holds the platform BeeLive International
and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest in Tianjin Guangju Dingfei Technology Co., Ltd. which
holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required to pay (i) a cash consideration of RMB50.0 million
and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class A ordinary shares) to be issued by the Company.
30% of share consideration payments are subject to certain performance conditions and requirements over the following three years. On
August 21, 2020, all target shares were transferred to the parties designated in BeeLive Acquisition Agreement. On September 10, 2020,
we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology Co., Ltd. and issued 3,786,719 Class A Ordinary
Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently changed its name to Sixiang Mifeng (Tianjin)
Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited. BeeLive is a global live streaming
platform that initially launched in China in November 2016. Since the second half of 2019, BeeLive began expanding into international
markets. To date, BeeLive International offers Arabic language live streaming product in the Middle East and Thai language live streaming
product in Southeast Asia.
On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the "Framework Agreement")
with Golden Shield Enterprises Limited ("Golden Shield"), Beijing Weiliantong Technology Co., Ltd. ("Weiliantong",
together with Golden Shield, the "Target Companies", and each a "Target Company"), Tianjin Yieryi Technology
Co., Ltd. ("Yieryi"), Wolter Global Investment Limited ("Wolter Global", together with Yieryi, the "Sellers",
and each a "Seller") and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) ("Weilaijin"),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the "Hongle Acquisition").
Yieryi and Wolter Global are under common control. The transactions contemplated under the Framework Agreement have closed on January
1, 2022 (the "Closing").
50
Upon
the closing of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong
and Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the "Weilaijin Share Consideration"), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the "Wolter Global Share Consideration").
Hongle.tv
is a similar mobile apps to our existing four platforms, "Showself" (秀色直播), "Lehai"(乐嗨),
"Haixiu" (嗨秀), and BeeLive Chinese ("MiFeng" 蜜疯直播). Such platforms
are launched in China in Chinese language. The only differences as compared to the four said platforms are that 1) The said four platform
are viewed on the mobile apps with broadcasters occupying half of the screen at the top while comments and social chat at the bottom
while in Hongle.tv, broadcasters occupying the full page of the screen; 2) The said four platforms are targeted at general public while
Hongle.tv is focused on younger generations especially university students.
Diversify
the Live Streaming Business
After
years of development in the field of live video broadcasting, we have rich experience in technology, research and development, product
promotion, and other aspects of live streaming platforms operations. Since its formation, we have focused on operating show live streaming
platforms. Going forward, in addition to continuing to establish its position in this segment, we plan to leverage its relevant expertise
to expand its business into undeveloped areas based on its current user base, broadcasters, and partners.
First,
we would like to develop our advertising business model by providing the market with comprehensive advertising proposals, combining traditional
banners and video commercials with operative events and virtual items. We plan to acquire new media advertising companies or teams to
promote our advertising business which focuses on brands suitable for our user profiles.
Secondly,
we would like to provide value-added services for our broadcasters and users. Since the inception of our business, we have partnered
with approximately 300,000 broadcasters. Many of these broadcasters desire to improve their physical looks. We find it a good business
opportunity to provide a fee-based platform which will refer broadcasters to appropriate appearance enhancement hospitals. In addition,
since we have a large number of users who live in lower tier cities and have demands in various professional area, such as investment,
high-end tourism, children's international education and healthcare. We can build a sustainable referral business for our users
as well.
Thirdly,
we would like to build up our ecommerce business, which will be combined with our existing live streaming business. In this new business
model, our broadcasters may introduce to their viewers the products sold on our platforms. We possess comprehensive live streaming technologies,
including artificial intelligence and big data, and believe we have technical capacity and expertise to combine ecommerce business with
our live streaming business. To achieve this we have plans to strategically partner with suitable ecommerce platforms and jointly build
up our ecommerce business based on our current technologies, broadcasters' network and users base.
Explore
Technology Services Business
Our
income has historically come from sales of virtual currency to users. Almost 100% of our total revenue has derived from the sale of virtual
items and virtual currency with respect to its live streaming business. Going forward, we plan to leverage our expertise and user base
to expand its revenue sources. In particular, we have plans to enter into cooperative arrangements with smaller live-streaming team,
through which we will provide such platforms with technology, operation and maintenance and promotional support services in return of
revenue sharing.
51
Continue
to Invest in and Develop Technologies Such as Virtual Reality (VR)/Augmented Reality (AR) and Artificial Intelligence (AI)
We
intend to continue to invest in our data analytics capabilities and cutting-edge technologies. We also plan to further develop our technology
stacks, including, but not limited to, machine learning, physics engine, AR/VR, and AI technologies to better understand and anticipate
user behavioral trends, which in turn can be applied to the development of our applications.
Tap
into the Next Phase of Explosive Industry Potential through M&A
Mergers
& Acquisitions will be one of crucial strategies to expand our business swiftly, which support rapid execution of each element
of our business growth. The targeted sectors include related high-tech companies, data analysis companies, live streaming companies
(especially oversea targets), new media advertising companies, and beauty industry related companies. We have consummated the
BeeLive Acquisition in 2020 and the Hongle Acquisition recently.
Our
Platforms
We
operate our live streaming communities through multiple platforms, each with our own mobile applications. After the recent successful
acquisition of Beelive, we currently operate primarily six platforms: Showself Live Streaming, Lehai Live Streaming, Haixiu Live Streaming,
BeeLive Live Streaming Chinese (MiFeng), BeeLive International, and Hongle Live Streaming. These platforms together make us the leading
provider of mobile show live streaming.
Showself
Live Streaming
Showself
Live Streaming is our first live streaming platform and remains the most popular of our platforms in terms of registered users and revenue.
The platform was first launched in April 2014. Showself Live Streaming is widely accessible to most mobile internet users in China because
our live streaming-enabled features only require minimal bandwidth. The following is the typical screenshot for the mobile application
of Showself Live Streaming.
52
Lehai
Live Streaming
Lehai
Live Streaming was launched in July 2015 and adheres to the concept of "having fun together." The following is the typical
screenshot for the mobile application of Lehai Live Streaming (the iOS version may vary).
53
Haixiu
Live Streaming
Haixiu
Live Streaming was launched in April 2016 and is our third platform. The following is the typical screenshot for the mobile application
of Haixiu Live Streaming (the iOS version may vary).
54
BeeLive
Chinese (MiFeng)
BeeLive
Chinese (MiFeng) was launched in mainland China in November 2016. The following is the typical screenshot for the mobile application
of BeeLive Chinese (MiFeng) (iOS version may vary).
55
BeeLive
International
BeeLive
International was launched in second half of 2019. It provides Arabic language service covering the Middle East and Thai language service
covering Southeast Asia and Middle East. The following are two typical screenshots for the mobile application of BeeLive International
in Arabic and Thai, respectively (iOS version may vary).
56
57
Hongle
Live Streaming
Hongle
Live Streaming was launched in mainland China in 2016. The company acquired such platform in January 2022. The following is the typical
screenshot for the mobile application of Hongle Live Streaming (Hongle). (iOS version may vary).
58
Key
Differences among the Platforms
All
six platforms are categorized as "show live streaming" in which professional broadcasters provide live streaming entertainment
for users primarily in the form of performances (singing, dancing, talk shows, etc.). Broadcasters on all six platforms have been trained
by broadcaster agents to provide content more professional than that of average amateur broadcasters. Due to different broadcasters,
user and geographical bases, the six platforms differ in their operation strategies, including the followings:
●
Showself is our largest
    platform. Because of the large number of broadcasters and users base, Showself has capacity to organize different talent shows and
    events, such as singing, poem writing and traditional Chinese opera.
●
As compared to Showself,
    Lehai and Haixiu have less users who are likely to spend money on live streaming shows. As such, in addition to live streaming shows,
    Lehai and Haixiu offers more free games or games that do not require much spending.
●
BeeLive Chinese (MiFeng),
    compare to other Chinese platforms, focus more on the need of social communications of our users, therefore people tend to use them
    more often as a tool of communication with friends and peers.
●
On BeeLive International,
    more users choose to become broadcasters where they can perform talent show themselves in front of other users and in turn receive
    revenue sharing fee from them.
●
Hongle Live Streaming,
    in comparison with our other domestic platforms, more focuses on enabling ordinary people to broadcast timely with their mobile phones.
    As a result, comparably, it has a broader mobile broadcaster base and its broadcasters tend to be much younger.
Layout
and functions of the mobile application of our Platforms
The
layout and functions of the mobile applications of our platforms are substantially the same. The above screenshots and descriptions illustrate
the layout and some of the basic functions of the Showself Live Streaming application:
●
Square.
This page serves as a menu for currently streaming broadcasters. Users can search this page for broadcasters they want
        to watch. For users who do not already know any broadcasters or have no existing preference as to which broadcasters they want
        to watch, several groupings of broadcasters who are conducting ongoing live streaming are presented in the square under different
        headings to help viewers find a broadcaster they will enjoy. These groupings are organized under different labels, such as recommended
        broadcasters (based on comprehensive analysis and mining of user-specific data such as user's location, login time, retention,
        daily activity, and consumer behavior), broadcasters located in the same city as the users, broadcasters currently followed by
        the user, broadcasters recently viewed by the user, and broadcaster "PK" (broadcasters currently competing against
        each other in terms of value of gifts received within ten minutes), and other labels.
Broadcasters'
    names, number of current online viewers, and grade based on the value of gifts received by such broadcaster along with a snapshot
    of the current stream are provided on the pages for viewers' use in selecting a broadcaster. These pages are updated with a
    new batch of broadcasters with every refresh by users, presenting them with a wider range of broadcasters to choose from. For new
    users, this interface provides them with an easy way to start exploring the platform. For existing users, broadcasters with closest
    relationship in terms of chat frequency and value of gifts sent are always presented in the first page of the square if the broadcaster
    is online and this makes it easier for users to closely watch live streaming of broadcasters they have followed. In all cases, clicking
    on a broadcaster's picture will take users to a real time video room from which they can view and interact with the broadcaster.
59
●
Ranking Lists.
This
    page presents lists of top broadcasters by various criteria, including highest value of gifts received by the broadcasters (on a
    daily, weekly, monthly and all-time basis) and greatest number of virtual flowers or the specially designated weekly "star
    gifts." Received by broadcasters. These ranking lists provide further information to viewers about broadcasters' popularity
    to help them identify top broadcasters and can also motivate users to support their favorite broadcasters on the list. This also
    promotes positive competition between broadcasters. The page also contains lists of viewers (by account name) that have spent the
    highest amount of virtual currency in the last day, week, month and all-time.
●
Guardian Teams.
Guardian
    teams are small groups of users organized by users with sufficient high user grades and which other users can join. This function
    allows small groups of like-minded users to interact online, form friendships, and support their favorite broadcasters as a group.
    This encourages user engagement and active participation. This also helps to improve user experience and enhance users' paying
    willingness. The guardian team page shows rankings of guardian teams by various criteria, including highest value of virtual currencies
    spent by guardian teams (on a daily and all-time basis) and the value of gifts received by the broadcasters from top guardian teams
    (on a weekly and bi-weekly basis).
●
Discovery.
This
    page allows users to follow photos posted by broadcasters and activities organized by the platform. It is also the page through which
    users can purchase virtual items using "Xiu Bi," the virtual currency used on the platform.
●
Me.
Users
    can check and manage their personal accounts through this page. Personal account information displayed mainly includes the broadcasters
    by such users, current virtual currency balance, virtual items purchased, guardian teams to which the users belong and intimate broadcasters
    list.
Content
on Our Platforms
We
have a number of live broadcasting platforms. They provide entertainment content for users and have actively explored new entertainment,
new agency, and other fields in the upstream and downstream industry, combining entertainment, agents, and mobile Internet to create
online entertainment online-merge-offline ("OMO"). For the agents, the platforms provide support for product activities,
brand building, management empowerment, data support, and technical tools, and help it clarify its development path and strategy from
the perspective of industry analysis. For the broadcasters, the platforms have provided training through agents for items such as stage
decoration, lighting, music, attire, makeup, costumes, talent skills (such as singing, dancing, talk show and musical instruments), communication
skills, and service awareness. The platforms, agents, and broadcasters rely on each other and bridge the path for each other to build
a healthy and stable entertainment ecology.
For
us, the establishment of a content security system is not only a means of defense but also a strong strategic offense. Through AI technology,
image recognition, big data analysis, combination of artificial audit, the platforms have a vertical monitoring system to monitor all
live streaming content 24/7 to ensure that the content is legal and in compliance, and is providing the best service to every user at
the same time, creating a refreshing and delightful user experience to increase its revenue.
Quality
and engaging content is the core of our development. One way for us to offer engaging content is to organize a variety of original shows
on our platforms, such as "Singer Alliance," "Run Ms. Cang Run" and "King of Brain PK." Secondly,
our platforms make efforts to support talented broadcasters by organizing special shows for these broadcasters such as "Crown of
Weekly Star" and "The Showself Voice." Thirdly, our platforms continue to expand their shows to new areas such as traditional
opera and intangible cultural heritages. These shows include the live streaming series of "Revisiting the Intangible Cultural Heritage,"
"Beauty of Quintessential Chinese Culture," and "I Write a Love Poem for My Hometown."
Our
Users
We
have an active and well-structured user base. In 2014, we transformed ourselves from a social network platform to a show live streaming
platform. Since then, we have experienced increased broadcasting competition and refined our operations. We have also accumulated a diversified
user group through constant innovation and promotion. Throughout December 31, 2021 up to December 31, 2022, the number of registered
users on our platforms have reached over 300 million.
60
We
do not limit ourselves to acquiring users solely through self-growth fission or third-party marketing. Instead, we adopt the model of
win-win game to achieve stable and mutually beneficial expansion of our user base. In 2022, the number of paying users for our platforms
was 702,372 and their average revenue per paid user (ARPPU) for fiscal 2022 was RMB2,725.
To
mitigate any concentration risks from a single user group structure, we have been working on to develop a diversified base of user groups,
which include young active users with short interest span as well as users in their thirties with high spending power. In addition, a
considerable number of our users are located in economically developed areas with more leisure life styles. These users have relatively
high disposable income and more leisure time. They tend to appreciate online entertainment more and are willing to spend money on online
entertainment.
Our
Broadcasters
The
supply of talented and popular broadcasters is essential to us, particularly given our focus on developing professionally generated content.
Broadcasters serve as the primary interface with users and, therefore, the success of our platforms depend largely on the talent and
popularity of the broadcasters.
Engagement
of Broadcasters
We
primarily cooperate with online and offline broadcaster agents, or the talent agents, to recruit and manage broadcasters on an ongoing
basis. Each of the platforms also has an online application process for registered users to become broadcasters and we will select certain
applicants and refer them to the appropriate talent agents. As such, we enter into all contracts with the talent agents, as opposed to
with each broadcaster on an individual basis.
Before
broadcasting on the platform, all broadcasters must agree to the terms and conditions of our platforms, which includes the rules of the
platforms that the broadcasters must abide by while live streaming and also the legal consequences for violation of the rules. If any
such violations occur, we will hold the broadcasters directly liable.
For
selected broadcasters we identify as popular or having great potential or offering high-quality content, in addition to the above two
agreements, we will separately enter into an exclusivity agreement with each such broadcasters, which requires that the broadcasters
can only live stream on our platforms exclusively for a certain period of time. In return, we provide more resources and support to such
broadcasters by recommending their contents to potential interested users, increasing user traffic, and improving their popularity. We
will be entitled to sizeable liquidated damages if the broadcasters breach the exclusivity agreement.
Cooperation
with the Talent Agencies
Talent
agencies recruit broadcasters and provide live streaming content to us. We share revenue with the talent agencies, who pay salaries to
or share fees with their broadcasters. Talent agencies are also responsible for educating and training the broadcasters on live streaming
skills and techniques, such as dress codes, room settings and communication skills. As a result, talent agencies help broadcasters to
better present their live streaming content. The use of talent agencies also frees us from direct dealings with the broadcasters.
Monitoring
and Management of Broadcasters
We
set out rules with which broadcasters must comply with while using our platforms, including compliance with laws and regulations of the
PRC, no performances involving guns, knives or threats to lives, no infringement of legal rights of others and no pornography.
We
have the right to monitor and manage the performances of any broadcasters on our platforms. Appropriate measures are taken with respect
to any broadcasters that fail to comply with the above mentioned rules. Such measures range from warnings and fines to temporary or permanent
suspension from our platforms, and can be taken unilaterally by us as we deem fit. Since broadcasters are represented by agents, notice
of any illegal behavior or violations of platform rules will also be made to the relevant agent. The relevant agent is required to correct
any such violation upon receipt of the notification. If the violation is not corrected during the applicable grace period, we have the
right to terminate our cooperation with the relevant agent.
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Marketing
Our
marketing and promotional strategy includes, among others, the use of third-party marketing channels to both promote our platforms and
acquire users. These marketing channels primarily include advertising agencies which provide us with market visibility and numerous opportunities
to attract new users. We typically enter into one-year framework agreements with such advertising agencies which require us to purchase
a minimum aggregate amount of advertising during the terms of the agreements. The advertisements are either display-based or performance-based,
and are priced primarily based on cost-per-download, cost-per-time, cost-per-activation or cost-per-click. We are generally able to monitor
the performance and effectiveness of the advertisements directly or through the advertising agencies.
We
use mobile application platforms, such as the Apple App Store and Android App Download Centers, to dispense and showcases our mobile
platforms to a wide audience as well as to advertise the positive customer feedback which our platforms have received. Users can download
the apps from these application platforms for free. Users are also able to review and rate our applications through these platforms.
Quality
Control and Content Monitoring
We
have programmers with extensive application testing experience who systematically test our platforms to ensure that they conform to our
standards. We are also required under PRC laws and regulations, such as the Administrative Provisions on Mobile Internet Applications
Information Services, to monitor content on our platforms.
We
have developed a comprehensive technology to screen content on our applications against a filter list, item by item. The filter list
compiles content and behaviors that we have determined, taking into account relevant PRC laws and regulations, to be likely to be indicative
of inappropriate, politically-sensitive, provocative or inflammatory language, sexually-suggestive language and body movements, full
or partial nudity or illegal content or activities, abusive language or actions towards other users, spam, scams, or acts and threats
of violence. Content identified as falling into the filter list would be blocked or removed from our platforms. In addition, we regularly
review any complaints alleging the inappropriate nature of content on our platforms and remove such content promptly.
Broadcasters
are also responsible for monitoring the content in their rooms and ensuring that their rooms comply with applicable laws and regulations
and terms of our service. Broadcasters can block users who transmit inappropriate information from posting comments in their rooms or
exclude users from their rooms. Broadcasters also have the ability to promote certain users to act as moderators to help manage rooms
in this way. We also monitor and take measures to deal with any infringements of our content policies by broadcasters.
Payment
Users
are able to purchase virtual items we sell on our platforms by using virtual currency. Generally, users purchase virtual currency from
third-party distributors with which we have entered agreements. Users are also able to purchase virtual currency directly from our platforms
using various payment channels such as Alipay and WeChat Pay. Once users have purchased such virtual currency, they are able to purchase
virtual items. Once purchased, such virtual currency or virtual items cannot be returned in exchange for cash and we do not provide users
with a right of refund of any kind.
Our
Technology
We
possess technological infrastructure and capacity that supports increasing operational efficiency, enabling innovations, and outperforming
our competitors.
●
AI And Big Data Analysis
:
    by using data and AI technology, we analyze user behavioral data. Through the results of such data analysis, we can better understand
    users' needs and know how to better match content with users. These operations help us improve our user experience as well
    as paying ratio and ARPPU.
●
Live Streaming Technology
:
    We have a complete peer to peer (the host starts to stream video for the user to play) live mobile video solution with independent
    intellectual property rights, and it is being constantly optimized. On the user end, we have made special optimization for video
    streaming playback processing in combination with CDN service providers, which supports fast video download and opening, reasonable
    buffering to reduce the Caton rate, so as to ensure a smooth experience for users.
62
●
Video Monitoring
    Technology
: this specially developed monitoring program can carry out real-time video monitoring for all video streams in
    combination with AI technology, and create a three-dimensional content monitoring system in combination with 24-hour continuous manual
    audit to discover potential violations and block applicable content.
●
Server and Infrastructure
:
    by using the situation awareness security service provided by Alibaba cloud and combined with the self-built monitoring platform,
    we can alert the system of abnormal phenomena and prevent virus and hacker intrusion.
Intellectual
Property
We
regard our software copyrights, domain names, trademarks and other intellectual property as critical to our success. As of April 18,
2023, we have registered 242 copyrights in China, 19 domain names, 10 patents for live streaming technology, and 104 trademarks including
the Showself, Haixiu, and Lehai logos.
We
rely on trademark and copyright law, trade secret protection, non-competition and confidentiality and/or license agreements with our
employees, customers, partners and others to protect our intellectual property rights. In general, our employees must enter into a standard
intellectual property and confidential agreement which acknowledges that (1) all inventions, trade secrets, developments and other processes
generated by employees on our behalf are our property, and such employees are assigning to us any ownership rights they may claim in
those work; and (2) such employees undertake to keep confidential all information related to our methods, business and trade secrets
during and for a reasonable time after their employment with us.
Competition
We
focus on show live stream model and in this area we face significant competition from providers of similar online streaming services.
Our competitors in the mobile live streaming market in China include other providers of show live streaming products, such as Hello Group
and JOYY, as well as other pan-entertainment streaming platforms such as Inke, Huafang, and gaming streaming DOYU and HUYA. We compete
to promote our products and gain users, to attract and hire management personnel with operational experience, and to secure diversified
marketing channels.
Legal
Proceedings
In
March 2022, Beijing Weiliantong Technology Co., Ltd. ("Weiliantong"), one of our PRC subsidiaries was sued in a litigation
brought by certain individual ("WLT Litigation") in Wuyuan County People's Court, Inner Mongolia Autonomous Region,
China. In the WLT Litigation, Weiliantong was named as a joint defendant together with a broadcaster of the Hongle.tv live streaming
platform, which was operated by Weiliantong. In this case, one of the reliefs demanded by the plaintiff was a refund in the amount of
RMB2,113,879 and accrued interest to the plaintiff. On November 25, 2022, in the judgment made by the first instance trial court, the
court ruled in favor of the plaintiff and determined that Weiliantong should refund such amount of RMB2,113,879 and accrued interest
to the plaintiff. Weiliantong subsequently appealed on December 9, 2022 in Bayannur City Intermediate People's Court, Inner Mongolia
Autonomous Region, China. Currently, this case is still in the process of the second instance trial.
Except
for above mentioned WLT Litigation, we are currently not a party to any material legal or administrative proceedings. We have been and
may become a party to a various legal or administrative proceedings arising in the ordinary course of our business, including matters
relating to contractual disputes. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to
result in substantial cost and diversion of our resources, including our management's time and attention. See "Item 3. Key
Information—D. Risk Factors—Risk Factors Relating to Our Business and Industry—We may be held liable for information
or content displayed on, retrieved from or linked to our platforms, or distributed to our users if such content is deemed to violate
any PRC laws or regulations, and PRC authorities may impose legal sanctions on us," and "Item 3. Key Information—D.
Risk Factors—Risk Factors Relating to Our Business and Industry—We may be subject to intellectual property infringement claims
or other allegations by third parties for information or content displayed on, retrieved from or linked to our platforms, or distributed
to our users, or for proprietary information appropriated by former employees, which may materially and adversely affect our business,
financial condition and prospects."
63
REGULATIONS
IN PRC
This
section summarizes the principal current PRC laws and regulations relevant to our business and operations
.
As
the live streaming industry is still at an early stage of development in China, new laws and regulations may be promulgated from time
to time to introduce new regulatory requirements, including but not limited to, requirements of obtaining new licenses and permits in
addition to those we currently have. There are substantial uncertainties with respect to the interpretation and implementation of current
and future PRC laws and regulations, including those applicable to live streaming industries and our business. This section sets forth
a summary of the most significant laws and regulations that are applicable to our current business activities in China and that affect
the dividends payment to our shareholders.
Regulations
Relating to Telecommunications Services
In
September 2000, the State Council issued the Regulations on Telecommunications of China, or the Telecommunications Regulations, as amended
on July 29, 2014 and February 6, 2016, to regulate telecommunications activities in China. The Telecommunications Regulations set out
basic guidelines on different types of telecommunications business activities in China. According to the Catalog of Telecommunications
Business (2015 Amendment) implemented on March 1, 2016 (as amended on June 6, 2019), Internet information services constitute a type
of value-added telecommunications service. The Telecommunications Regulations require operators of value-added telecommunications services
to obtain value-added telecommunications business operation licenses from Ministry of Industry and Information Technology (the "MIIT"),
or its provincial branches prior to the commencement of such services.
The
Regulations for the Administration of Foreign-Invested Telecommunications Enterprises, or the FITE Regulations, which took effect on
January 1, 2002 and were amended on September 10, 2008 and February 6, 2016, regulate foreign direct investment in telecommunications
companies in China. The FITE Regulations stipulate that foreign investors are generally prohibited from holding ultimately more than
50% of equity interest in a foreign-invested enterprise that provides value-added telecommunications services, including, among others,
provisions of Internet content. In addition, foreign investors are required to have sufficient experience operating value-added telecommunications
business when applying for the MIIT's value-added telecommunications business operation license.
On
July 13, 2006, the Ministry of Information Industry (which is the predecessor of MIIT) issued the Circular on Strengthening the Administration
of Foreign Investment in Value-added Telecommunications Services, or the MIIT Circular 2006, which provides that (a) foreign investors
can only operate a telecommunications business in China through telecommunications enterprises with a valid telecommunications business
operation license; (b) domestic license holders may not rent, transfer or sell telecommunications business operation licenses to foreign
investors in any form or provide any foreign investors with resources, venues or facilities to promote unlicensed operations of telecommunications
businesses in China; (c) value-added telecommunications service providers or their shareholders must directly own the domain names and
registered trademarks that are used in their daily operations; (d) each value-added telecommunications service provider must have necessary
facilities for its approved business operations and maintain such facilities in the geographic regions specified in its license; and
I all value-added telecommunications service providers should improve their network and information security, establish a relevant information
safety system and set up emergency plans to ensure network and information safety.
According
to the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2021 version) (the "Negative List")
promulgated jointly by the MOFCOM and the National Development and Reform Commission (the "NDRC") on December 27, 2021, the
Foreign investors are prohibited from making any investments in the industries which are listed as "prohibited" in the Negative
List; and, after satisfying certain additional requirements and conditions as set forth in the Negative List, are allowed to make investments
in the industries which are listed as "restricted" in the Negative List. For any foreign investor that fails to comply with
the Negative List, the competent authorities are entitled to ban its investment activities, require such investor to take measures to
correct its non-compliance and impose other penalties. The internet content service, internet audio-visual program services and online
culture activities are subject to foreign investment restrictions/prohibitions set forth in the Negative List.
Regulations
Relating to Internet Information Services
The
Administrative Measures on Internet Information Services (the "ICP Measures") issued by the State Council on September 25,
2000 and amended on January 8, 2011, regulate provisions of Internet information services in the PRC. According to the ICP Measures,
Internet information services refers to provisions of information through the Internet to online subscribers, including commercial and
non-commercial services. Pursuant to the ICP Measures, commercial Internet information service providers shall obtain ICP Licenses from
relevant PRC local authorities before engaging in commercial Internet information services in China. The Measures for the Administration
of Telecommunications Business Licensing issued by Ministry of Information Industry on June 21, 2017 and effective on September 1, 2017
further provides the requirements and formalities regarding application for value-added telecommunications business operation licenses,
which is also regarded as the guideline for application for ICP License in local competent authorities. In addition, according to relevant
PRC laws, administrative regulations or rules, providers of Internet information services in respect of news, publishing, education,
medical treatment, health, pharmaceuticals or medical apparatuses shall obtain consent of the relevant PRC competent authority before
applying for an operating permit or carrying out record-filing procedures.
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Additionally,
the ICP Measures and other relevant measures also prohibit publication of any content that propagates, among others, obscenity, pornography,
gambling and violence, incite the commission of crimes or infringe upon the lawful rights and interests of third parties. If an Internet
information services provider detects that information transmitted on its system falls under the specified prohibition, such provider
must immediately terminate the transmission and delete the information and report it to the government authorities. Any provider's
violation of these prohibitions, in serious cases, will lead to revocation of its ICP License and shutdown of its Internet systems.
According
to the Online Live Streaming Regulations published by on November 06, 2016 and effective on December 01, 2016, online live streaming
service providers and online live streaming publishers that provide internet news information services without licenses, or exceeding
the scope of their licenses, are subject to punishment by the CAC and the internet information offices at the level of provinces, autonomous
regions, or municipalities directly under the Central Government in accordance with the Regulations for the Administration of Internet
News Information Services which may include an order to cease such services. Other violations of the Online Live Streaming Regulations
are subject to punishment by the national and local internet information offices in accordance with PRC laws; if such violations constitute
crime, criminal liability shall be investigated in accordance with relevant PRC law.
Regulations
Relating to Mobile Internet Applications Information Services
In
addition to the Telecommunications Regulations and other regulations above, mobile applications (the "APPs") and the Internet
application store (the "APP Store") are specially regulated by the Regulations for the Administration of Mobile Internet
Applications Information Services (the "APP Provisions"), which were promulgated by the Cyberspace Administration of China
("CAC") on June 28, 2016 and became effective on August 1, 2016.
Pursuant
to the APP Provisions, the APP information service providers shall satisfy relevant qualifications required by laws and regulations,
strictly carry out the information security management responsibilities and fulfill their obligations in various aspects relating to
the real-name system, protection of users' information and the examination and management of information content. The APP Store
service providers shall file with the local cyberspace administration authorities within thirty (30) days after its APP Store services
have launched, and such APP Store service providers are responsible for overseeing APP providers operated on their stores.
On
November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security
and the General Office of the SAMR promulgated the Identification Method of Illegal Collection and Use of Personal Information Through
App, which provides guidance for the regulatory authorities to identify the illegal collection and use of personal information through
mobile apps, and for the app operators to conduct self-examination and self-correction and for other participants to voluntarily monitor
compliance.
On
July 22, 2020, the MIIT issued the Notice on Carrying out Special Rectification Actions in Depth against the Infringement on Users'
Rights and Interests by Apps to urge app service providers, among others, to enhance the protection of users' personal information
in relation to the download, installing and upgrade of apps.
Regulations
Relating to Online Transmission of Audio-Visual Programs and Online Living Streaming Business
On
April 13, 2005, the State Council promulgated the Certain Decisions on the Entry of the Non-public-owned Capital into the Cultural Industry,
according to which private capital shall not use information network to engage in audio-visual programs service. On July 6, 2005, five
PRC governmental authorities, including the Ministry of Culture ("MOC"), the State Administration of Radio, Film and Television
("SARFT"), the General Administration of Press and Publication ("GAPP"), the National Development and Reform
Commission ("NDRC") and the Ministry of Commerce ("MOFCOM"), jointly adopted the Several Opinions on Canvassing
Foreign Investment into the Cultural Sector. On December 20, 2007, the SARFT and the MIIT jointly promulgated the Provisions on the Administration
of Internet Audio-Visual Program Service, which took effect on January 31, 2008 and were subsequently amended on August 28, 2015, according
to which, the entities engaged in business of online audio-visual programs shall obtain the "License for Online Transmission of
Audio/Visual Program". Under these provisions, foreign-invested companies are actually prohibited from engaging in the business
of distributing audio-visual programs and service through Internet.
Providers
of audio-visual program services through the Internet (including through mobile networks), in general, must be either state-owned or
state-controlled entities, and the business to be carried out by such providers must satisfy the overall planning and guidance catalog
for Internet audio-visual program service determined by SARFT; and such providers are required to obtain the License for Online Transmission
of Audio/Video Program issued by National Radio and Television Administration ("NRTA"), or complete certain registration
procedures with NRTA.
65
On
April 28, 2008, SARFT issued a Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission of
Audio-Visual Programs, as amended on August 28, 2015, which further sets out detailed provisions concerning the application and approval
process regarding the License for Online Transmission of Audio/Video Program. The notice also stipulates that the qualified entities
for application of such license shall include the companies absolutely controlled by multiple state-owned shareholders and enterprises
relatively controlled by state-owned capital (there shall be no affiliation between non-state-owned shareholders), and exclude foreign-invested
enterprises. Further, on March 30, 2009, SARFT promulgated the Notice on Strengthening the Administration of the Content of Internet
Audio-Visual Programs, which reiterates the pre-approval requirements for the audio-visual programs transmitted through the Internet,
including through mobile networks, where applicable, and prohibits certain types of Internet audio-visual programs containing violence,
pornography, gambling, terrorism, superstition or other similarly prohibited elements.
On
March 17, 2010, the SARFT issued the Internet Audio-Visual Program Services Categories (Provisional), or the Provisional Categories,
as adjusted on April 7, 2017, which classified Internet audio/visual program services into four categories. In addition, the "Notice
concerning Strengthening the Administration of the Streaming Service of Online Audio/Visual Programs" promulgated by the State
Administration of Press, Publication, Radio, Film and Television (or the SAPPRFT, which is the predecessor of NRTA) on September 2, 2016
emphasizes that, unless a specific license is granted under the Provisional Categories, the audio/visual programs service provider is
forbidden from engaging in live streaming on major political, military, economic, social, cultural and sports events.
On
July 6, 2012, the SARFT and the CAC issued the Notice Regarding Further Enhancement of Management of Online Audio and Video Programs
such as Online Drama Series and Microfilms, pursuant to which providers of Internet audio-visual program services which are engaged in
the production of online audio-visual programs such as online drama series and microfilms and broadcast such programs on their own websites
shall lawfully obtain the Radio and Television Program Production and Operating Permit issued by local branches of the NRTA and corresponding
License for Online Transmission of Audio/Video Program at the same time. Providers of Internet audio-visual program services shall report
the information on online audio-visual programs such as online drama series and microfilms which have been reviewed and approved to the
provincial branches of the NRTA in their domiciles for filing.
On
April 25, 2016, the SAPPRFT promulgated the Provisions on the Administration of Private Network and Targeted Communication Audio-visual
Program Services, amended on Mar 23, 2021, which apply to the provision of radio, television programs and other audio-visual programs
to a targeted audience on television and all types of handheld electronic equipment. This provision covers the Internet and other information
networks as targeted transmission channels, including the provision of content, integrated broadcast control, transmission and distribution
and other activities conducted in such forms as Internet protocol television, private network mobile television and Internet television.
Anyone who provides private network and targeted transmission audio-visual program services must obtain a License for Online Transmission
of Audio/Video Program issued by the SARFT and operate its business pursuant to the scope as provided in such license. Foreign-invested
enterprises are not allowed to engage in the above referenced businesses.
On
July 1, 2016, the MOC promulgated the Notice on Strengthening the Administration of Network Performance, which regulates the behavior
of entities conducting businesses related to network performance and performers. Entities operating network performances shall be responsible
for the services and content posted on their website by performers. They must refine their content management mechanism and shut down
the channel and stop the dissemination of any network performance as soon as they realize that such network performance is in violation
of relevant laws and regulations. Network performers shall be responsible for their performances and shall not perform any program containing
violence, pornography, or other similarly prohibited elements.
In
addition, the SAPPRFT issued the Notice Concerning Strengthening the Administration the Streaming Service of Online Audio-Visual Programs
in September 2016, pursuant to which an Internet live-streaming service provider shall (i) equip personnel to review the content of the
live-stream; (ii) establish the technical methods and work mechanisms in order to replace the unlawful content by using the backup program;
and (iii) record the live-streaming program and keep the records for at least sixty (60) days to fulfill the inspections requirements
from the competent administrative authorities. The CAC promulgated the Regulations for the Administration of Online Live-Streaming Services,
or Internet Live-Streaming Services Provisions, on November 4, 2016, effect as of December 1, 2016, according to which, an Internet live-streaming
service provider shall (a) establish a live-streaming content review platform; (b) conduct authentication registration of Internet live-streaming
issuers based on their identity certificates, business licenses and organization code certificates; and (c) enter into a service agreement
with Internet live-streaming services user to specify both parties' rights and obligations.
66
On
March 16, 2018, the SAPPRFT issued the Notice on Further Regulating the Communication Order of Internet Audio-Visual Programs, which
requires that, among others, audio-visual platforms shall: (i) not produce or transmit programs intended to parody or denigrate classic
works, (ii) not re-edit, re-dub, re-caption or otherwise ridicule classic works, radio and television programs, or original Internet
audio-visual programs without authorization, (iii) not transmit re-edited programs, which unfairly distort the original content, (iv)
strictly monitor the adapted content uploaded by platform users and not provide transmission channels for illicit content, (v) immediately
take down unauthorized content upon receipt of complaints from copyright owners, radio and television stations, or film and television
production institutions, (vi) strengthen the administration of movie trailers and prevent improper broadcasting of movie clips and trailers
prior to authorized release, and (vii) strengthen the administration of sponsorship and endorsement for Internet audio-visual programs.
Pursuant to this notice, the provincial branches of the NRTA shall have the authority to supervise radio and television stations and
websites that offer audio-visual programs within its jurisdiction and require them to further improve their content management systems
and implement relevant management requirements.
On
November 18, 2019, the CAC, the Ministry of Culture and Tourism and the National Radio and Television Administration jointly issued the
Administrative Provisions on Internet Audio-Video Information Services, or the Internet Audio-Video Information Services Provisions,
which became effective on January 1, 2020. The Internet Audio-Video Information Services Provisions define "Internet audio-video
information services" as providing audio and video information production, uploading and transmission to the public via Internet
platforms such as websites and applications. Entities providing Internet audio-video information services must obtain relevant licenses
subject to applicable PRC laws and regulations and are required to authenticate users' identities based on their organizational
codes, PRC ID numbers or mobile phone numbers, etc.
In
November 2020, the National Radio and Television Administration issued the Notice on Strengthening the Management of Network Live-performance
Streaming and E-Commerce Streaming, which requires a live-performance streaming platform to adopt and practically implement the real-name
registration system for the streamers and the viewers who purchase virtual gifts for streamers by taking measures including real-name
verification, face recognition and human review. Viewers who fail to pass the real-name registration shall not be allowed to purchase
virtual gifts. Live-performance streaming platforms shall block any mechanism that allows minors to purchase any virtual gifts for the
streamers. A platform shall set the limitations of maximum amount for purchasing virtual gifts for each time, each day and each month.
If a viewer making virtual gift purchases that aggregately reach the half of the daily or monthly limitations, the platform shall notify
such viewer and allow such viewer to make further purchase only when he or she confirms the payment through SMS verification or other
methods. If a viewer making virtual gift purchases that aggregately reach the full daily or monthly limitations, the platform shall suspend
purchase services to such viewer. A platform shall also adopt a delayed-fund-transfer system such that if a streamer commits illegal
activities, the purchase of virtual gifts shall be refunded to viewers. In addition, the live-performance streaming platform shall not
adopt operational strategies that encourage viewers to purchase virtual gifts irrationally. If the platform finds that any streamer or
his or her agent implies, solicits or encourages viewers to make large amount purchases by means of disseminating vulgar information,
engaging in organized publicity stunt or engaging a "water army" to purchase virtual gifts in large volumes, the platform
shall take measures against such streamer and such agent, list him or her on a watch list and report him or her to the radio and television
administration authorities. In addition, it requires live-performance streaming platforms and e-commerce streaming platforms to complete
filing with the National Information Registration Administration System of Online Audio/Video Platforms prior to November 30, 2020.
On
April 12, 2022, the Online Audio-visual Program Management Department of NRTA and the Publishing Bureau of the Central Propaganda Department
issued the Notice on Strengthening the Management of Livestreaming of Online Games on the Online Audio-visual Program Platforms. The
Notice provides that online audio-visual program platforms, including live streaming platforms shall not (i) disseminate illegal games
on audio-visual program platforms; (ii) stream online games that have not been approved by the competent authorities; and (iii) use live
broadcast rooms and other forms to drive traffic for the illegal game content on various platforms. Further, the Notice requires live
streaming platforms to strengthen the management of game livestreaming content. For example, livestreaming platforms, in particular,
online game livestreaming platforms, shall strictly control the content setting, publicity and interactions of users and take effective
measures to strengthen the management of livestreaming of online games, such as establishing and improving the management system of information
release, follow-up comments and emergency response related to living game programs and improving the program monitoring and public opinion
monitoring mechanism. In addition, livestreaming platforms are also required to strengthen the guidance of the game anchor's code
of conduct and establish and implement the protection mechanism for minors. The platforms that conduct livestreaming of online games
shall set up anti-addiction mechanisms for minors, take effective measures to ensure that the "teenager model" is effective,
implement the requirements of real-name system, prohibit minors from recharging and rewarding, and set up special channels for refund
of rewards given by minors. The Notice also provides that those who violate the law should not use livestreaming to make sound appearances.
In addition, online audio-visual platforms (including various domestic and overseas individual and institutional accounts opened on relevant
platforms) should not live broadcast overseas game programs or competitions with obtaining approval from relevant authorities.
67
Regulations
Relating to Online Cultural Activities
The
Ministry of Culture promulgated the Provisional Measures on Administration of Internet Culture firstly in 2011, as most recently amended
on December 15, 2017, and the Notice on Issues Relating to Implementing the Newly Revised Provisional Measures on Administration of Internet
Culture promulgated by the Ministry of Culture in 2011, which apply to entities that engage in activities related to "online cultural
products." "Online cultural products" are classified as cultural products developed, published and disseminated through
the Internet which mainly include: (i) online cultural products particularly developed for publishing through the Internet, such as,
among other things, online music and video files, network games and online animation features and cartoons (including flash animation);
and (ii) online cultural products converted from audio and visual products, games, performing arts, artworks and animation features and
cartoons, and published on the Internet. Pursuant to this legislation, entities are required to obtain the Internet Culture Operation
Licenses from the applicable provincial level counterpart of the Ministry of Culture and Tourism ("MCT", which is the predecessor
of MOC) if they intend to commercially engage in any of the following types of activities:
●
production, duplication,
    import, release or broadcasting of online cultural products;
●
publishing of online cultural
    products on the Internet or transmission thereof to computers, fixed-line or mobile phones, radios, television sets or game consoles
    for the purpose of browsing, reading, reviewing, using or downloading such products by online users; or
●
exhibitions or contests
    related to online cultural products.
On
August 12, 2013, the MOC issued the Administrative Measures for Content Self-Review by Internet Culture Business Entities, effective
as of December 1, 2013, which requires Internet culture business entities to review the content of products and services to be provided
prior to providing such content and services to the public. The content management system of an Internet culture business entity is required
to specify the responsibilities, standards and processes for content review as well as accountability measures, and is required be filed
with the provincial level counterpart of the MCT.
The
Regulations for the Administration of Audio and Video Products, as released by the State Council in December 2001 and last amended in
November 2020, require that the publication, production, duplication, importation, wholesale, retail and renting of audio and video products
are subject to a license issued by competent authorities.
In
September 2021, the State Council released the Opinions on Improvement of Internet Civilization, which reiterates the necessity of strengthening
the order in cyberspace and requires Internet platforms to strengthen the responsibility of network platform, strengthen the website
platform community rules, user agreement construction, and enhance national security awareness.
On
September 15, 2021, the CAC released the Opinions on Further Intensifying Responsibilities of Website Platform for Information Content,
which provides specific requirements for website platforms from various aspects, such as community rules, accounts, content moderation,
content quality management, key functions, platform operation, minors' online protection and personnel management. Pursuant to
the Opinions, website platforms shall create a positive and healthy cyberspace and steer public opinion in the correct direction. Website
platform are also required to strengthen the management of pop-ups, accurately handle the procedures of sending out push notifications
to users and strictly control the frequency of push notifications.
Regulations
Relating to Virtual Currency
On
January 25, 2007, the Ministry of Public Security, the MOC, the Ministry of Information Industry and the GAPP jointly issued a circular
regarding online gambling which has implications on the issuance and use of virtual currency. It basically bans the conversion of virtual
currency into real currency or property and prohibits transfer of virtual currency among game players.
On
February 15, 2007, fourteen PRC regulatory authorities jointly issued a circular to further strengthen the oversight of Internet cafes
and online games. In accordance with the circular, the People's Bank of China, or PBOC, has the authority to regulate virtual currency,
including: (a) setting limits on the aggregate amount of virtual currency that can be issued by online game operators and the amount
of virtual currency that can be purchased by an individual; (b) stipulating that virtual currency issued by online game operators can
only be used for purchasing virtual products and services within the online games and not for purchasing tangible or physical products;
(c) requiring that the price for redemption of virtual currency shall not exceed the respective original purchase price; and (d) banning
the trading of virtual currency.
68
On
June 4, 2009, the MOC and the MOFCOM jointly issued a notice to strengthen the administration of online game virtual currency. The Virtual
Currency Notice requires businesses that (a) issue online game virtual currency (in the form of prepaid cards and/or pre-payment or prepaid
card points), or (b) offer online game virtual currency transaction services to apply for approval from the MCT through its provincial
branches within three (3) months after the issuance of the notice. The Virtual Currency Notice businesses that issue virtual currency
for online games are prohibited from offering services that can trade virtual currency. Any company that fails to file the necessary
application will be subject to sanctions, including but not limited to, mandatory corrective actions and fines. Based on the Virtual
Currency Notice, the MOC further promogulated a filing guideline for the "online game virtual currency distribution enterprises"
and "online game virtual currency trading enterprises" on July 20, 2009 to regulate the entities involving such virtual currency
businesses.
Currently,
the PRC government has not promulgated any specific rules, laws or regulations to directly regulate virtual currency, except for the
above-mentioned online game virtual currency. To comply with the principle of above-mentioned regulations, in relation to online streaming
business, our virtual currency currently can only be used by viewers to exchange for virtual items/gifts to be used to show support for
performers or gain access to privileges and special features in the channels which are services in nature instead of "real currency
or property." Once the virtual currency is exchanged by viewers for virtual items/gifts or the relevant privileged services, the
conversion transaction is completed and we will immediately cancel the virtual properties in our internal system. See "Item 3.
Key Information—D. Risk Factors—Risk Factors Relating to Doing Business in China—Restrictions on virtual currency may
adversely affect our revenues."
Under
the Virtual Currency Notice, "online games virtual currency trading service provider" refers to the business that provides
platform services related to virtual trading in online games among game users. The Virtual Currency Notice further requires an online
game virtual currency transaction service provider to comply with relevant e-commerce regulations issued by the Ministry of Commerce.
According to the Guiding Opinions on Online Trading (Interim) issued by the Ministry of Commerce on March 6, 2007, online platform services
are trading services provided to online buyers and sellers through a computer information system operated by the service provider.
On
August 31, 2018, the SCNPC promulgated the E-commerce Law, or the PRC E-commerce Law, which became effective on January 1, 2019. The
E-commerce Law clarifies on the obligations of the e-commerce platform operators. On March 15, 2021, the SAMR issued the Measures for
the Supervision and Administration of Online Transactions, or the Online Transaction Measures, which became effective on May 1, 2021
and replaced the Administrative Measures for the Online Trading promulgated on January 24, 2016. The Online Transaction Measures further
emphasize, among others, that e-commerce platform operators are required to establish a mechanism to inspect and monitor products and
services provided by the merchants, and shall submit the identity information of those merchants to the local branches of the SAMR.
Regulations
Relating to Commercial Performances
The
Administrative Regulations on Commercial Performances was firstly promulgated by the State Council in 2005 and most recently amended
on November 29, 2020. According to these regulations, to legally engage in commercial performances, a culture and arts performance group
shall have full-time performers and equipment in line with its performing business, and file an application with the culture administrative
department of the people's government at the county level for approval; while a performance brokerage agency shall have three or
more full-time performance brokers and funds suitable for the relevant business, and file an application with the culture administrative
department at the provincial level. The culture administrative department shall make a decision within twenty (20) days from the receipt
of the application whether to approve the application, and upon approval, will issue a commercial performance license. Currently, there
is no related regulations or governmental interpretation to specify if above regulations apply to live streaming business.
Regulations
Relating to Production of Radio and Television Programs
On
July 19, 2004, the SARFT issued the Regulations on the Administration of Production and Operation of Radio and Television Programs, or
the Radio and TV Programs Regulations, which took effect on August 20, 2004 and was amended on August 28, 2015. The Radio and TV Programs
Regulations require any entities engaging in the production and operation of radio and television programs to obtain a license for such
businesses from the NRTA or its provincial branches. Entities with the Radio and Television Program Production and Operating Permit must
conduct their business operations strictly in compliance with the approved scope of production and operations and these entities (except
radio and TV stations) must not produce radio and TV programs regarding current political news or similar subjects.
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Regulations
Relating to Intellectual Property Rights
Copyright
China
has enacted various laws and regulations relating to the protection of copyright. China is a signatory to some major international conventions
on protection of copyright and became a member of the Berne Convention for the Protection of Literary and Artistic Works in October 1992,
the Universal Copyright Convention in October 1992 and the Agreement on Trade-Related Aspects of Intellectual Property Rights upon its
accession to the World Trade Organization in December 2001.
The
PRC Copyright Law, promulgated in 1990 and amended in 2001, 2010 and 2020, or the Copyright Law, and its related implementing regulations,
promulgated in 2002 and amended in 2013, are the principal laws and regulations governing copyright related matters. The Copyright Law
provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, enjoy copyright of their works,
which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.
The
State Council and the National Copyright Administration have promulgated various rules and regulations relating to the protection of
software in China. According to these rules and regulations, software owners, licensees and transferees may register their rights in
software with the Copyright Protection Center of China and obtain software copyright registration certificates. Although such registration
is not mandatory under PRC law, software owners, licensees and transferees are encouraged to go through the registration process and
registered software rights may be entitled to better protection. For the number of software programs for which we had registered software
copyrights as of the date of this statement.
The
amended Copyright law covers Internet activities, products disseminated over the Internet and software products, among the subjects entitled
to copyright protection. Registration of copyright is voluntary, and it is administrated by the Copyright Protection Center of China.
To further clarify some key Internet copyright issues, on December 17, 2012, the PRC Supreme People's Court promulgated the Regulation
on Several Issues Concerning Applicable Laws on Trial of Civil Disputes over the Infringement of Information Network Transmission Right,
or the 2013 Regulation. The 2013 Regulation took effect on January 1, 2013, and replaced the Interpretations on Some Issues Concerning
Applicable Laws for Trial of Disputes over Internet Copyright that was initially adopted in 2000 and subsequently amended in 2004 and
2006. On Jan. 1, 2021, 2013 Regulation was amended (2021 Regulation). Under the 2021 Regulation, where an Internet information service
provider works in cooperation with others to jointly provide works, performances, audio and video products of which the right holders
have information network transmission right, such behavior will constitute joint infringement of third parties' information network
transmission right, and the PRC court shall order such Internet information service provider to assume joint liability for such infringement.
To
address the problem of copyright infringement related to content posted or transmitted on the Internet, the National Copyright Administration
and Ministry of Information Industry jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet
on April 29, 2005. These measures, which became effective on May 30, 2005, apply to acts of automatically providing services such as
uploading, storing, linking or searching works, audio or video products, or other content through the Internet based on the instructions
of Internet users who publish content on the Internet, or the Internet Content Providers, without editing, amending or selecting any
stored or transmitted content. When imposing administrative penalties upon the act which infringes upon any user's right of communication
through information networks, the Measures for Imposing Copyright Administrative Penalties, promulgated in 2009, shall be applied.
Where
a copyright holder finds that certain Internet content infringes upon its copyright and sends a notice to the relevant Internet information
service operator, the relevant Internet information service operator is required to (i) immediately take measures to remove the relevant
content and (ii) retain all infringement notices for six months and to record the content, display time and IP addresses or the domain
names related to the infringement for 60 days. If the content is removed by an Internet information service operator according to the
notice of a copyright holder, the content provider may deliver a counter-notice to both the Internet information service operator and
the copyright holder, stating that the removed content does not infringe upon the copyright of other parties. After the delivery of such
counter-notice, the Internet information service operator may immediately reinstate the removed content and shall not bear administrative
legal liability for such reinstatement.
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An
Internet information service operator may be subject to cease-and-desist orders and other administrative penalties such as confiscation
of illegal income and fines, if it is clearly aware of a copyright infringement through the Internet or, although not aware of such infringement,
it fails to take measures to remove relevant content upon receipt of the copyright owner's notice of infringement and, as a result,
damages public interests. Where there is no evidence to indicate that an Internet information service operator is clearly aware of the
existence of copyright infringement, or the Internet information service operator has taken measures to remove relevant content upon
receipt of the copyright owner's notice, the Internet information service provider shall not bear the relevant administrative legal
liabilities.
On
May 18, 2006, the State Council issued the Protection of the Right of Communication through Information Network, which took effect on
July 1, 2006 and amended on January 30, 2013. Under this regulation, an internet information service provider may be exempt from indemnification
liabilities under the certain circumstances.
Patent
The
National People's Congress adopted the PRC Patent Law in 1984 and amended it in 1992, 2000, 2008 and 2020, respectively. A patentable
invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability. Patents cannot be
granted for scientific discoveries, rules and methods for intellectual activities, methods used to diagnose or treat diseases, animal
and plant breeds or substances obtained by means of nuclear transformation. The Patent Office under the State Intellectual Property Office
is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention
and a ten-year term for a utility model or design. Except under certain specific circumstances provided by law, any third-party user
must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the
rights of the patent holder.
According
to the PRC Patent Law, if the Patent Office finds the application of an invention conforms to the legal requirements after its preliminary
examination of such application documents, it shall publish the application promptly within eighteen (18) full months after the filing
date. According to the Guidelines of Patent Examination, the examination of a patent shall include the preliminary examination, the substantive
examination, examination of international applications entering the national phase and review. However, the above-mentioned regulations
do not explicitly state how long it takes for a patent application to be approved or denied. In practice, it generally may take up to
one year for the Patent Office to review and approve or deny applications of patents in the category of utility model or design and two
to five years in the category of invention.
Trademark
The
PRC Trademark Law, adopted in 1982 and amended in 1993, 2001, 2013 and 2019, with its implementation rules adopted in 2014, protects
registered trademarks. The Trademark Office of National Intellectual Property Administration, or the Trademark Office handles trademark
registrations and grants a protection term of ten years to registered trademarks, which may be extended for another ten years upon request.
Trademark license agreements must be filed with the Trademark Office for record.
Domain
name
On
November 27, 2017, the MIIT promulgated the Notice of the Ministry of Industry and Information Technology on Regulating the Use of Domain
Names in Providing Internet-based Information Services, which became effective on January 1, 2018. Pursuant to the notice, the domain
name used by an internet-based information service provider in providing internet-based information services must be registered and owned
by such provider in accordance with the law. If the internet-based information service provider is an entity, the domain name registrant
must be the entity (or any of the entity's shareholders), or the entity's principal or senior manager.
On
June 18, 2019, China Internet Network Information Center ("CNNIC") issued the Implementing Rules for country code Top-Level
Domain, ccTLDs. On June 18, 2019 the CNNIC issued, pursuant to which the CNNIC can authorize a domain name dispute resolution institution
to decide disputes. On August 24, 2017, the MIIT promulgated the Measures for Administration of Internet Domain Names, which regulates
the registration of domain names.
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Regulations
Relating to Internet Infringement
On
May 28, 2020 the National People's Congress promulgated the Civil Code of the People's Republic of China, or the Civil Law, which
became effective on January 1, 2021. Under the Civil Law, an Internet user or an Internet service provider that infringes upon the civil
rights or interests of others through using the Internet assumes tort liability. If an Internet user infringes upon the civil rights
or interests of another through using the Internet, the person being infringed upon has the right to notify and request the Internet
service provider whose Internet services are facilitating the infringement to take necessary measures including the deletion, blocking
or disconnection of an Internet link. If, after being notified, the Internet service provider fails to take necessary measures in a timely
manner to end the infringement, it will be jointly and severally liable for any additional harm caused by its failure to act.
Regulations
Relating to Internet Content and Information/Data Security
The
Administrative Measures on Internet Information Services (effective as of January 8, 2011 and amended on January 8, 2011) specify that
Internet information services regarding news, publications, education, medical and health care, pharmaceutical and medical appliances,
among other things, are to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited
from providing services beyond those included in the scope of their ICP Licenses or filings. The PRC government has promulgated measures
relating to Internet content through a number of governmental agencies, including the MIIT, the Ministry of Culture and the General Administration
of Press and Publication. These measures specifically prohibit Internet activities, that result in the publication of any content which
is found to propagate obscenity, gambling or violence, instigate crimes, undermine public morality or the cultural traditions of the
PRC or compromise state security or secrets. Internet information providers must monitor and control the information posted on their
websites. If any prohibited content is found, they must remove the offensive content immediately, keep a record of it and report it to
the relevant authorities.
On
December 13, 2005, the Ministry of Public Security promulgated Provisions on Technological Measures for Internet Security Protection,
or the Internet Protection Measures, which took effect on March 1, 2006. The Internet Protection Measures requires all Internet information
services operators to take proper measures including anti-virus, data back-up and other related measures, and keep records of certain
information about their users (including user registration information, log-in and log-out time, IP address, content and time of posts
by users) for at least sixty (60) days and submit the above information as required by laws and regulations.
The
Standing Committee of National People's Congress, China's national legislative body, enacted the Decisions on the Maintenance
of Internet Security on December 28, 2000 and subsequently amended on August 27, 2009, that may subject any persons to criminal liabilities
in China for any attempt to: (i) gain improper entry into a computer or system of strategic importance; (ii) disseminate politically
disruptive information; leak state secrets; (iv) spread false commercial information; or (v) infringe on intellectual property rights.
The Ministry of Public Security has promulgated measures that prohibit the use of the Internet in ways which, among other things, results
in a leakage of state secrets or a spread of socially destabilizing content.
In
1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer Information Network with
International Connections (amended by the State Council of PRC. in 2011), which prohibit using the Internet in ways which, among others,
result in a leak of state secrets or a spread of socially destabilizing content. The Ministry of Public Security has supervision and
inspection powers in this regard, and relevant local security bureaus may also have jurisdiction. If an ICP License holder violates these
measures, the PRC government may revoke its ICP License and shut down its website.
On
June 22, 2007, the Ministry of Public Security, the State Secrecy Bureau, the State Cipher Code Administration and the Information Office
of the State Council jointly promulgated the Circular on Printing and Distributing the Administrative Measures for the Graded Protection
of Information Security. According to the Circular, the security protection grade of an information system may be classified into five
grades. To newly build an information system of Grade II or above, its operator or user shall, within 30 days after it is put into operation,
handle the record- filing procedures at the local public security organ at the level of municipality divided into districts or above
of its locality.
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On
December 28, 2012, the Standing Committee of the National People's Congress reiterated relevant rules on the protection of Internet
information by issuing the Decision on Strengthening the Protection of Network Information, or the 2012 Decision. The 2012 Decision distinctly
clarified certain relevant obligations of Internet information service providers. Once it discovers any transmission or disclosure of
information prohibited by the relevant laws and regulations, the Internet information service provider shall stop transmission of such
information, take measures such as elimination, keeping relevant records and reporting to relevant authorities. To comply with the above
laws and regulations, we have developed the following mechanisms to monitor the content on our platforms as AI-backed automatic detection
process, manual review, self-regulation system by streamers and room managers and report by users.
On
December 15, 2019, the CAC promulgated the Provisions on the Ecological Governance of Network Information Contents, which became effective
on March 1, 2020. It requires network platform operators like us not to disseminate illegal content, nor to present exaggerated, sexually
suggestive, discriminative or otherwise inappropriate contents in eye-catching areas such as home page, popup and hot search list.
On
July 1, 2015, the SCNPC issued the PRC National Security Law, which came into effect on the same day. The National Security Law provides
that the state shall safeguard the sovereignty, security and cybersecurity development interests of the state, and that the state shall
establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet
and information technology products and services, and other important activities that are likely to impact national security of China.
On
July 30, 2021, the State Council promulgated the Regulations on Protection of Security of Critical Information Infrastructure, effective
on September 1, 2021, pursuant to which, a "critical information infrastructure" refers to critical network facilities and
information systems involved in important industries and sectors, such as public communication and information services, energy, transportation,
water conservancy, finance, public services, governmental digital services, science and technology related to national defense industry,
as well as those which may seriously endanger national security, the national economy and citizens' livelihoods or public interests
if damaged or malfunctioned, or if any leakage of data in relation thereto occurs. The appropriate governmental departments and supervision
and management departments of the aforementioned important industries will be responsible for (i) organizing the identification of critical
information infrastructures in their respective industries in accordance with relevant identification rules, and (ii) promptly notifying
the identified operators and the public security department of the State Council of the identification results. In the event of occurrence
of any major cybersecurity incident or discovery of any major cybersecurity threat for the critical information infrastructure, the operator
shall report to the protection authorities and the public security authorities as required.
On
November 14, 2021, the CAC published Measures on Network Data Security Management (Draft for Comment), or the Draft Measures for Internet
Data Security, which provides that data processors conducting the following activities shall must for cybersecurity review: (i) merger,
reorganization or separation of Internet platform operators that have acquired a large number of data resources related to national security,
economic development or public interests affecting or possibly affecting national security; (ii) listing abroad of data processors processing
over one million users' personal information; (iii) listing in Hong Kong that affects or may affect national security; and (iv)
other data processing activities that affect or may affect national security. The Draft Measures for Internet Data Security also requires
data processors processing over one million users' personal information to comply with the regulations on important data processors,
including, among others, appointing a person in charge of data security and establishing a data security management organization, filing
with the competent authority within 15 working days after identifying its important data, formulating data security training plans and
organizing data security education and training for all staff every year, and that the education and training time of data security related
technical and management personnel shall not be less than 20 hours per year. The Draft Measures for Internet Data Security also provides
that data processors processing important data or going public overseas shall conduct an annual data security assessment by themselves
or entrust a data security service institution to do so, and submit the data security assessment report of the previous year to the local
branch of CAC before January 31 of each year. Further, the Draft Measures for Internet Data Security also require Internet platform operators
to establish platform rules, privacy policies and algorithm strategies related to data, and solicit public comments on their official
websites and personal information protection-related sections for no less than 30 working days when they formulate platform rules or
privacy policies or makes any amendments that may have significant impacts on users' rights and interests. Platform rules and privacy
policies formulated by operators of large Internet platforms with more than 100 million daily active users, or amendments to such rules
or policies by operators of large Internet platforms with more than 100 million daily active users that may have significant impacts
on users' rights and interests shall be evaluated by a third-party organization designated by the CAC and reported to local branch
of the CAC for approval.
On
September 17, 2021, the CAC and other eight government authorities jointly issued the Guiding Opinions on Strengthening the Comprehensive
Governance of Network Information Service Algorithms with the aim to, within three years, gradually establish a comprehensive governance
pattern for algorithm security with a complete governance mechanism, a refined regulatory system and a standardized algorithm ecosystem.
According to the Guiding Opinions on Strengthening the Comprehensive Governance of Network Information Service Algorithms, enterprises
shall establish an algorithm security accountability system and a system for the review of scientific and technological ethics, enhance
the organizational structure for algorithm security, intensify efforts in the prevention of risks and the handling of hidden dangers,
and increase the capacity and level in handling algorithm security emergencies. Enterprises shall raise their awareness of responsibility
and assume primary responsibilities for outcomes caused by the application of algorithms.
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On
December 28, 2021, the CAC and twelve other PRC regulatory authorities jointly revised and issued the Cyber Security Review Measures
("the Review Measures"), which became effective on February 15, 2022. The Review Measures provides, among others, (i) the
purchase of cyber products and services by critical information infrastructure operators (the "CIIOs") and the network platform
operators (the "Network Platform Operators") which engage in data processing activities that affects or may affect national
security shall be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the
implementation of cybersecurity review under the CAC; and (ii) the Network Platform Operators with personal information data of more
than one million users that seek for listing in a foreign country are obliged to apply for a cybersecurity review by the Cybersecurity
Review Office.
Internet
companies in China are required to complete security filing procedures and regularly update information security and censorship systems
for their websites with local public security bureau. The PRC Law on Preservation of State Secrets, which became effective on October
1, 2010 requires an internet information services providers to discontinue disseminating any information that may be deemed to be leaked
state secrets and to report such incidents in a timely manner to the state security and public security authorities. Failure to do so
in a timely and adequate manner may subject the internet information services providers to liability and certain penalties given by the
Ministry of State Security, the Ministry of Public Security and/or the MIIT or their respective local branches.
Regulations
Relating to Privacy Protection
Under
the Several Provisions on Regulating the Market Order of Internet Information Services, issued by the Ministry of Industry and Information
Technology in 2011, an ICP service operator may not collect any user personal information or provide such information to third parties
without the consent of a user. An ICP service operator must expressly inform the users of the method, content and purpose for the collection
and processing of such user personal information and may only collect such information necessary for the provision of its services. PRC
laws and regulations prohibit Internet content providers from disclosing any information transmitted by users through their networks
to any third parties without their authorization unless otherwise permitted by law. An ICP service operator is also required to properly
keep the user personal information, and in case of any leak or likely leak of the user personal information, the ICP service operator
must take immediate remedial measures and, in severe circumstances, make an immediate report to the telecommunication's regulatory
authority. In addition, pursuant to the 2012 Decision and the Order for the Protection of Telecommunication and Internet User Personal
Information issued by the Ministry of Industry and Information Technology in July 2013, any collection and use of user personal information
must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified
purposes, methods and scope. An ICP service operator must also keep such information strictly confidential, and is further prohibited
from divulging, tampering or destroying of any such information, or selling or providing such information to other parties. If an Internet
content provider violates these regulations, the MIIT or its local bureaus may impose penalties and the Internet content provider may
be liable for damages caused to its users.
The
Personal Information Protection Law of the People's Republic of China ("PIPL") was passed on August 20, 2021 and went
into effect November 1, 2021. The PIPL generally covers all organizations operating in China processing personal information and applies
to the activities of handling the personal information of natural persons within the borders of China. Moreover, PIPL will require compliance
initiatives on the part of Chinese organizations and foreign companies operating in China. According the PIPL, Information handlers have
several responsibilities, including adopting the certain measures to ensure personal information handling conforms to the provisions
of laws and administrative regulations, and prevent unauthorized access as well as personal information leaks, distortion, or loss.
The PIPL has several enforcement mechanisms, including warnings, orders to stop illegal activity, fines, and confiscation of unlawful
income. Illegal acts may also be recorded in China's Social Credit System. In addition, individuals can also sue handlers for violation
of their rights.
On
November 1, 2021, the MIIT published the Notice on the Implementation of Actions to Improve the Perception of Information and Communication
Services, which stipulates that enterprises shall provide a list of personal information collected and a list of personal information
shared with third parties, and shall display such lists in the second-level menu of the APP for users' access ("Dual Lists
Obligation"). Furthermore, the Notice on the Implementation of Actions to Improve the Perception of Information and Communication
Services requires certain enterprises as enumerated in its schedule to fulfill the Dual Lists Obligation by the end of 2021, but it does
not provide a clear deadline for other enterprises.
On
October 1, 2019, the Office of the Central Cyberspace Affairs Commission issued the Provisions on the Cyber Protection of Children's
Personal Information, which requires, among others, that network operators who collect, store, use, transfer and disclose personal information
of children under the age of 14 shall establish special rules and user agreements for the protection of children's personal information,
inform the children's guardians in a noticeable and clear manner and shall obtain the consent of the children's guardians.
Furthermore, the authorities issuing the circular vow to initiate a campaign to correct unlawful collection and usage of personal information
via Apps from January 2019 through December 2019. The PRC Civil Code further provides in a stand-alone chapter of right of personality
and reiterates that the personal information of a natural person shall be protected by the law. Any organization or individual shall
legitimately obtain such personal information of others in due course on a need-to-know basis and ensure the safety and privacy of such
information, and refrain from excessively handling or using such information.
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Pursuant
to the Ninth Amendment to the Criminal Law of the PRC issued by the SCNPC on August 29, 2015, effective on November 1, 2015, any Internet
service provider that fails to fulfill the obligations related to Internet information security as required by applicable laws and refuses
to take corrective measures, will be subject to criminal liability for: (i) any large-scale dissemination of illegal information; (ii)
any severe effect due to the leakage of users' personal information; (iii) any serious loss of evidence of criminal activities;
or (iv) other severe situations, and any individual or entity that (a) sells or provides personal information to others unlawfully or
(b) steals or illegally obtains any personal information will be subject to criminal liability in severe situations.
On
November 7, 2016, the SCNPC promulgated the PRC Cybersecurity Law, which came into effect on June 1, 2017. Pursuant to the Cybersecurity
Law, network operators shall follow their cybersecurity obligations according to the requirements of the classified protection system
for cybersecurity, including: (i) formulating internal security management systems and operating instructions, determining the persons
responsible for cybersecurity and implementing the responsibility for cybersecurity protection; (ii) taking technological measures to
prevent computer viruses, network attacks, network intrusions and other actions endangering cybersecurity; (iii) taking technological
measures to monitor and record the network operation status and cybersecurity incidents; (iv) taking measures such as data classification,
and back-up and encryption of important data; and (v) other obligations stipulated by laws and administrative regulations. In addition,
network operators shall follow the principles of legitimacy to collect and use personal information and disclose their rules of data
collection and use, clearly express the purposes, means and scope of collecting and using the information and obtain the consent of the
persons whose data is gathered.
On
January 23, 2019, the Office of the Central Cyberspace Affairs Commission and other three authorities jointly issued the Circular on
the Special Campaign of Correcting Unlawful Collection and Usage of Personal Information via Apps. Pursuant to this 2019 circular: (i)
App operators are prohibited from collecting any personal information irrelevant to the services provided by such operator; (ii) information
collection and usage policy should be presented in a simple and clear way, and such policy should be consented by the users voluntarily;
(iii) authorization from users should not be obtained by coercing users with default or bundling clauses or making consent a condition
of a service. App operators violating such rules can be ordered by authorities to correct its incompliance within a given period, be
reported in public; or even quit its operation or cancel its business license or operational permits.
On
April 26, 2021, the MIIT issued the Interim Administrative Provisions on Personal Information Protection in Internet Mobile Applications
(Draft for Comment), which sets forth two principles of collection and utilization of personal information, namely "explicit consent"
and "minimum necessity."
Regulations
Relating to Internet Publication and Cultural Products
On
February 4, 2016, State Administration of Press, Publication, Radio, Film and Television (or the SAPPRFT, which is the predecessor of
NRTA), and the MIIT issued the Administrative Provisions on Online Publishing Services, or the Online Publishing Provisions, which took
effect on March 10, 2016. According to the Online Publishing Provisions, all online publishing services provided within the territory
of China are subject to the Online Publishing Provisions, and an online publishing services permit shall be obtained in order to provide
online publishing services. Pursuant to the Online Publishing Provisions, "online publishing services" refer to providing
online publications to the public through information networks; and "online publications" refer to digital works with publishing
features such as having been edited, produced or processed and are made available to the public through information networks, including:
(i) written works, pictures, maps, games, cartoons, audio-visual reading materials and other original digital works containing useful
knowledge or ideas in the field of literature, art, science or other fields; (ii) digital works of which the content is identical to
that of any published book, newspaper, periodical, audio-visual product, electronic publication or the like; (iii) network literature
databases or other digital works, derived from any of the aforesaid works by selection, arrangement, collection or other means; and (iv)
other types of digital works as may be determined by the SAPPRFT.
Regulations
Relating to Foreign Currency Exchange and Dividend Distribution
Foreign
currency exchange
The
core regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, as amended in August
2008, or the FEA Regulations. Certain organizations in the PRC, including foreign invested enterprises, may purchase, sell and/or remit
foreign currencies at certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. However,
approval of the State Administration of Foreign Exchange, or SAFE, is required for capital account transactions.
In
November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Direct Investment,
as amended, which substantially amends and simplifies the foreign exchange procedure. Pursuant to this circular, the opening of various
special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee
accounts, the reinvestment of RMB proceeds by foreign investors in the PRC and remittance of foreign exchange profits and dividends by
a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital
accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the
Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors
and the Supporting Documents in May 2013, as amended, which specifies that the administration by SAFE or its local branches over direct
investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business
relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.
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After
a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, became
effective on June 1, 2015, instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and
overseas direct investment from SAFE, entities and individuals will be required to apply for such foreign exchange registrations from
qualified banks. The qualified banks, under the supervision of SAFE, directly examine the applications and conduct the registration.
On
March 30, 2015, the SAFE issued the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital
of Foreign-Invested Enterprises, or SAFE Circular 19, effective on June 1, 2015 and amended on December 30, 2019. Under SAFE Circular
19, a foreign-invested enterprise, within the scope of business, may also choose to convert its registered capital from foreign currency
to Renminbi on a discretionary basis, and the Renminbi capital so converted can be used for equity investments within the PRC, which
will be regarded as the reinvestment of foreign-invested enterprise. Nevertheless, Circular 19 reiterates the principle that Renminbi
converted from foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes
beyond its business scope. Further, in June 2016, the SAFE issued the Circular on Reforming and Regulating Policies on the Control over
Foreign Exchange Settlement of Capital Accounts, or Circular 16, which took effect on the same day. Compared to Circular 19, Circular
16 provides that discretionary foreign exchange settlement applies to foreign exchange capital, foreign debt offering proceeds and remitted
foreign listing proceeds, and the corresponding Renminbi obtained from foreign exchange settlement are not restricted from extending
loans to related parties or repaying the intercompany loans (including advances by third parties).
In
January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness
and Compliance Verification, or Circular 3, which stipulates several capital control measures with respect to the outbound remittance
of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board
resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic
entities shall hold income to account for previous years' losses before remitting the profits. Moreover, pursuant to Circular 3,
domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions,
contracts and other proof when completing the registration procedures in connection with an outbound invest.
On
October 23, 2019, SAFE issued the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or SAFE Circular 28.
Among others, SAFE Circular 28 relaxes the prior restrictions and allows the foreign-invested enterprises without equity investment as
in their approved business scope to use their capital obtained from foreign exchange settlement to make domestic equity investment as
long as the investments are real and in compliance with the foreign investment-related laws and regulations. In addition, SAFE Circular
28 stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and
overseas listing, for the purpose of domestic payments without providing authenticity certifications to the relevant banks in advance
for those domestic payments. According to the Circular on Optimizing the Administration of Foreign Exchange to Support the Development
of Foreign-related Business issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments using the
income under their capital accounts generated from their capital, foreign debt and overseas listing, without providing materials for
each transaction evidencing the authenticity in advance, provided that the capital usage is authentic and compliant with the current
capital account income usage management regulations.
Dividend
distribution
The
principal regulations governing distribution of dividends paid by wholly foreign-invested enterprises include the PRC Company Law, promulgated
in 1993 and amended in 2004, 2005, 2013 and 2018, and the Foreign Investment Law and its Implementation Rules.
Under
these regulations, a wholly foreign-invested enterprise in China, or a WFOE, may pay dividends only out of its accumulated profits, if
any, determined in accordance with PRC accounting standards and regulations. In addition, a WFOE is required to allocate at least 10%
of its accumulated profits each year, if any, to statutory reserve funds unless its reserves have reached 50% of the registered capital
of the enterprises. These reserves are not distributable as cash dividends. The proportional ratio for withdrawal of rewards and welfare
funds for employees shall be determined at the discretion of the WFOE. Profits of a WFOE shall not be distributed before the losses thereof
before the previous accounting years have been made up. Any undistributed profit for the previous accounting years may be distributed
together with the distributable profit for the current accounting year.
Pursuant
to the SAFE's Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment
through Special Purpose Vehicles, or SAFE Circular 37, issued and effective on July 4, 2014, and its appendices, PRC residents, including
PRC institutions and individuals, must register with local branches of the SAFE in connection with their direct establishment or indirect
control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets
or equity interest in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a "special purpose
vehicle." SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect
to the special purpose vehicle, including but not limited to increases or decreases of capital contributed by PRC individuals, share
transfer or exchange, merger, division or other material event.
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In
the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the
PRC subsidiaries of that special purpose vehicle may be prohibited from making distributions of profit to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities and the special purpose vehicle may be restricted in their ability to
contribute additional capital into its PRC subsidiary. And, failure to comply with the various SAFE registration requirements described
above could result in liability under PRC law for foreign exchange evasion, including (i) up to 30% of the total amount of foreign exchange
remitted overseas and deemed to have been evasive and (ii) in circumstances involving serious violations, a fine of no less than 30%
of and up to the total amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons at our
PRC subsidiaries who are held directly liable for the violations may be subject to criminal sanctions. These regulations apply to our
direct and indirect shareholders who are PRC residents and may apply to any offshore acquisitions and share transfer that we make in
the future if our shares are issued to PRC residents.
Stock
Option Rules
Pursuant
to the Circular on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly Listed Company issued by the SAFE on February 15, 2012, or the SAFE Circular 7, employees, directors, supervisors
and other senior management participating in any stock incentive plan of an overseas publicly listed company who are PRC citizens or
who are non PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required
to register with the SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete
certain other procedures. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit
their ability to contribute additional capital into their wholly foreign-owned subsidiaries in China and limit these subsidiaries'
ability to distribute dividends to their overseas parent company. The PRC agents shall, on behalf of the PRC residents who have the right
to exercise the employee share options, apply to the SAFE or its local branches for an annual quota for the payment of foreign currencies
in connection with the PRC residents' exercise of the employee share options. The foreign exchange proceeds received by the PRC
residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies
must be remitted into the bank accounts in the PRC opened by the PRC agents before distribution to such PRC residents. In addition, the
PRC agents shall file each quarter the form for record-filing of information of the Domestic Individuals Participating in the Stock Incentive
Plans of Overseas Listed Companies with the SAFE or its local branches. We and our PRC citizen employees who are granted share options,
or PRC option holders, will be subject to the SAFE Circular 7 after we have become an overseas listed company. If PRC option holders
fail to comply with the SAFE Circular 7, we and PRC option holders may be subject to fines and other legal sanctions.
In
addition, the State Administration for Taxation has issued circulars concerning employee share options, under which employees working
in the PRC who exercise share options will be subject to PRC individual income tax. our PRC subsidiaries have obligations to file documents
related to employee share options with relevant tax authorities and to withhold individual income taxes of those employees who exercise
their share options. If our employees fail to pay or if Scienjoy Inc. fail to withhold their income taxes as required by relevant laws
and regulations, we may face sanctions imposed by the PRC tax authorities or other PRC government authorities.
The
Administration Measures on Individual Foreign Exchange Control were promulgated by the PBOC on December 25, 2006, and their Implementation
Rules, issued by the SAFE on January 5, 2007, became effective on February 1, 2007 and amended on May 29, 2016. Under these regulations,
all foreign exchange matters involved in employee stock ownership plans and stock option plans participated in by onshore individuals,
among others, require approval from the SAFE or its authorized branch.
Regulations
Relating to Foreign Investment
The
Foreign Investment Law of the PRC, adopted by the National People's Congress on March 15, 2019 and its Implementing Regulation
adopted by the State Council on December 12, 2019 became effective on January 1, 2020. Pursuant to the Foreign Investment Law of the
PRC, China will grant national treatment to foreign invested entities, except for those foreign-invested entities that operate in industries
that fall within "restricted" or "prohibited" categories as prescribed in the "negative list" to
be released or approved by the State Council. On December 31, 2019, the Ministry of Commerce and the SAMR jointly promulgated the Measures
for Information Reporting on Foreign Investment, which became effective on January 1, 2020. Pursuant to the measures, where a foreign
investor directly or indirectly carries out investment activities in the PRC, the foreign investor or the foreign-invested enterprise
must submit the investment information to the competent commerce department for further handling.
On
December 27, 2021, the Ministry of Commerce and the NDRC promulgated the Special Administrative Measures for Entrance of Foreign Investment,
or the Negative List, which came into effect on January 1, 2022. Pursuant to the Negative List, foreign investors should refrain from
making investment in any of prohibited sectors specified in the Negative List, and foreign investors are required to obtain the permit
for access to other sectors that are listed in the Negative List but not classified as "prohibited."
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In
December 2020, the NDRC and the Ministry of Commerce promulgated the Measures for the Security Review of Foreign Investment, which came
into effect on January 18, 2021. The NDRC and the Ministry of Commerce will establish a working mechanism office in charge of the security
review of foreign investment. Such measures define foreign investment as direct or indirect investment by foreign investors in the PRC,
which include:
(i)
investment in new onshore
    projects or establishment of wholly foreign owned onshore companies or joint ventures with foreign investors;
(ii)
acquiring equity or asset
    of onshore companies by merger and acquisition; and (iii) onshore investment by and through any other means. Foreign investment in
    certain key areas with national security concerns, such as important cultural products and services, important information technology
    and Internet products and services, key technologies and others which results in the acquisition of de facto control of invested
    companies, shall be filed with a specifically established office before such investment is carried out. What may constitute "onshore
    investment by and through any other means" or "de facto control" is not clearly defined under such measures, and
    could be broadly interpreted. It is likely that control through contractual arrangement be regarded as de facto control based on
    provisions applied to security review of foreign investment. Failure to make such filing may subject such foreign investor to rectification
    within a prescribed period, and the foreign investor will be negatively recorded in the relevant national credit information system,
    which would then subject such investor to joint punishment as provided by relevant rules. If such investor fails to or refuses to
    undertake such rectification, it would be ordered to dispose of the equity or asset and to take any other necessary measures so as
    to return to the status quo and to erase the impact to national security.
Regulations
Relating to Protection of Minors and Real-Name Registration System
Pursuant
to the PRC Minors Protection Law (2020 Revision) which became effective on June 1, 2021, providers of network products and services may
not provide minors with products or services that induce addictive usage. Providers of network services such as online games, network
livestreaming, network audio and video, and social networking shall set up corresponding time management, authority management, consumption
management and other functions for minors who use their services.
In
addition, pursuant to the Internet Livestreaming Services Provisions, livestreaming service providers should verify the identity of users
on a livestreaming platform with their information such as through their mobile phone number. Also, according to the Administrative Measures
for Business Activities of Online Performances issued by Ministry of Culture on December 2, 2016 and in effect as of January 1, 2017,
livestreaming service providers must require streamers on a livestreaming platform to make real-name registration.
On
November 29, 2021, the Ministry of Culture and Tourism issued the Opinions of the General Office of the Ministry of Culture and Tourism
on Strengthening the Protection of Minors in Online Cultural Markets, which reiterates the necessity of comprehensive governance in the
field of culture and entertainment and the importance of network protection of minors. Pursuant to the opinions, (i) online cultural
service provider shall improve the ability to identify the accounts of users who are minors; (ii) online cultural service providers shall
not provide registration services for livestreaming publisher accounts for minors under the age of 16 and shall obtain prior consent
from the guardians of the users under age of 16-18 before providing account registration services to them; (iii) online cultural service
providers shall strictly protect personal information and take necessary measures in a timely manner to stop the cyberbullying and prevent
the spread of relevant information upon receiving notification from a minor who has been cyberbullying or his/her parents or other guardians;
(iv) online cultural service providers shall block harmful content to minors and prohibit live broadcast rooms from luring minors to
access harmful contents by displaying vulgar pictures, suggestive messages and private contact information such as phone numbers, WeChat
numbers and QR codes; (v) solo appearances of minors or appearances by adults of more than a certain duration and recognized as using
minors to accumulate popularity and profit by live rooms or short video accounts, or accounts that take the use of child models to attract
attention or profit from goods shall be seriously punished; (iv) online cultural service providers shall set up protection mechanisms
such as password lock, time lock, consumption limit, behavior tracking and uninstall and reinstall inheritance (anti-bypass) for minor-aged
users, to prevent loopholes such as theft, fraudulent use and borrowed accounts in time.
Regulations
on Online Music
On
November 20, 2006, the Ministry of Culture issued the Several Opinions of the Ministry of Culture on the Development and Administration
of Online Music, or the Online Music Opinions, which became effective on the same date. The Online Music Opinions provide that, among
other things, an Internet music service provider must obtain an Internet Culture Operation License. On October 23, 2015, the Ministry
of Culture promulgated the Circular on Further Strengthening and Improving the Content Administration of Online Music, effective as of
January 1, 2016, which provides that Internet culture operating entities shall report to a nationwide administrative platform the details
of its self-monitoring activities on a quarterly basis.
On
November 20, 2006, the Ministry of Culture issued the Several Opinions of the Ministry of Culture on the Development and Administration
of Online Music, or the Online Music Opinions, which became effective on the same date. The Online Music Opinions provide that, among
other things, an Internet music service provider must obtain an Internet Culture Operation License. On October 23, 2015, the Ministry
of Culture promulgated the Circular on Further Strengthening and Improving the Content Administration of Online Music, effective as of
January 1, 2016, which provides that Internet culture operating entities shall report to a nationwide administrative platform the details
of its self-monitoring activities on a quarterly basis.
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In
2010 and 2011, the Ministry of Culture greatly intensified its regulations on online music products by issuing a series of circulars
regarding online music industry, such as the Circular on Regulating the Market Order of Online Music Products and Renovating Illegal
Conducts of Online Music Websites and the Circular on Investigating Illegal Online Music Websites in 2010. In addition, the Ministry
of Culture issued the Circular on Clearing Illegal Online Music Products, which clarified that entities engaging in any of the following
conducts will be subject to relevant penalties or sanctions imposed by the Ministry of Culture: (i) providing online music products or
relevant services without obtaining corresponding qualifications; importing online music products that have not been reviewed by the
Ministry of Culture; or (iii) providing domestically developed online music products that have not been filed with the Ministry of Culture.
On
July 8, 2015, the National Copyright Administration issued the Circular regarding Ceasing Transmitting Unauthorized Music Products by
Online Music Service Providers, which requires that (i) all unauthorized music products on the platforms of online music services providers
shall be removed prior to July 31, 2015, and (ii) the National Copyright Administration investigate and punish the online music services
providers who continue to transmit unauthorized music products following July 31, 2015.
Regulations
Relating to Advertising Business
The
SAMR (formerly known as State Administration of Industry and Commerce) is the primary governmental authority regulating advertising activities
in China. Regulations that apply to the advertising business primarily include (i) the PRC Advertisement Law, promulgated by the SCNPC
on October 27, 1994 and most recently amended on April 29, 2021, and (ii) the Administrative Regulations for Advertising, promulgated
by the State Council on October 26, 1987 and which has been effective since December 1, 1987.
According
to the above regulations, companies that engage in advertising activities must obtain, from the SAMR or its local branches, a business
license, which specifically includes operating an advertising business in its business scope. Enterprises engaged in the advertising
business with such advertising business in its business scope do not need to apply for an advertising operation license, but such enterprise
cannot be a radio station, a television station, a newspaper and magazine publishing house or any entity otherwise specified in the relevant
laws or administrative regulations. The business license of an advertising company is valid for the duration of its existence, unless
the license is suspended or revoked due to a violation of any relevant laws or regulations.
PRC
advertising laws and regulations set certain content requirements for advertisements in China, including, among other things, prohibitions
on false or misleading content, misleading wording, (or) excess wordiness, socially destabilizing content or content involving obscenities,
superstition, violence, discrimination or infringement of the public interest. Advertisers, advertising agencies and advertising distributors
are required to ensure that the content of the advertisements they prepare or distribute is true and in complete compliance with applicable
laws. In providing advertising services, advertising operators and advertising distributors must review supporting documents provided
by advertisers for advertisements and verify that the content of the advertisements complies with applicable PRC laws and regulations.
Prior to distributing advertisements that are subject to government censorship and approval, advertising distributors are obligated to
confirm that such censorship has been performed and approval has been obtained. Violation of these regulations may result in penalties,
including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement
correcting the misleading information. Where serious violations occur, the SAMR or its local branches may revoke such offenders'
licenses or permits for their advertising business operations.
On
July 4, 2016, the SAMR issued the Interim Measures for the Administration of Internet Advertising, or the Internet Advertising Measures,
which became effective on September 1, 2016. According to the Internet Advertising Measures, Internet Advertising refers to commercial
advertising for direct or indirect marketing goods or services in the form of text, image, audio, video, or other means through websites,
web pages, Internet apps, or other Internet media. The Internet Advertising Measures specifically set out the following requirements:
(i) advertisements must be identifiable and marked with the word "advertisement" enabling consumers to distinguish them from
non-advertisement information; (ii) sponsored search results must be clearly distinguished from organic search results; (iii) it is forbidden
to send advertisements or advertisement links by email without the recipient's permission or induce Internet users to click on
an advertisement in a deceptive manner; and (iv) Internet information service providers that do not participate in the operation of Internet
advertisements must stop publishing illegal advertisements if they have known or should know that the advertisements are illegal.
On
March 9, 2020, the SAMR promulgated the Notice on the issuance of the "Key Points of the Inter-Ministry Joint Conference on Rectifying
False and Illegal Advertising in 2020" and the "Work System of the Inter-Ministry Joint Conference on Rectifying False and
Illegal Advertising." According to the above regulations, the SAMR will study and strengthen the supervision of emerging advertising
formats, especially key platforms and key media, and supervise Internet platforms to consciously fulfill their legal obligations and
responsibilities to verify relevant certification documents and advertising contents, as well as avoiding publishing false and illegal
advertisements.
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On
November 26, 2021, the SAMR published the Draft Administrative Measures on Internet Advertising for public comment, or the Draft Measures
on Internet Advertising, which requires that users should be able to close pop-up advertisements using one button and provide that the
pop-up advertisements shall not contain a countdown timer or require more than one click to close and shall not pop up more than once
on the same page. In addition, the Draft Measures on Internet Advertising provides that internet advertising operators and distributers
shall establish a system for registering and reviewing advertisers and advertisements and verify and update such system on a regular
basis. Platform operators that provide internet information services are required to inspect the content of advertisements displayed
and published by using their information services and cooperate with market supervision administration authorities to inspect advertisements
and provide information and evidence on alleged illegal advertisements requested by such authorities. The Draft Measures on Internet
Advertising also provides that advertising via livestreaming is subject to the new rules. Further, the Draft Measures prohibits internet
operators from publishing advertisement on after-school training for primary school and middle school students and kindergarteners and
prohibits advertisements for certain items on internet media that targets minors, including, among others, advertisements related to
online games that are harmful to the physical or mental health of minors, cosmetics, alcohol or beauty.
Regulation
on Tax
On
March 23, 2016, the Ministry of Finance and the SAT issued the Notice of Taxation on Implementing the Pilot Program of Replacing Business
Tax with Value-Added Tax in an All-round Manner, pursuant to which the pilot plan for the replacement of business tax with VAT was expanded
to all regions and industries as of May 1, 2016.
The
PRC enterprise income tax is calculated based on the taxable income determined under the PRC Enterprise Income Tax Law and its implementation
rules. On March 16, 2007, the National People's Congress of China enacted the PRC Enterprise Income Tax Law, which became effective
on January 1, 2008 and was subsequently amended on February 24, 2017 and December 29, 2018. On December 6, 2007, the State Council promulgated
the implementation rules to the PRC Enterprise Income Tax Law, which was effective in 2008 and was amended in 2019.
Under
the PRC Enterprise Income Tax Law, an enterprise established outside China with "de facto management bodies" within China
is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise
income tax rate on its worldwide income. A circular issued by the State Taxation Administration in April 2009 and amended in 2017 regarding
the standards used to classify certain Chinese invested enterprises controlled by Chinese enterprises or Chinese enterprise groups and
established outside of China as "resident enterprises," or the SAT Circular 82, clarified that dividends and other income
paid by such PRC "resident enterprises" will be considered PRC source income and subject to PRC withholding tax, currently
at a rate of 10% when paid to non PRC enterprise shareholders. This circular also subjects such PRC "resident enterprises"
to various reporting requirements with the PRC tax authorities. Under the implementation regulations to the PRC Enterprise Income Tax
Law, a "de facto management body" is defined as a body that has material and overall management and control over the manufacturing
and business operations, personnel and human resources, finances and properties of an enterprise. On July 27, 2011, the SAT issued the
Administrative Measures of Enterprise Income Tax of Chinese-Controlled Offshore Incorporated Resident Enterprises (Trial), or SAT Bulletin
45, which became effective on September 1, 2011. Such administrative measures further provide guidance on residence status determination
and post-determination administration as well as the relevant procedures for competent tax authorities.
According
to the SAT Circular 82 and SAT Bulletin 45, a Chinese-controlled offshore-incorporated enterprise will be regarded as a PRC tax resident
by virtue of having its "de facto management body" in China and will be subject to PRC enterprise income tax on its global
income only if all of the following conditions set forth in Circular 82 are met: (i) the primary location of the day-to-day operational
management is in the PRC; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject
to approval by organizations or personnel in the PRC; (iii) the enterprise's primary assets, accounting books and records, company
seals and board and shareholder resolutions are located or maintained in the PRC; and (iv) 50% or more of voting board members or senior
executives habitually reside in the PRC.
We
do not meet all of the conditions set forth in SAT Circular 82. Therefore, we believe that we should not be treated as a "resident
enterprise" for PRC tax purposes even if the standards for "de facto management body" prescribed in the SAT Circular
82 are applied to us. For example, certain of our minutes and files of the resolutions of our board of directors and the resolutions
of our shareholders are maintained outside the PRC. However, it is possible that the PRC tax authorities may take a different view. See
"Item 3. Key Information—3.D. Risk Factors—Risks Related to Doing Business in China—Under the PRC enterprise
income tax law, we may be classified as a PRC "resident enterprise," which could result in unfavorable tax consequences to
us and our shareholders and have a material adverse effect on our results of operations and the value of your investment."
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On
February 3, 2015, the SAT issued the Notice on Several Issues Concerning Enterprise Income Tax for Indirect Assets Transfer by Non-PRC
Resident Enterprises, as amended in 2017, or SAT Circular 7. Pursuant to SAT Circular 7, an "indirect transfer" of assets,
including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be recharacterized and treated as a direct
transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose
of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax. When determining whether there is a "reasonable commercial purpose" of the transaction arrangement, features
to be taken into consideration include, inter alia, whether the main value of the equity interest of the relevant offshore enterprise
derives directly or indirectly from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct
or indirect investment in China or if its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries
directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure.
According to SAT Circular 7, where the payor fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to
the tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest.
SAT Circular 7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired
on a public stock exchange. On October 17, 2017, the SAT issued the Circular on Issues of Tax Withholding of Income Tax of Non-resident
Enterprise at Source, or SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting
and payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation
and application of SAT Circular 7. SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions
or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved.
A
PRC resident enterprise which distributes dividends to its non-PRC shareholders should withhold PRC income tax at a rate of 10% according
to PRC law. However, pursuant to the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of
Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, if the beneficial owner of the dividends is a Hong
Kong resident enterprise, which directly holds at least 25% of the equity interest of the aforesaid enterprise (i.e., the dividend distributor),
the tax levied shall be 5% of the distributed dividends. Meanwhile, the Announcement of the State Administration of Taxation on Issues
Relating to "Beneficial Owner" in Tax Treaties has stipulated some factors that are unfavorable to the determination of "beneficial
owner," particularly in the case of holding companies.
In
addition, pursuant to the Circular of the State Taxation Administration on Relevant Issues Relating to the Implementation of Dividend
Clauses in Tax Treaties, which was issued by the SAT on February 20, 2009, for a tax resident of the counterparty to the tax treaty to
be entitled to such tax treatment specified in the tax treaty for with respect to the dividends paid to it by a Chinese resident company,
all of the following requirements should be satisfied: (i) the tax resident who obtains dividends should be a company as provided in
the tax treaty; (ii) the equity interests and the voting shares of the Chinese resident company directly owned by such tax resident is
at least a specified percentage; and (iii) the capital ratio of the Chinese resident company directly owned by such tax resident is at
least the percentage specified in the tax treaty at any time within 12 months prior to acquiring the dividends.
Regulations
Relating to Labor and Social Insurance
The
principal laws that govern employment include (i) the PRC Labor Law, promulgated by the SCNPC on July 5, 1994, which has been effective
since January 1, 1995 and most recently amended on December 29, 2018, and (ii) the PRC Labor Contract Law, promulgated by the SCNPC on
June 29, 2007 and amended on December 28, 2012.
According
to the PRC Labor Law and the PRC Labor Contract Law, employers must execute written labor contracts with full-time employees. All employers
must compensate their employees with wages equal to at least the local minimum wage standards. All employers are required to establish
a system for labor safety and sanitation, strictly comply with state rules and standards and provide employees with workplace safety
training. Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative
penalties. For serious violations, criminal liability may arise.
In
addition, an employer is obligated to sign an indefinite term labor contract with an employee if the employer continues to employ the
employee after two consecutive fixed term labor contracts. The employer also has to pay compensation to the employee if the employer
terminates an indefinite term labor contract. Moreover, employers in China are required to provide employees with welfare schemes covering
pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.
According
to the PRC Social Insurance Law promulgated by the National People's Congress of the PRC on October 28, 2010, effective since July
1, 2011 and amended on December 29, 2018, together with other relevant laws and regulations, an employer that fails to make social insurance
contributions may be ordered to pay the required contributions within a stipulated deadline and be subject to a late fee. If the employer
still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine
ranging from one to three times the amount overdue. According to the Regulations on Administration of Housing Fund promulgated by the
State Council on April 3, 1999 and amended in 2002 and 2019 respectively, an enterprise that fails to make housing fund contributions
may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application
may be made to a local court for compulsory enforcement.
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Regulations
Relating to Anti-monopoly Matters related to Internet Platform Companies
The
PRC Anti-monopoly Law, which took effect on August 1, 2008, prohibits monopolistic conduct such as entering into monopoly agreements,
abusing market dominance and concentration of undertakings that may have the effect of eliminating or restricting competition. The PRC
Anti-monopoly Law requires that the anti-monopoly law enforcement agency be notified in advance of any transaction where the parties'
turnover in the China market and/or global market exceed certain thresholds and the buyer would obtain control of, or decisive influence
over, the target as a result of the business combination. As further clarified by the Provisions of the State Council on the Threshold
of Filings for Undertaking Concentrations issued by the State Council in 2008 and amended in September 2018, such thresholds include
(i) the total global turnover of all operators participating in the transaction exceeds RMB10 billion in the preceding fiscal year and
at least two of these operators each had a turnover of more than RMB400 million within China in the preceding fiscal year, or (ii) the
total turnover within China of all the operators participating in the transaction exceeded.
RMB2
billion in the preceding fiscal year, and at least two of those operators that had a turnover of more than RMB400 million within China
in the preceding fiscal year. There are numerous factors the Anti-monopoly law enforcement agency considers in determining "control"
or "decisive influence," and, depending on certain criteria, the Anti-monopoly law enforcement agency may conduct Anti-monopoly
review of transactions in respect of which it was notified.
On
October 23, 2021, the SCNPC issued a discussion draft of the amended Anti-monopoly Law, which proposes that the relevant authority shall
investigate a transaction where there is any evidence that the concentration has or may have the effect of eliminating or restricting
competitions, even if such concentration does not reach the filing threshold.
On
September 11, 2020, the SAMR issued the Anti-monopoly Compliance Guideline for Operators, which requires, under the PRC Anti-monopoly
Law, operators to establish Anti-monopoly compliance management systems to prevent Anti-monopoly compliance risks.
On
February 7, 2021, the Anti-monopoly Bureau of the State Council officially promulgated the Guidelines to Anti-monopoly in the Field of
Internet Platforms, or the Anti-monopoly Guidelines on Platform Economies. Pursuant to an official interpretation from the Anti-monopoly
Bureau of the State Council, the Anti-monopoly Guidelines on Platform Economies mainly covers five aspects, including general provisions,
monopoly agreements, abusing market dominance, concentration of undertakings, and abusing of administrative powers eliminating or restricting
competition. The Anti-monopoly Guidelines on Platform Economies prohibits certain monopolistic acts of Internet platforms so as to protect
market competition and safeguard interests of users and undertakings participating in Internet platform economy, including without limitation,
prohibiting platforms with dominant position from abusing their market dominance (such as discriminating customers in terms of pricing
and other transactional conditions using big data and analytics, coercing counterparties into exclusivity arrangements, using technology
means to block competitors' interface, favorable positioning in search results of goods displays, using bundle services to sell
services or products, compulsory collection of users' unnecessary data). In addition, the Anti-monopoly Guidelines on Platform
Economies also reinforces antitrust merger review for Internet platform related transactions to safeguard market competition.
On
August 17, 2021, the SAMR issued the Provisions on Preventing Online Unfair Competition (Draft for Public Comments), or the Draft Provisions
on Preventing Online Unfair Competition, which aims to regulate the unfair competition behaviors of business operators through Internet
and other information networks. The Draft Provisions on Preventing Online Unfair Competition provides, among others, business operators
should not use any technical means to impede, interfere or conduct unfair competition behaviors.
Regulations
Relating to M&A and Overseas Listings
On
August 8, 2006, six PRC governmental agencies jointly promulgated the Regulations on Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006, and were amended on June 22, 2009. The M&A
Rules require offshore special purpose vehicles formed to pursue overseas listing of equity interests in PRC companies and controlled
directly or indirectly by PRC companies or individuals to obtain the approval of the China Securities Regulatory Commission, or the CSRC,
prior to the listing and trading of such special purpose vehicle's securities on any stock exchange overseas. The M&A Rules
also establish procedures and requirements that could make some acquisitions of PRC companies by foreign investors more time consuming
and complex, including requirements in some instances that the Anti-monopoly law enforcement agency be notified in advance of any change-of-control
transaction in which a foreign investor takes control of a PRC domestic enterprise.
In
addition, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors
issued by the Ministry of Commerce in 2011 specify that mergers and acquisitions by foreign investors that raise "national defense
and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic
enterprises and that raise "national security" concerns are subject to strict review by the Ministry of Commerce, and prohibit
any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control
arrangement.
On
July 6, 2021, the General Office of the State Council and General Office of the Central Committee of the Communist Party of China issued
Opinions on Strictly Cracking Down Illegal Securities Activities in accordance with the Law. The opinions emphasized the need to strengthen
the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed
to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced
by China-based overseas-listed companies.
82
On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises,
or the Trial Measures, which will become effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules
No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic
Enterprises and relevant CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC's official
website. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic principles of the Draft Administrative
Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing
by domestic enterprises. Under the Trial Measures and the Guidance Rules and Notice, domestic enterprises conducting overseas securities
offering and listing, either directly or indirectly, shall complete filings with the CSRC pursuant to the Trial Measures' requirements
within three working days following the submission of an application for initial public offering or listing. Starting from March 31,
2023, enterprises that have been listed overseas or satisfy all of the following conditions shall be deemed as "Grandfathered Issuers"
and are not required to complete the overseas listing filing immediately, but shall complete filings as required if they conduct refinancing
or are involved in other circumstances that require filing with the CSRC: (i) the application for indirect overseas offering or listing
shall have been approved by the relevant overseas regulatory authority or stock exchange prior to March 31, 2023 (as the SEC does not
approve or disapprove of an offering, this requirement is interpreted to be the SEC's declaration of the registration statement
to be effective with respect to this offering), (ii) the enterprise is not required to reapply for the approval of the relevant overseas
regulatory authority or stock exchange, and (iii) such overseas securities offering or listing shall be completed before September 30,
2023. Starting from March 31, 2023, domestic enterprises that have submitted valid applications for overseas offerings and listing but
have not obtained the approval from relevant overseas regulatory authority or overseas stock exchange shall complete filings with the
CSRC prior to their overseas offering and listings. The Company shall be subject to filling in CSRC for its issuance of new securities
in the same overseas public market or being listed in other public markets for its offerings. The Trial Measures and other relevant regulations
or rules may be published by CSRC and other governmental authorities subsequently, if any, may also ask for high requirements or put
restrictions and even prohibitions against the Company's further financing and actions for issuance of new securities.
C.
Organizational Structure
We
are a British Virgin Islands holding company and conduct our operations in the People's Republic of China (the "PRC")
through contractual arrangements with the VIEs, including Zhihui Qiyuan and Sixiang Qiyuan and their subsidiaries, and through our WFOEs
and the wholly owned subsidiaries of WFOEs. Through our Hong Kong subsidiary Scienjoy International Limited, we own a direct equity interest
in our WFOEs, including WXBJ and WXZJ. WXBJ, Zhihui Qiyuan and Zhihui Qiyuan's registered shareholders are parties to the VIE agreements,
pursuant to which the profits of Zhihui Qiyuan and its subsidiaries, each such company formed under PRC Laws, are directly or indirectly
payable to WXBJ. WXZJ, Sixiang Qiyuan and Sixiang Qiyuan's registered shareholders are parties to the VIE agreements, pursuant
to which the profits of Sixiang Qiyuan and its subsidiaries, each such company formed under PRC Laws, are directly or indirectly payable
to WXZJ. Any failure by any of the VIEs or their respective shareholders to perform their obligations under these contractual arrangements,
would have a material adverse effect on our business.
See "Risk Factors—Risks Related to Our Corporate Structure."
The
following diagram depicts our current organizational structure. Unless otherwise indicated, equity interests depicted in this diagram
are held 100%. The relationship between WXBJ, Zhihui Qiyuan, and the relationship between WXZJ and Sixiang Qiyuan is each governed by
contractual arrangements and does not constitute equity ownership.
The
Company's current organizational structure and the VIEs' current organizational structure are as follows:
Contractual
Arrangements among WFOEs, the VIEs and the Shareholders of the VIEs
Current
PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication
services, and certain other business. We are a company registered in the British Virgin Islands. To comply with PRC laws and regulations,
we primarily conduct our business in China through (i) our PRC subsidiaries and (ii) the VIEs based on a series of contractual arrangements
by and among the WFOEs, the VIEs and the shareholders of the VIEs. We have evaluated the guidance in FASB ASC 810 and concluded that
we are the primary beneficiary of the VIEs because of these contractual arrangements. Accordingly, under U.S. GAAP, the financial statements
of the VIEs are consolidated as part of our financial statements. The following is a summary of all the VIE arrangements that enable
us to receive substantially all of the economic benefits from the VIEs' operations and be the primary beneficiary of the VIEs for
accounting purposes.
83
Contracts
between the Company and the Zhihui Qiyuan VIEs
Exclusive
Option Agreement.
Pursuant
to the exclusive option agreement (including its amendment or supplementary agreements, if any) amongst WXBJ (our WFOE), Zhihui Qiyuan
and the registered shareholders who collectively owned all of Zhihui Qiyuan, the registered shareholders irrevocably granted WXBJ or
its designated party, an exclusive option to purchase all or part of the equity interests held by the registered shareholders in Zhihui
Qiyuan, when and to the extent permitted under PRC law, at an amount equal to the lowest permissible purchase price as set by PRC law.
Zhihui Qiyuan cannot declare any profit distributions, or create any encumbrances in any form without the prior written consent of WXBJ.
The registered shareholders must remit in full any funds received from Zhihui Qiyuan to WXBJ, in the event any distributions are made
by the VIE pursuant to any written consents of WXBJ.
The
Exclusive Option Agreement shall remain effective for twenty (20) years and shall be automatically extended for an additional period
of one (1) year. The additional period automatically enters the renewal extension of one (1) year at the end of each extended additional
period. WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days' prior termination notice.
Power
of Attorney Agreements.
Each
registered shareholders of Zhihui Qiyuan entered into a power of attorney agreement (including its amendment or supplementary agreements,
if any) whereby such registered shareholders granted an irrevocable proxy of the voting rights underlying their respective equity interests
in Zhihui Qiyuan to WXBJ, which includes, but are not limited to, all the shareholders' rights and voting rights empowered to such
registered shareholders by the PRC company law and Zhihui Qiyuan's Article of Association. The power of attorney remains irrevocable
and continuously valid from the date of execution so long as each such shareholder remains as a shareholder of Zhihui Qiyuan.
Share
Pledge Agreement.
Pursuant
to the share pledge agreement (including its amendment or supplementary agreements, if any) among WXBJ, Zhihui Qiyuan and the registered
shareholders of Zhihui Qiyuan, such registered shareholders have pledged all their equity interests in Zhihui Qiyuan to guarantee the
respective performance of Zhihui Qiyuan and such shareholders obligations under the Exclusive Option Agreement, Exclusive Business Cooperation
Agreement and Power of Attorney Agreement, as applicable.
If
Zhihui Qiyuan or any of its shareholders breaches its contractual obligations under any of other VIE agreements, WXBJ, as pledgee, will
be entitled to certain rights, including the right to sell the pledged equity interests. The registered shareholders of Zhihui Qiyuan
agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in Zhihui Qiyuan without
the prior written consent of WXBJ. The Share Pledge Agreement shall be continuously valid until all obligations under the VIE agreements
have been fulfilled, or the VIE agreements are terminated, or the secured debts has been fully executed.
Contracts
that enable us to receive substantially all of the economic benefits from the Zhihui Qiyuan VIEs
Exclusive
Business Cooperation Agreements
Pursuant
to the exclusive business cooperation agreement (including its amendment or supplementary agreements, if any) between WXBJ and Zhihui
Qiyuan, WXBJ is to provide exclusive business support, technical and consulting services related to all technologies needed for its business
in return for fees. The service fees may be adjusted by WXBJ based on the following factors:
●
complexity and difficulty
    of the services pursuant to the business cooperation agreement to Zhihui Qiyuan during the month (the "Monthly Services");
●
the number of WXBJ's
    employees who provided the Monthly Services and the qualifications of the employees;
●
the number of hours WXBJ's
    employees spent to provide the Monthly Services;
●
nature and value of the
    Monthly Services;
●
market reference price;
    and
●
Zhihui Qiyuan's operating
    conditions for the month.
The
term of the Exclusive Business Cooperation Agreement is twenty (20) years and shall be automatically extended for an additional period
of one (1) year. The additional period automatically enters the renewal extension of one (1) year at the end of each extended additional
period. Besides, WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days' prior termination
notice.
84
Based
on the foregoing VIE arrangements, which obligate WXBJ to absorb all of the risk of loss from their activities and enable WXBJ to receive
all of their expected residual returns, the Company accounts for Zhihui Qiyuan as a VIE. Accordingly, the Company consolidates the accounts
of Zhihui Qiyuan for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission
("SEC") and Accounting Standards Codification ("ASC") 810-10, Consolidation.
Contractual
Arrangements among WXZJ, Sixiang Qiyuan, and the Shareholders of Sixiang Qiyuan.
Exclusive
Option Agreement.
Pursuant
to the exclusive option agreement (including any supplementary agreement thereto, if any) entered into by and among WXZJ, Sixiang Qiyuan
and all the shareholders of Sixiang Qiyuan, the shareholders of Sixiang Qiyuan hereby irrevocably grant to WXZJ or its designee, to the
extent permitted by the laws of the People's Republic of China, the exclusive right to purchase all or part of the equity interest
held by such shareholders at the lowest purchase price permitted by the laws of the People's Republic of China. Without the written
consent of WXZJ, Sixiang Qiyuan may not distribute any profits or create any encumbrance in any manner. If Sixiang Qiyuan makes the profit
distribution with WXZJ's written consent, Sixiang Qiyuan's shareholders shall pay all of any funds received by them to WXZJ.
The
term of the exclusive option agreement is twenty years and will be automatically renewed for one year. Upon the expiration of each renewed
term, the exclusive option agreement will be automatically renewed for one year. In the meantime, WXZJ shall have the right to terminate
the exclusive option agreement at any time by giving a three days' prior notice.
Power
of Attorney Agreements.
WXZJ
has entered into a power of attorney agreement (the "Power of Attorney," including any supplementary agreements, if any)
with each shareholder of Sixiang Qiyuan, pursuant to which each such shareholder grants the proxy rights to WXZJ in connection with his
equity interest in Sixiang Qiyuan, including, without limitation, all the shareholders' beneficial rights and voting rights conferred
by the Company Law of the People's Republic of China and the Articles of Association of Sixiang Qiyuan. Each power of attorney
agreement shall be irrevocable from the date of execution and shall continue to be valid until the relevant shareholder no longer holds
Sixiang Qiyuan's equity interest.
Share
Pledge Agreement.
Pursuant
to the share pledge contract (including any supplementary agreement thereto, if any) entered into by and among WXZJ, Sixiang Qiyuan and
each of the shareholders of Sixiang Qiyuan, each shareholder of Sixiang Qiyuan has pledged all of Sixiang Qiyuan's equity interest
held by such shareholder to guarantee the respective performance of Sixiang Qiyuan and such shareholder under the exclusive option contract,
the exclusive business cooperation agreement and the power of attorney agreement, as applicable.
If
Sixiang Qiyuan or any of its shareholders breaches its contractual obligations under any VIE agreements, WXZJ, as the pledgee, will have
certain rights, including the sale of the pledged equity interest. The shareholders agree that, without the prior written consent of
WXZJ, they shall not transfer, sell, pledge, dispose of or in any other manner create any new encumbrance upon their equity interest
in Sixiang Qiyuan. The share pledge agreement shall remain effective until all obligations under the VIE agreements have been performed,
or the VIE agreements have been terminated, or all obligations under the VIE agreements have been fully performed.
Contracts
that enable us to receive substantially all of the economic benefits from the Sixiang Qiyuan VIEs
Exclusive
Business Cooperation Agreement
In
accordance with the exclusive business cooperation agreement between WXZJ and Sixiang Qiyuan (including supplementary agreements thereto,
if any), WXZJ will provide Sixiang Qiyuan with exclusive business support and all business-related technologies and consulting services
in order to obtain the fees equal to the consolidated net income of Xiuli (Zhejiang) Culture Tech Co., Ltd., Leku (Zhejiang) Culture
Tech Co., Ltd., Haifan (Zhejiang) Culture Tech Co., Ltd., Xiangfeng (Zhejiang) Culture Tech Co., Ltd. and Hongren (Zhejiang) Culture
Tech Co., Ltd. after deducting losses of the previous year (if any). WXZJ may adjust the service fees according to the following factors:
●
Quarterly based on the
    complexity and difficulty of the services provided pursuant to the exclusive business cooperation agreement during such quarter ("Quarterly
    Services");
●
the number of WXZJ's
    employees who provided the Quarterly Services and the qualifications of these employees;
●
The number of hours WXZJ's
    employees spent to provide the Quarterly Services;
●
The nature and value of
    the Quarterly Services;
●
market reference
    price; and
●
Sixiang Qiyuan's
    operating conditions.
85
The
term of the exclusive business cooperation agreement is twenty years and is automatically renewable for one year. Upon the expiration
of each renewal term, the agreement can be automatically renewed for one year. In addition, WXZJ shall have the right to terminate this
agreement at any time by giving a three-day notice on the termination of this Agreement.
We
have been advised by Beijing Feng Yu Law Firm (北京锋昱律师事务所) ("Feng
Yu Law Firm"), our PRC legal counsel:
●
based on its understanding
    of the relevant laws and regulations, is of the opinion that, subject to the judicial interpretations of the PRC laws or legislative
    interpretation of the PRC laws by PRC government authority, each of the VIE contracts among WXBJ, Zhihui Qiyuan and its registered
    shareholders is valid, binding and enforceable in accordance with its terms and does not violate current effective applicable PRC
    Laws.
●
based on its understanding
    of the relevant laws and regulations, is of the opinion that, subject to the judicial interpretations of the PRC laws or legislative
    interpretation of the PRC laws by PRC government authority, each of the VIE contracts among WXZJ, Sixiang Qiyuan and its registered
    shareholders is valid, binding and enforceable in accordance with its terms and does not violate current effective applicable PRC
    Laws.
However,
our PRC legal counsel has advised that there are substantial uncertainties regarding the interpretation and application of current and
future PRC laws, rules and regulations. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to
the opinion of our PRC legal counsel. Our PRC legal counsel has further advised that if the PRC government finds that the agreements
that establish the structure for operating our Internet related value-added business do not comply with PRC government restrictions on
foreign investment in the aforesaid business we and the VIEs engage in, we and the VIEs could be subject to severe penalties including
being prohibited from continuing operations. See
"Risk Factors—Risks Factors Related to Our Corporate Structure."
See "Risk Factors—Risk Factors Related to Doing Business in China."
D.
Property, Plants and
    Equipment
Our
principal executive offices are located at RM 1118, 11
th
Floor, Building 3, No. 99 Wangzhou Rd., Liangzhu St., Yuhang District,
Hangzhou, Zhejiang Province, 311113, China, where we lease approximately 6,764 square meters of office space as of the date of this
report. We and our subsidiaries also lease an additional approximately 2,600 square meters of office space in Beijing and Xinjiang Uyghur
Autonomous Region, P.R. China.
ITEM
4A. UNRESOLVED STAFF COMMENTS
Not
Applicable
ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You
should read the following discussion and analysis of our financial condition and results of operations in conjunction with our combined
financial statements and consolidated financial statements and the related notes included in this annual report. This discussion contains
forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially
from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk
Factors" and elsewhere in this annual report.
A.
Operating Results
Overview
We
were originally incorporated on May 2, 2018 as a British Virgin Islands exempted company for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On May 7, 2020,
we consummated the acquisition of Scienjoy Inc. As a result of the business combination, we became the holding company of Scienjoy Inc.
and we changed our name from "Wealthbridge Acquisition Limited" to "Scienjoy Holding Corporation."
We
are a leading provider of mobile entertainment live streaming platforms in China and operates its platforms on both PC and mobile apps,
through which users can enjoy immersive and interactive entertainment live streaming. We had approximately 320.2 million registered users
by the end of December 31, 2022, increased from 267.1 million registered users for the year ended December 31, 2021.
86
We
adopt a multi-platform strategy and all platforms are categorized as "SHOW live streaming" in which professional broadcasters
provide live streaming entertainment for users primarily in the form of performances (such as singing, dancing, and talk shows). Broadcasters
on all platforms have been professionally trained by relevant broadcaster agents to provide more professional content. Despite the similarity
in contents, the different platforms adopt different operation strategies, such as, to name a few, different broadcaster policy, events,
promotion, and games. We provide a technological infrastructure to enable broadcasters, online users and viewers to interact with each
other during live streaming. All platforms can be accessed for free. We mainly derive our revenue from sales of virtual items on the
platforms. Users can purchase virtual currency to purchase virtual items for use on the platforms. Users can recharge their virtual currency
on the platforms through various online third-party payment platforms, such as WeChat Pay or AliPay.
On
August 10, 2020, we signed an Equity Acquisition Framework Agreement (the "BeeLive Acquisition Agreement") with Sciscape
International Limited, Tianjin Guangju Dingfei Technology Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co.,
Ltd. Pursuant to the BeeLive Acquisition Agreement, we, through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International
Limited which holds the platform BeeLive International and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest
in Tianjin Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required
to pay (i) a cash consideration of RMB50.0 million and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class
A ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions and
requirements over the following three years. On August 21, 2020, all target shares were transferred to the parties designated in BeeLive
Acquisition Agreement. On September 10, 2020, we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology
Co., Ltd. and issued 3,786,719 Class A Ordinary Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently
changed its name to Sixiang Mifeng (Tianjin) Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.
BeeLive is a global live streaming platform that initially launched in China in November 2016. During the second half of 2019, BeeLive
began expanding into international markets. To date, BeeLive International offers Arabic language live streaming product in the Middle
East and Thai language live streaming product in Southeast Asia.
On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the "Framework Agreement")
with Golden Shield Enterprises Limited ("Golden Shield"), Beijing Weiliantong Technology Co., Ltd. ("Weiliantong",
together with Golden Shield, the "Target Companies", and each a "Target Company"), Tianjin Yieryi Technology
Co., Ltd. ("Yieryi"), Wolter Global Investment Limited ("Wolter Global", together with Yieryi, the "Sellers",
and each a "Seller") and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) ("Weilaijin"),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the "Acquisitions").
Yieryi and Wolter Global are under common control.
The
transactions contemplated under the Framework Agreement have closed on January 1, 2022 (the "Closing"). Upon the closing
of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong and
Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the "Weilaijin Share Consideration"), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the "Wolter Global Share Consideration").
In
January 2022, SG consummated the acquisition of the 100% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. ("CDZH")
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. ("HYDC") from its original shareholders for
a cash consideration of RMB100,000 (US$15,692). We believe the acquisition of CDZH and HYDC will help to enrich the product lines, expand
the user base and commercialize the growth potential in the live streaming market.
On
April 7, 2022, Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd ("QYHZ") and its several wholly owned subsidiaries were
established in Zhejiang, PRC to provide information technology service. QYHZ is controlled through contractual agreement in lieu of direct
equity ownership by WXZJ.
87
In
December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts
of the world in the first half of 2020, which has caused significant volatility in the PRC and international markets. After the initial
outbreak of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the
infections caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai
in 2022, and a series of restrictions and quarantines were implemented to contain the spread. Our Beijing and Hangzhou office did not
work at full capacity for approximately two months when these restrictive measures are in force, which negatively affected our operational
and financial results. Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread
of the COVID-19 virus have been revoked or replaced with more flexible measures since December 2022. While the revocation or replacement
of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on our normal operations, the extent of the
impact on the Company's future financial results will be dependent on future developments such as the length and severity of the
crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19
pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.
Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations,
financial condition, liquidity and results of operations if the current situation continues.
Key
Factors Affecting Our Results of Operations
General
Factors
Development
of the mobile live streaming market in China over the past decade has been influenced by a number of macroeconomic and technological
factors and trends, including increasing disposable income and demand for cultural and entertainment activities and increased use of
the mobile internet. Our business and operating results are affected by general factors affecting China's entertainment live streaming
industry, which may include the following:
●
China's overall macroeconomic
    landscape
●
China's overall entertainment
    and mobile entertainment growth
●
Usage and penetration rate
    of mobile Internet and mobile payment
●
Growth and competitive
    landscape of China's mobile live streaming market, especially entertainment SHOW live streaming
●
Governmental policies affecting
    China's live streaming industry
Unfavorable
changes in any of these general industry conditions could negatively affect demand for our services and materially and adversely affect
its results of operations.
Specific
Factors
While
our business is influenced by general factors affecting the mobile live streaming industry in China, we believe our results of operations
are more directly affected by company specific factors, including the following major factors:
Our
ability to retain broadcasters and enhance user experience
We
continue to improve our operational capability with more attractive contents, such as music, dancing, talk shows, traditional drama,
online competitions and offline events, to further enhance user experience. We are offering different contents and games to attract more
users to pay for our services and to pay more money per user as well. Therefore quality broadcasters and interesting contents are essential
to our operations. In order to retain quality broadcasters, we have developed a revenue sharing policy, pursuant to which we share revenues
generated on the platforms with talents agencies, which in turn share revenues with broadcasters. Additionally, in order to maintain
the quality of broadcasters and service, we are very cautious in hiring broadcasters and has adopted strict operation procedures for
screening broadcasters before hiring. We primarily work with professional agents to identify and retain new broadcasters. The increasing
number of trained broadcasters, who provide better quality performance, also contributes to improved ARPPU and paying ratio of Scienjoy
Inc.
Our
ability to maintain and expand our user base
User
base is another key factor for success in the mobile live streaming industry. We endeavor to provide attractive content to keep users
on its platforms as long as possible. Our multi-platform strategy attempt to retain users by providing diversified content, promotions
and an enhanced user experience.
With
respect to user base, mobile SHOW live streaming sector differs from other mobile live streaming sectors such as pan entertainment live
streaming and game live streaming sector. Because, for SHOW live streaming, each broadcaster interacts in real time with users and therefore
the number of users that each broadcaster can entertain at the same period in his/her video room is limited.
We
continue to seek opportunities to grow our user base and enhance our user engagement. Our ability to do so largely depends on our ability
to recruit, train, and retain high quality broadcasters and our ability to produce high quality content. We also intend to continue to
invest in our brand recognition.
88
We
intend to further explore overseas markets to expand our business and user base through both organic expansion and selective investments.
On August 10, 2020, we signed an Equity Acquisition Framework Agreement (the "BeeLive Acquisition Agreement") with Sciscape
International Limited, Tianjin Guangju Dingfei Technology Co., Ltd., Cosmic Soar Limited and Tianjin Guangju Dingsheng Technology Co.,
Ltd. Pursuant to the BeeLive Acquisition Agreement, we, through Scienjoy Inc., acquired 100% of the equity interest in Sciscape International
Limited which holds the platform BeeLive International and, through Zhihui Qiyuan (the VIE entity), acquired 100% of the equity interest
in Tianjin Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required
to pay (i) a cash consideration of RMB50.0 million and (ii) RMB250.0 million in Class A ordinary shares (approximately 5.4 million Class
A ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions and
requirements over the following three years. On August 21, 2020, all target shares were transferred to the parties designated in BeeLive
Acquisition Agreement. On September 10, 2020, we paid a cash consideration of RMB50.0 million to Tianjin Guangju Dingsheng Technology
Co., Ltd. and issued 3,786,719 Class A Ordinary Shares to Cosmic Soar Limited. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently
changed its name to Sixiang Mifeng (Tianjin) Technology Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited.
BeeLive is a global live streaming platform that initially launched in China in November 2016. During the second half of 2019, BeeLive
began expanding into international markets. To date, BeeLive International offers Arabic language live streaming product in the Middle
East and Thai language live streaming product in Southeast Asia.
On
December 29, 2021, Beijing local time, SHC entered into an Equity Acquisition Framework Agreement (the "Framework Agreement")
with Golden Shield Enterprises Limited ("Golden Shield"), Beijing Weiliantong Technology Co., Ltd. ("Weiliantong",
together with Golden Shield, the "Target Companies", and each a "Target Company"), Tianjin Yieryi Technology
Co., Ltd. ("Yieryi"), Wolter Global Investment Limited ("Wolter Global", together with Yieryi, the "Sellers",
and each a "Seller") and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) ("Weilaijin"),
which is one of the shareholders of Yieryi. Pursuant to the Framework Agreement, SHC, or its affiliates designated by SHC, will acquire
all of the outstanding equity interests of (i) Weiliantong from Yieryi and (ii) Golden Shield from Wolter Global (the "Acquisitions").
Yieryi and Wolter Global are under common control.
The
transactions contemplated under the Framework Agreement have closed on January 1, 2022 (the "Closing"). Upon the closing
of transactions contemplated in the Framework Agreement, SHC acquired 100% of the issued and outstanding securities of Weiliantong and
Golden Shield for an aggregate consideration of RMB280 million (approximately US$43.8 million), including RMB100 million (approximately
US$15.6 million) in cash and RMB180 million (approximately US$28.2 million) in our Class A ordinary shares. The cash consideration includes
RMB13.8 million (approximately US$2.2 million) cash to Yieryi and repayment of (i) the outstanding loans of Yieryi in an aggregate amount
of RMB77.4 million (approximately US$12.1 million) and (ii) a third-party loan incurred by Weiliantong in an amount of RMB8.8 million
(approximately US$1.4 million). The shares consideration consists of RMB20.8 million (approximately US$3.3 million) in our Class A ordinary
shares to be issued to Weilaijin (the "Weilaijin Share Consideration"), a shareholder of Yieryi, and RMB159.2 million (approximately
US$24.9 million) in our Class A ordinary shares to be issued to Wolter Global (the "Wolter Global Share Consideration").
Our
ability to improve innovative technologies
The
ability to understand market traffic and pair users with suitable broadcasters and activities is key for user stickiness and monetization
in the mobile SHOW live streaming industry. By using big data analysis to understand individual user behavior and industry trends, we
intend to adjust our platform to better guide users to appropriate broadcasters as well as to analyze traffic on other sites to select
the best methods and targets for user acquisition.
Summary
Consolidated Statements of Income
For the years ended December 31,
2020
2021
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Total revenue
1,222,183
1,669,358
1,953,257
283,196
Cost of revenues
(959,939
)
(1,364,902
)
(1,670,068
)
(242,137
)
Gross profit
262,244
304,456
283,189
41,059
Sales and marketing expenses
(10,121
)
(4,807
)
(2,127
)
(308
)
General and administrative expenses
(33,889
)
(65,233
)
(61,005
)
(8,845
)
Research and development expenses
(31,780
)
(70,039
)
(67,538
)
(9,792
)
(Provision for) recovery of doubtful accounts
8,253
1,592
(2,739
)
(397
)
Income from operations
194,707
165,969
149,780
21,717
Interest income, net
2,960
3,962
2,506
363
Other income (loss), net
(4,702
)
(90
)
11,443
1,659
Foreign exchange gain (loss), net
703
105
(1,493
)
(216
)
Change in fair value of warrant liabilities
3,904
16,421
10,776
1,562
Change in fair value of contingent consideration
(14,068
)
(33,584
)
13,071
1,895
Change in fair value of investment in marketable security
-
25,831
1,760
255
Investment income (loss)
-
(2,998
)
25,449
3,690
Income before income taxes
183,504
175,616
213,292
30,925
Income tax expenses
(7,404
)
(5,604
)
(18,067
)
(2,619
)
Net income
176,100
170,012
195,225
28,306
Less: net income attributable to noncontrolling interest
-
-
1,892
274
Net income attributable to the Company's shareholders
176,100
170,012
193,333
28,032
89
Revenues
Our
revenues consist of live streaming revenue and technical services revenue. We generate technical services revenue from providing technical
development and advisory services, but the technical services revenue is not material. Our revenue is mostly from the sales of virtual
items used in our live streaming business.
Virtual
items are categorized as consumable and time-based items. Consumable items, as virtual gift service, are consumed and used by users upon
purchase, while time-based virtual items, such as privilege titles, could be used for a fixed period of time. Accordingly, revenue is
recognized at the time when the virtual item is delivered and consumed if the virtual item is a consumable item or, in the case of time-based
virtual item, recognized ratably over the period each virtual item is made available to the user, which is usually over one to multiple
months and does not exceed one year. For the years ended December 31, 2020, 2021 and 2022, revenue from consumable virtual items represented
over 97% of the total net revenue.
As
we continue to grow our live streaming business, and enhance our user engagement and expand virtual gifting scenarios to increase users'
willingness to pay, we expect our revenue from the sales of virtual items in our live streaming business to increase.
The
following table sets forth types of our revenue for the periods indicated:
For the years ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Live streaming - consumable virtual items revenue
1,187,431
1,617,056
1,886,179
273,470
Live streaming - time based virtual item revenue
29,596
32,905
27,683
4,014
Technical services
5,156
19,397
39,395
5,712
Total revenue
1,222,183
1,669,358
1,953,257
283,196
As
of December 31, 2022, we operated five brands of live streaming platforms, consisting of: Showself Live Streaming, Lehai Live Streaming,
Haixiu Live Streaming, BeeLive Live Streaming (including BeeLive Chinese version – Mifeng) and Hongle Live Streaming. The following
table sets forth our revenue by platforms for the years indicated:
For the years ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Showself
549,763
595,004
521,155
75,561
Lehai
180,112
242,910
241,851
35,065
Haixiu
321,468
326,661
317,953
46,099
Beelive
165,684
485,386
545,296
79,060
Hongle
-
-
287,607
41,699
Technical services and others
5,156
19,397
39,395
5,712
TOTAL
1,222,183
1,669,358
1,953,257
283,196
The
total number of paying users at Showself Live, Lehai Live, Haixiu Live , Beelive Live and Hongle Live for the years indicated is as following:
For the year ended December 31,
2020
2021
2022
Showself
391,258
329,127
239,691
Lehai
132,477
189,653
158,034
Haixiu
319,403
188,039
133,147
Beelive
61,430
133,821
93,027
Hongle
-
-
78,473
TOTAL
904,568
840,640
702,372
The
ARPPU by Showself Live, Lehai Live, Haixiu Live, Beelive Live and Hongle Live is as following (amounts in RMB):
For the year ended December 31,
2020
2021
2022
2022
I
n RMB and USD
RMB
RMB
RMB
USD
Showself
1,405
1,808
2,174
315
Lehai
1,360
1,281
1,530
222
Haixiu
1,006
1,737
2,388
346
Beelive
2,697
3,627
5,862
850
Hongle
-
-
3,665
531
Overall average
1,345
1,963
2,725
395
90
Among
five brands of live streaming platforms, Showself Live streaming contributed at least 34% of the paying users for the all the periods
indicated. Our ARPPU in each platform may fluctuate from period to period due to the mix of live streaming services purchased by the
paying users. The overall ARPPU for the years ended December 31, 2020, 2021 and 2022 was RMB 1,345, RMB 1,963 and RMB 2,725, respectively.
Cost
of Revenues
Our
cost of revenues primarily consists of (i) revenue sharing fees, including payments to various broadcasters and content providers, (ii)
user acquisition costs, (iii) bandwidth related costs, and (iv) other costs.
The
table below shows the cost of revenues for the periods indicated.
For the year ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Revenue sharing fees
(828,874
)
(1,179,935
)
(1,521,100
)
(220,538
)
User acquisition costs
(87,064
)
(120,196
)
(98,568
)
(14,291
)
Bandwidth related costs
(6,586
)
(9,802
)
(13,281
)
(1,926
)
Others
(37,415
)
(54,969
)
(37,119
)
(5,382
)
TOTAL
(959,939
)
(1,364,902
)
(1,670,068
)
(242,137
)
Revenue
sharing fees and content cost:
Our revenue sharing fees represent our payment to broadcasters based on a percentage of revenue
from sales of virtual items, including virtual gifts and other subscription based privileges. Revenue sharing fees were 68%, 71% and
78% of revenues for the years ended December 31, 2020, 2021 and 2022, respectively. As we need to attract more talented broadcasters
and offer more content to users, we adjusted our revenue sharing policy and provided broadcasters with higher revenue sharing percentage
to attract more talented broadcasters. As a result, the revenue sharing fees increased by 42% in fiscal 2021 compared to fiscal 2020
and increased by 29% in fiscal 2022 compared to fiscal 2021. We expect our sharing fees and content cost for live streaming revenue to
increase in line with the growth of our live streaming operations.
User
acquisition costs:
We acquire users primarily through viral marketing, or word-of-mouth marketing, and online download. We provide
online downloads of our apps via various third-party websites, including online advertising networks, internet portals and mobile application
stores. We pay such third parties a fee for each registered user account acquired through them.
Bandwidth
related cost:
Bandwidth related cost consists of fees that we pay to telecommunication service providers for server hosting,
bandwidth and content delivery-related services such as CDN (content delivery network).
Others:
Other
costs include (i) fees that we pay to third-party payment processing platforms through which our users purchase our virtual currencies,
technology service costs, and content producing costs, (ii) personnel fees directly related to the revenue such as operation employees'
salary and benefits, and (iii) depreciation and amortization expense for servers and other equipment, and intangibles directly related
to operating the platforms. For the years ended December 31, 2020, 2021 and 2022 other cost represented approximately 2% to 3% of related
total revenue.
Operating
Expenses
Our
operating expenses consists of (i) sales and marketing expenses, (ii) research and development expenses, (iii) general and administrative
expenses, and (iv) provision for doubtful accounts.
For the year ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Sales and marketing expenses
(10,121
)
(4,807
)
(2,127
)
(308
)
General and administrative expenses
(33,889
)
(65,233
)
(61,005
)
(8,845
)
Research and development expenses
(31,780
)
(70,039
)
(67,538
)
(9,792
)
Recovery of (Provision for) doubtful accounts
8,253
1,592
(2,739
)
(397
)
Sales
and marketing expenses:
Our sales and marketing expenses mainly consist of (i) salaries and benefits for sales and marketing
employees, and (ii) branding and advertisement expenses, including advertisements, holding promotional events and developing and designing
marketing campaigns. We expect to target sales and marketing expenditures to attract targeted paying users.
General
and administrative expenses
: Our general and administrative expenses primarily consist of (i) salaries and benefits for our general
and administrative staff, (ii) consulting fees, (iii) other expenses primarily including general office expenses, and (iv) office rental
expenses. We expect that general and administrative expenses will increase when we become a public company and incurs additional costs
to comply with its reporting obligations under the U.S. securities laws.
91
Research
and development expenses:
Our research and development expenses primarily consist of (i) salaries and benefits for our research
and development employees, and (ii) other expenses primarily including depreciation related to research use. We expect our research and
development expenses to continue to grow as we continue to invest in innovative technologies to offer users a better experience.
(Provision
for) recovery of doubtful accounts:
We maintain an allowance for doubtful accounts which reflects our best estimate of amounts
that potentially will not be collected. When we determine the allowance for doubtful accounts, we take into consideration various factors
including but not limited to collection history and credit-worthiness of the debtors as well as the age of the individual receivables
account. We expect that the provision for doubtful accounts to decline as we have committed more resources to collection of account receivables.
Results
of Operations
Year
Ended December 31, 2022 Compared to Year Ended December 31, 2021
Revenue:
Total
revenues increased by RMB283.9 million, or 17%, from RMB1,669.4 million for the year ended December 31, 2021 to RMB1,953.3 million for
the year ended December 31, 2022. This increase was driven by more quality content provided through our integrated multiple live streaming
platforms including Hongle platform we acquired in January 2022. For the year ended December 31, 2022, the number of paying user was
702,372, decreased from 840,640 paying user for the year ended December 31, 2021. Our average ARPPU increased by 39%, from RMB1,963 for
the year ended December 31, 2021 to RMB 2,725 for the for the year ended December 31, 2022.
Cost
of revenues:
Our cost of revenues increased by 22%, from RMB1,364.9 million for the year ended December 31, 2021 to RMB1,670.1
million for the year ended December 31, 2022. The increase was primarily attributable to a 29%, or RMB341.2 million, year-over-year increase
in the Company's revenue sharing fees and content costs. We have to increase sharing fee ratio in the growth and competitive landscape
of China's mobile live streaming market.
Gross
profit:
Our gross profit for the year ended December 31, 2022 decreased by 7% to RMB283.2 million from RMB304.5 million for
the year ended December 31, 2021. Gross margin for the years ended December 31, 2022 and 2021 was 14% and 18%. As we continued to increase
the revenue sharing fee ratio, it decreased the gross margin in short run but will attract more high-quality broadcasters and enhance
the quality of our content offerings.
Total
operating expenses:
Total operating expenses for the year ended December 31, 2022 decreased by 4% to RMB133.4 million from RMB138.5
million for the year ended December 31, 2021.
●
Sales and
    marketing expenses
:
Our sales and marketing expenses decreased by 56%, from RMB4.8 million for the year ended December
    31, 2021 to RMB2.1 million for the year ended December 31, 2022. This decrease was mainly due to fewer promotional activities.
●
General
    and administrative expenses
:
Our general and administrative expenses decreased by 6%, from RMB65.2 million for the
    year ended December 31, 2021 to RMB61.0 million for the year ended December 31, 2022. The decrease was primarily due to a decrease
    of RMB9.5 million in share base compensations, partially offset by more consulting and professional fees
due
    to the expansion of the Company
and amortization of intangible asset.
●
Research
    and development expense
s
:
Our research and development expenses decreased from RMB70.0 million for the year ended
    December 31, 2021 to RMB67.5 million for the year ended December 31, 2022 due to a decrease of RMB13.9 million in share base compensations,
    partially offset by
higher employee salary and welfare
as a result of increased R&D
    headcounts.
●
Recovery
    of (provision for) doubtful accounts:
Our provision for doubtful accounts for the year ended December 31 2022 was RMB2.7
    million as compared to a recovery of doubtful accounts of RMB1.6 million for the year ended December 30, 2021, due to slowly collection.
Change
in fair value of contingent consideration:
The Company's reverse recapitalization with Wealthbridge Acquisition Limited
("Wealthbridge") on May 7, 2020, acquisition of BeeLive on August 10, 2020 and acquisition of Hongle on January 1, 2022,
which involved payments of future contingent consideration upon the achievement of certain financial performance targets and specific
market price levels. Earn out liabilities are recorded for the estimated fair value of the contingent consideration on the merger date.
The fair value of the contingent consideration is re-measured at each reporting period, and the change in fair value is recognized as
either income or expense. For the year ended December 31, 2022, the change in fair value of contingent consideration was RMB13.1 million
as compared to RMB33.6 million for the year ended December 31, 2021.
92
Change
in fair value of warrant liabilities:
The Company's warrants assumed from SPAC acquisition that have complex terms, such
as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash
upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative that are recorded
as a liability at fair value. The warrant derivative liability is adjusted to its fair value at the end of each reporting period, with
the change being recorded as other expense or gain. For the year ended December 31, 2022, the change in fair value of warrant liabilities
was RMB10.8 million as compared to RMB16.4 million for the year ended December 31, 2021.
Change
in fair value of investment in marketable security:
In January 2021, the Company, through its wholly owned subsidiary, Scienjoy Inc.,
purchased from Cross Wealth Investment Holding Limited, an entity related to two directors of the Company, 606,061 ordinary shares of
Goldenbridge Acquisition Limited ("Goldenbridge") for an aggregated consideration of US$2 million. Goldenbridge was formed
as a special purpose acquisition company. The investment was classified as investment in marketable security, which is adjusted to its
fair value at the end of each reporting period, with the change being recorded as other expense or gain. Change in fair value of investment
in marketable security for the year ended December 31, 2022 was RMB1.8 million as compared to RMB25.8 million for the year ended December
31, 2021.
Investment
income (loss):
On October 9, 2021, the Company signed an investment agreement to invest up to RMB150,000 into Qingdao Sixiang Zhuohong
Private Equity LP ("Qingdao LP"), which further invests in broadcaster, IT, Big Data, Artificial Intelligence and logistic
industry. The Qingdao LLP is managed by two unrelated general partners (GPs). The Company, as a Limited partner, neither participate
in the daily operation of Qingdao LP, nor has the exclusive rights to control the partnership meeting and investment decisions. As a
result, the Company considers it has significant influence on this investment based on its voting power. For the year ended December
31, 2022, the Company recorded shares of income of RMB25.4 million as compared to shares of loss of RMB3.0 million for the year ended
December 31, 2021.
Net
income:
As a result of the foregoing, net income increased by 15%, from RMB170.0 million for the year ended December 31, 2021
to RMB195.2 million for the year ended December 31, 2022
Year
Ended December 31, 2021 Compared to Year Ended December 31, 2020
Revenue:
Total
revenues increased by RMB447.2 million, or 37%, from RMB1,222.2 million for the year ended December 31, 2020 to RMB1,669.4 million for
the year ended December 31, 2021. This increase was driven by more quality content are provided through our integrated multiple live
streaming platforms including Beelive platforms we acquired in September 2020. For the year ended December 31, 2021, the number of paying
user was 840,640, decreased slightly by 7% from 904,568 paying user for the year ended December 31, 2020. Our average ARPPU increased
by 46%, from RMB 1,345 for the year ended December 31, 2020 to RMB 1,963 for the for the year ended December 31, 2021.
Cost
of revenues:
Our cost of revenues increased by 42%, from RMB959.9 million for the year ended December 31, 2020 to RMB1,364.9
million for the year ended December 31, 2021. The increase was primarily attributable to a 42%, or RMB351.1 million, year-over-year increase
in the Company's revenue sharing fees and content costs, which was consistent with the 50% year-over-year increase in active broadcasters
as well as the growth of the Company's overall live streaming operations for the year ended December 31, 2021. In addition, the
Company incurred share based compensation of RMB6.2 million for the year ended December 31, 2021 and no such expense incurred for the
year ended December 31, 2020.
Gross
profit:
Our gross profit for the year ended December 31, 2021 increased by 16% to RMB304.5 million from RMB262.2 million for
the year ended December 31, 2020. Gross margin for the years ended December 31, 2021 and 2020 was 18% and 21%. As we continued to increase
the revenue sharing fee, it decreased the gross margin in short run but will attract more broadcasters and enhance the quality of our
content offerings.
Total
operating expenses:
Total operating expenses for the year ended December 31, 2021 increased by 105% to RMB138.5 million from
RMB67.5 million for the year ended December 31, 2020.
●
Sales and marketing expenses
:
Our
    sales and marketing expenses decreased by 53%, from RMB10.1 million for the year ended December 31, 2020 to RMB4.8 million for the
    year ended December 31, 2021. This decrease was mainly due to the additional promotional activities that we executed in fiscal 2020
    following an uptick in online user traffic as more online users spent an increased amount of time at home watching our live streaming
    content during the COVID-19 outbreak.
●
General and administrative expenses
:
Our
    general and administrative expenses increased by 92%, from RMB33.9 million for the year ended December 31, 2020 to RMB65.2 million
    for the year ended December 31, 2021. The increase was primarily because we had a share based compensation of RMB12.0 million and
    higher employee salary and welfare and amortization of intangible assets as compared to fiscal year 2020.
93
●
Research and development expense
s
:
Our
    research and development expenses increased from RMB31.8 million in 2020 to RMB70.0 million in 2021 due to increased R&D headcounts
    and the Company had share based compensation of RMB13.9 million for the year ended December 31, 2021.
●
Recovery of doubtful accounts:
Our
    recovery of doubtful accounts for the year ended December 31 2021 was RMB1.6 million as compared to a recovery of doubtful accounts
    of RMB8.3 million for the year ended December 30, 2020.
Change
in fair value of contingent consideration:
The Company's reverse recapitalization with Wealthbridge Acquisition Limited
("Wealthbridge") on May 7, 2020 and acquisition of BeeLive on August 10, 2020, involved payments of future contingent consideration
upon the achievement of certain financial performance targets and specific market price levels. Earn out liabilities are recorded for
the estimated fair value of the contingent consideration on the merger date. The fair value of the contingent consideration is re-measured
at each reporting period, and the change in fair value is recognized as either income or expense. For the year ended December 31, 2021,
the change in fair value of contingent consideration increased by 139% to RMB33.6 million from RMB14.1 million for the year ended December
31, 2020.
Change
in fair value of warrant liabilities:
The Company's warrants assumed from SPAC acquisition that have complex terms, such
as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash
upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative that are recorded
as a liability at fair value. The warrant derivative liability is adjusted to its fair value at the end of each reporting period, with
the change being recorded as other expense or gain. For the year ended December 31, 2021, the change in fair value of warrant liabilities
increased by 321% to RMB16.4 million from RMB3.9 million for the year ended December 31, 2020.
Change
in fair value of investment:
Change in fair value of investment for the year ended December 31, 2021 amount to RMB22.8 million.
In January 2021, the Company, through its wholly owned subsidiary, Scienjoy Inc., purchased from Cross Wealth Investment Holding Limited,
an entity related to two directors of the Company, 606,061 ordinary shares of Goldenbridge Acquisition Limited ("Goldenbridge")
for an aggregated consideration of US$2 million. Goldenbridge was formed as a special purpose acquisition company. The investment was
classified as investment in marketable security, which is adjusted to its fair value at the end of each reporting period, with the change
being recorded as other expense or gain.
Net
income:
As a result of the foregoing, net income decreased by 3%, from RMB176.1 million for the year ended December 31, 2020
to RMB 170.0 million for the year ended December 31, 2021.
Recent
Accounting Pronouncements
In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset
and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer
than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all
cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will
be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of
the principal portion of the lease liability will be classified as a financing activity while the interest component will be included
in the operating section of the statement of cash flows. ASU 2016-02 is effective for interim and annual periods beginning after December
15, 2018 and requires a modified retrospective approach to adoption. Early adoption is permitted. In September 2017, the FASB issued
ASU No. 2017-13, which to clarify effective dates that public business entities and other entities were required to adopt ASC Topic 842
for annual reporting. A public business entity that otherwise would not meet the definition of a public business entity except for a
requirement to include or the inclusion of its financial statements or financial information in another entity's filing with the
SEC adopting ASC Topic 842 for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual
reporting periods beginning after December 15, 2020. ASU No. 2017-13 also amended that all components of a leveraged lease be recalculated
from inception of the lease based on the revised after tax cash flows arising from the change in the tax law, including revised tax rates.
The difference between the amounts originally recorded and the recalculated amounts must be included in income of the year in which the
tax law is enacted. In November 2019, the FASB issued ASU No. 2019-10, by which to defer the effective date for all other entities by
an additional year. As an emerging growth company, the Company has not early adopted this update and it will become effective on January
1, 2021. In June 2020, the FASB issued ASU No. 2020-05, "Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842)
Effective Dates for Certain Entities" ("ASU 2020-05") in response to the ongoing impacts to businesses in response
to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides a limited deferral of the effective dates for implementing previously issued
ASU 606 and ASU 842 to give some relief to businesses and the difficulties they are facing during the pandemic. ASU 2020-05 affects entities
in the "all other" category and public Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02,
Leases (Topic 842). Entities in the "all other" category may defer to fiscal years beginning after December 15, 2021, and
interim periods within fiscal years beginning after December 15, 2022. The Company adopted ASU 2016-02, Leases (Topic 842) on January
1, 2022.
I
n
June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments," which requires the Company to measure and recognize expected credit losses for financial assets held
and not accounted for at fair value through net income. In November 2018, April 2019 and May 2019, the FASB issued ASU No. 2018-19, "Codification
Improvements to Topic 326, Financial Instruments — Credit Losses," "ASU No. 2019-04, Codification Improvements to Topic
326, Financial Instruments — Credit Losses," "Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,"
and "ASU No. 2019-05, Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief," which provided
additional implementation guidance on the previously issued ASU. The ASU is effective for fiscal years beginning after Dec. 15, 2019 for
public business entities that meet the definition of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC. All other
entities, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2022. The adoption of this guidance will not have
a material impact on the Company's consolidated financial statements.
94
In
October 2018, the FASB issued ASU No. 2018-17 ("ASU 2018-17"), Consolidation (Topic 810): Targeted Improvements to Related
Party Guidance for Variable Interest Entities. The updated guidance requires entities to consider indirect interests held through related
parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining
whether a decision-making fee is a variable interest. The amendments in this update are effective for non-public business entities for
fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, with early
adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the
beginning of the earliest period presented. The adoption of this guidance did not have a material impact on the Company's consolidated
financial statements.
In
December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, to simplify the
accounting for income taxes. The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the
methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.
It also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting
for transactions that result in a step-up in the tax basis of goodwill. This ASU became effective for the Company's annual and
interim periods starting from January 1, 2021, and early adoption is permitted. The adoption of this guidance did not have a material
impact on the Company's consolidated financial statements.
In
January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures
(Topic 323), and Derivatives and Hedging (Topic 815) ("ASU 2020-01"), which is intended to clarify the interaction of the
accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and
the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company
beginning January 1, 2021. The adoption of this guidance did not have a material impact on the Company's consolidated financial
statements.
In
August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
– Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06"). ASU 2020-06 simplifies the guidance for
certain financial instruments with characteristics of both debt and equity, including convertible instruments and contracts on an entity's
own equity, by reducing the number of accounting models for convertible instruments. It also amends guidance in ASC Topic 260, Earnings
Per Share, relating to the computation of earnings per share for convertible instruments and contracts on an entity's own equity.
ASU 2020-06 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2021, with early adoption
permitted for fiscal years that begin after December 15, 2020. The adoption of this guidance did not have a material impact on the Company's
consolidated financial statements.
In
October 2021, the FASB issued ASU No. 2021-08, "'Business Combinations (Topic 805): Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers" ("ASU 2021-08"). This ASU requires entities to apply Topic 606 to recognize
and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business
combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business
combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company
beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company
does not expect the adoption of ASU 2021-04 will have a material effect on the consolidated financial statements.
Except
for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated
financial position, statements of operations and cash flows.
B.
Liquidity
and Capital Resources
Cash
Flows and Working Capital
The
Company sources of liquidity are primarily from the cash earned from its operating activities and proceeds from financing activities.
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and
cash equivalents. The Company's cash and cash equivalents consist of cash on hand and demand deposits placed with banks or other
financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. Cash and
cash equivalents also consist of funds earned from the operating revenues which were held at the third party platform fund accounts which
are unrestricted as to immediate use or withdraw.
95
As
of December 31, 2021 and 2022, RMB238,792 and RMB172,514, respectively, were deposited with major financial institutions located in the
PRC. Management believes that these financial institutions are of high credit quality and continually monitor the credit worthiness of
these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors'
interests. The Company has no short term investments as of December 31, 2021 and 2022.
A
majority of the Company's expense transactions are denominated in RMB and a significant portion of assets and liabilities of the
Company and its subsidiaries (including the VIEs) are denominated in RMB. RMB is not freely convertible into foreign currencies. In the
PRC certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange
rates set by the PBOC. Remittances in currencies other than RMB by the Companies in China must be processed through the PBOC or other
PRC foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance.
The
Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities
and funds raised from financing activities. The Company believes that its current cash and cash equivalents, together with its cash generated
from operating activities and financing activities, will be sufficient to meet its present anticipated working capital requirements and
capital expenditures for at least the next 12 months. However, the Company may decide to enhance its liquidity position or increase its
cash reserve for future investments or operations through additional capital and finance funding. Issuance of additional equity securities,
including convertible debt securities, would dilute the Company earnings per share. The incurrence of debt would divert cash for working
capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict the
Company's operations and its ability to pay dividends to its shareholders.
As
a holding company with no material operations of its own, the Company conducts its operations primarily through its PRC subsidiaries
and its variable interest entity (VIE) and the VIE's subsidiaries. The Company is permitted under PRC laws and regulations to provide
funding to its PRC subsidiaries in China through capital contributions or loans, subject to the approval of government authorities and
limits on the amount of capital contributions and loans.
The
following table presents the summary of the Company's cash flow data.
For the year ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB
RMB
RMB
RMB
USD
Net cash provided by operating activities
155,441
116,301
57,551
8,346
Net cash used in investing activities
(40,934
)
(115,124
)
(113,246
)
(16,420
)
Net cash provided by (used in) financing activities
(23,332
)
15,284
(11,482
)
(1,665
)
Effect of foreign exchange rate changes on cash
(3,758
)
(282
)
1,522
220
Net increase in cash and cash equivalents
87,417
16,179
(65,655
)
(9,519
)
Cash and cash equivalents at beginning of the year
137,351
224,768
240,947
34,934
Cash and cash equivalents at end of the year
224,768
240,947
175,292
25,415
Operating
Activities
Net
cash provided by or used in operating activities consisted primarily of the Company's net income/loss adjusted by non-cash adjustments,
such as provision for doubtful accounts, and adjusted by changes in operating assets and liabilities, such as accounts receivable.
Net
cash provided by operating activities was RMB57.6 million for the year ended December 31, 2022. The difference between the net cash provided
by operating activities and net income of RMB195.2 million was primarily attributable to non-cash adjustment of RMB23.3 million, an increase
in accounts payable of RMB25.5 million due to slower payment to suppliers and an increase in deferred revenue of RMB22.4 million, partially
offset by a decrease of RMB22.0 million in prepaid expense and other current assets and an increase of RMB14.1 million in accrued expenses
and other payables.
Net
cash provided by operating activities was RMB116.3 million for the year ended December 31, 2021. The difference between the net cash
provided by operating activities and net income of RMB170.0 million was primarily attributable to non-cash adjustment of RMB 29.7 million,
an increase in account payable of RMB18.7 million due to slower payment to suppliers in 2021 and a decrease of RMB23.5 million in accounts
receivable, partially offset by an increase in prepaid expenses and other current assets of RMB151.6 million, mainly due to advance to
Beijing Weiliantong Technology Co., Ltd of RMB86.2 million and investment disposal receivable RMB30.0 million in in Tianjing Yieryi Technology
Co., Ltd.
Net
cash provided by operating activities was RMB155.4 million for the year ended December 31, 2020. The difference between the net cash
provided by operating activities and net income of RMB176.1 million was primarily attributable to non-cash adjustment related to change
in fair value of contingent liability of RMB14.1 million, an increase in account payable of RMB28.4 million due to slower payment to
suppliers in 2020 and an increase of RMB8.0 million in accrued salary and employee benefits, partially offset by an increase accounts
receivable of RMB70.5 million, mainly due to increase of revenue.
96
Investing
Activities
Net
cash used in investing activities was primarily due to (a) purchases of property and equipment such as electronic equipment, and intangible
assets such as trademark, software copyrights, and patents; (b) payment for long term investment.
Net
cash used in investing activities amounted to RMB113.2 million for the year ended December 31, 2022, primarily due to RMB107.0 million
paid for long term investment and RMB4.1 million net cash paid for acquisition of Weiliantong and acquisition of Chuangda Huizhi.
Net
cash used in investing activities amounted to RMB115.1million for the year ended December 31, 2021, primarily due to RMB113.7 million
paid for long term investment and RMB1.4 million purchase of equipment.
Net
cash used in investing activities amounted to RMB40.9 million for the year ended December 31, 2020, primarily due to RMB50 million paid
for Beelive acquisition and RMB1.1 million purchase of equipment, offset by the cash acquired from acquisition of RMB10.2 million.
Financing
Activities
Net
cash used in financing activities amounted to RMB11.5 million for the year ended December 31, 2021, primarily due to net proceeds of
RMB 16.5 million paid for treasure stocks, offset by RMB5.0 million proceed from bank loan.
Net
cash provided by financing activities amounted to RMB15.3 million for the year ended December 31, 2021, primarily due to net proceeds
of RMB 15.3 million from private placement and exercised of warrants and Unit Purchase Option.
Net
cash used in financing activities amounted to RMB23.3 million for the year ended December 31, 2020, primarily due to repayment RMB 57.4
million for loan payables, RMB14.0 million paid to related parties and RMB6.9 million paid for listing costs, offset by cash of RMB32.7
million acquired in the reverse recapitalization and RMB 22.3 million loan proceeds from related parties.
Capital
Expenditures.
For
the years ended December 31, 2020, 2021 and 2022, the Company's capital expenditure amounted to RMB1.1 million, RMB1.4 million
and RMB2.2 million, respectively. The Company intends to fund its future capital expenditures with the existing cash balance and other
financing alternatives. The Company will continue to make capital expenditures to support the growth of its business.
C.
Research and Development,
    Patents and Licenses, etc.
See
"Item 4. Information on the Company—B. Business Overview—Our Technology" and "Item 4. Information on the
Company—B. Business Overview—Intellectual Property."
D.
Trend Information
Other
than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that
are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or
capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results
or financial condition.
E.
Critical Accounting
    Estimates
We
prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually
evaluates these estimates and assumptions based on the most recently available information, our own historical experience and various
other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the
financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting
policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.
The
following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our combined and consolidated
financial statements and accompanying notes and other disclosures included in this annual report.
97
Business
combinations
The
Company accounts for all business combinations under the purchase method of accounting in accordance with ASC 805, Business Combinations
("ASC 805"). The purchase method of accounting requires that the consideration transferred to be allocated to net assets
including separately identifiable assets and liabilities the Company acquired, based on their estimated fair value. The consideration
transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities
incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition
date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities
acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling
interests. The excess of (i) the total of the cost of the acquisition, fair value of the non-controlling interests and acquisition date
fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree
is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference
is recognized directly in earnings. The determination and allocation of fair values to the identifiable net assets acquired and liabilities
assumed is based on various assumptions and valuation methodologies requiring considerable judgment from management. Although the Company
believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition,
actual results may differ from forecasted amounts and the differences could be material.
On
January 10, 2020, the Company entered into a purchase agreement with the shareholder of LXZ to acquire 100% equity interest in LXZ with
a cash consideration of RMB 200 (US$31). The operating results of LXZ for the years ended December 31, 2019 and 2020 were not significant
to the Company. The operating results of LXZ have been included in the consolidated financial statements since the acquisition. The Company's
acquisition of LXZ was accounted for as business combination in accordance with ASC 805. Acquisition-related costs incurred for the acquisition
are not material.
On
August 10, 2020, the Company signed an Equity Acquisition Framework Agreement (the "BeeLive Acquisition Agreement") to acquire
100% equity interest in Sciscape International Limited which holds the platform BeeLive International and 100% equity interest in Tianjin
Guangju Dingfei Technology Co., Ltd. which holds BeeLive Chinese (MiFeng). Pursuant to the Agreement, the Company is required to pay
(i) a cash consideration of RMB50.0 million (US$7.4 million) and (ii) RMB250.0 million in ordinary shares (approximately 5.4 million
ordinary shares) to be issued by the Company. 30% of share consideration payments are subject to certain performance conditions (i.e.
earn-out provisions as discussed below) and requirements over the following three years (earn-out arrangement). The fair value of purchase
price including the consideration for earn-out arrangement was RMB264,755, based on a valuation performed by an independent valuation
firm engaged by the Company. Tianjin Guangju Dingfei Technology Co., Ltd. subsequently changed its name to Sixiang Mifeng (Tianjin) Technology
Co. and Sciscape International Limited changed its name to Scienjoy BeeLive Limited (together "BeeLive"). For the year ended
December 31, 2020 and 2021, the first and second portion of earn-out shares of 540,960 and 540,960 achieved the performance requirement.
Use
of estimates
The
preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment
include, but are not limited to revenue recognition, estimating the useful lives of long-lived assets and intangible assets, valuation
assumptions in performing asset impairment tests of long-lived assets, fair value of warrants liabilities and contingent liability, allowance
for doubtful accounts, and valuation of deferred taxes and deferred tax assets. Actual results could differ from those estimates, and
as such, differences may be material to the consolidated financial statements.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are stated at the historical carrying amount net of allowance for doubtful accounts. Accounts are considered overdue after
180 days.
The
Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected.
The Company determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical
collection experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the
Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account
is uncollectible. The facts and circumstances for each account may require the Company to use substantial judgment in assessing its collectability.
Account
balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is
not probable.
98
Revenue
Recognition
On
January 1, 2019, the Company adopted ASC 606, "Revenue from Contracts with Customers" using the modified retrospective method
applied to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019
are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's
historic accounting under Topic 605. Based on the Company's assessment, the adoption of ASC 606 did not result in any adjustment
on the Company's consolidated financial statements, and there were no material differences between the Company's adoption
of ASC 606 and its historic accounting under ASC 605.
Revenues
are recognized when control of the promised virtual items or services is transferred to the Company's customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those virtual items or services. Revenue is recorded,
net of sales related taxes and surcharges. The Company derives their revenue from live streaming service and technical service.
Live
streaming
The
Company is principally engaged in operating its own live streaming platforms, which enable broadcasters and viewers to interact with
each other during live streaming. The Company is responsible for providing a technological infrastructure to enable the broadcasters,
online users and viewers to interact through live streaming platforms. All the platforms can be accessed for free. The Company mainly
derives the revenue from sales of virtual items in the platforms. The Company has a recharge system for users to purchase the Company's
virtual currency then purchase virtual items for use. Users can recharge via various online third-party payment platforms, including
WeChat Pay, AliPay and other payment platforms. Virtual currency is non-refundable and often consumed soon after it is purchased.
The
Company designs, creates and offers various virtual items for sales to users with pre-determined stand-alone selling price. Virtual items
are categorized as consumable and time-based items. Consumable items are consumed upon purchase and use while time-based items could
be used for a fixed period of time. Users can purchase and present consumable items to broadcasters to show support for their favorite
broadcasters, or purchase time-based virtual items for one or multiple months for a monthly fee, which provide users with recognized
status, such as priority speaking rights or special symbols over a period of time.
The
Company shares a portion of the sales proceeds of virtual items ("revenue sharing fee") with broadcasters and talent agencies
in accordance with their revenue sharing arrangements. Broadcasters, who do not have revenue sharing arrangements with the Company, are
not entitled to any revenue sharing fee. The Company also utilizes third-party payment collection channels, which charges the payment
handling cost for users to purchase the virtual currency directly from it. The payment handling costs are recorded in cost of sales.
The
Company evaluates and determines that it is the principal and views users to be its customers, because the Company controls the virtual
items before they are transferred to users. Its control is evidenced by the Company's sole ability to monetize the virtual items
before they are transferred to users, and is further supported by the Company being primarily responsible to the users for the delivery
of the virtual items as well as having full discretion in establishing pricing for the virtual items. Accordingly, the Company reports
live streaming revenues on a gross basis with the amounts billed to users recorded as revenues and revenue sharing fee paid to broadcasters
and related agencies recorded as cost of revenues.
Sales
proceeds are initially recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. The Company
has determined that each individual virtual item represents a distinct performance obligation. Accordingly, live streaming revenue is
recognized immediately when the consumable virtual item is used, or in the case of time-based virtual items, revenue is recognized over
the fixed period on a straight line basis. The Company does not have further obligations to the user after the virtual items are consumed.
The Company's live streaming virtual items are generally sold without right of return and the Company does not provide any other
credit and incentive to its users. Unconsumed virtual currency is recorded as deferred revenue.
The
Company also cooperates with independent third-party distributors to sell virtual currency through annual distribution agreements with
these distributors. Third-party distributors purchase virtual currency from the Company with no refund provision according to the annual
distribution agreements, and they are responsible for selling the virtual currency to end users. They may engage their own sales representatives,
which are referred to as "sales agents" to directly sell to individual end users. The Company has no control over such "sales
agents". The Company has discretion to determine the price of the virtual currency sold to its third-party distributors, but has
no discretion as to the price at which virtual currency is sold by its third-party distributors to the sales agents.
Technical
Services
The
Company generated technical revenues from providing technical development and advisory, which accounts for only less than 1% of revenue.
As the amount was immaterial, and short-term in nature which is usually less than six months, the Company recognizes revenue when service
were rendered and accepted by customers.
99
Practical
expedients and exemptions
The
Company's contracts have an original duration of one year or less. Accordingly, the Company does not disclose the value of unsatisfied
performance obligations.
Revenue
by types and platforms
The
following table sets forth types of our revenue for the periods indicated:
For the years ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Live streaming - consumable virtual items revenue
1,187,431
1,617,056
1,886,179
273,470
Live streaming - time based virtual item revenue
29,596
32,905
27,683
4,014
Technical services and others
5,156
19,397
39,395
5,712
Total revenue
1,222,183
1,669,358
1,953,257
283,196
As
of December 31, 2022, we operated five brands of live streaming platforms, consisting of: Showself Live Streaming, Lehai Live Streaming,
Haixiu Live Streaming, BeeLive Live Streaming (including BeeLive Chinese version – Mifeng) and Hongle Live Streaming. The following
table sets forth our revenue by platforms for the periods indicated:
For the years ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Showself
549,763
595,004
521,155
75,561
Lehai
180,112
242,910
241,851
35,065
Haixiu
321,468
326,661
317,953
46,099
Beelive
165,684
485,386
545,296
79,060
Hongle
-
-
287,607
41,699
Technical services and others
5,156
19,397
39,395
5,712
TOTAL
1,222,183
1,669,358
1,953,257
283,196
Contract
balances
Contract
balances include accounts receivable and deferred revenue. Accounts receivable primarily represent cash due from distributors and are
recorded when the right to consideration is unconditional. The allowance for doubtful accounts reflects the best estimate of probable
losses inherent to the account receivable balance. Deferred revenue primarily includes unconsumed virtual currency and unamortized revenue
from time-based virtual items in the Company's platforms, where there is still an obligation to be provided by the Company, which
will be recognized as revenue when all of the revenue recognition criteria are met. Due to the generally short-term duration of the relevant
contracts, all performance obligations are satisfied within one year.
Intangible
assets
Intangible
assets are carried at cost less accumulated amortization and any impairment. License for Beelive platform is determined to have an infinite
useful life and is not subject to amortization and tested for impairment at least annually. Intangible assets with a finite useful life
are amortized using the straight-line method over the estimated economic life of the intangible assets as follows:
Trademark
10 years
Patent
10 years
Copyright
10 years
Software
3 to 10 years
Licenses acquired
3 years to infinite life
Impairment
of long-lived assets
The
Company evaluates its long-lived assets or asset group, including property and equipment and intangible assets including license that
has an infinite useful life, for impairment whenever events or changes in circumstances (such as a significant adverse change to market
conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets
may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets
to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the
expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based
on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash
flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. No impairment
of long-lived assets was recognized for the years ended December 31 2020, 2021 and 2022.
100
Goodwill
Goodwill
represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination.
Goodwill is not subject to amortization but is monitored annually for impairment or more frequently if there are indicators of impairment.
Management considers the following potential indicators of impairment: significant underperformance relative to historical or projected
future operating results, significant changes in the Company's use of acquired assets or the strategy of the Company's overall
business, significant negative industry or economic trends and a significant decline in the Company's stock price for a sustained
period. The Company performs its impairment test on annual basis. Currently, the Company's goodwill is evaluated at the entity
level as it has been determined there is one operating segment comprised of one reporting unit. When assessing goodwill for
impairment the Company first performs a qualitative assessment to determine whether it is necessary to perform a quantitative analysis.
If the Company determines it is unlikely that the reporting unit fair value is less than its carrying value then no quantitative assessment
is performed. If the Company cannot determine that it is likely that the reporting unit fair value is more than its carrying value, then
the Company performs a quantitative assessment. Based on the qualitative assessment performed for the year ended December 31, 2022, the
Company determined it was unlikely that its reporting unit fair value was less than its carrying value and no quantitative assessment
was required.
Fair
value of financial instruments
ASC
825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize
the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as
follows:
●
Level 1 — inputs to the valuation
    methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●
Level 2 — inputs to the valuation
    methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar
    assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated
    by observable market data.
●
Level 3 — inputs to the valuation
    methodology are unobservable.
The
carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, other receivables included
in prepaid expenses and other current assets, accounts payables, balances with related parties and other current liabilities, approximate
their fair values because of the short-term maturity of these instruments.
Assets
and Liabilities Measured or Disclosed at Fair Value on a recurring basis
The
following tables represent the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring
basis as of December 31, 2021 and 2022:
As of December 31, 2021
Fair Value Measurement at the Reporting Date using
Quoted price
in active
markets for
identical
assets
Level 1
Significant
other
observable
inputs
Level 2
Significant
unobservable
inputs
Level 3
Total
Financial assets:
Investment in marketable equity security
¥
38,789
-
-
¥
38,789
Financial liabilities:
Earn-out liability from BeeLive acquisition
-
-
10,638
10,638
Warrants liability
10,324
10,324
Total
¥
-
¥
-
¥
20,962
¥
20,962
101
As of December 31, 2022
Fair Value Measurement at the Reporting Date using
Quoted price
in active
markets for
identical
assets
Level 1
Significant
other
observable
inputs
Level 2
Significant
unobservable
inputs
Level 3
Total
Financial assets:
Investment in marketable equity security
¥
40,548
¥
40,548
Financial liabilities:
Earn-out liability from BeeLive acquisition
¥
-
¥
-
¥
-
¥
-
Earn-out liability from Weiliantong acquisition
-
-
4,336
4,336
Warrant liability
166
166
Total
¥
-
¥
-
¥
4,502
¥
4,502
Contingent
consideration – earn-out liability
(i)
Earn-out
liability from SPAC transaction
In
connection with SPAC transaction, the previous shareholders of Scienjoy Inc. may be entitled to receive earnout shares as follows: (1)
if Scienjoy Inc.'s net income before tax for the year ended December 31, 2020 is greater than or equal to either US$28,300,000
or RMB 190,000,000, the previous owners of Scienjoy Inc will be entitled to receive 3,000,000 Class A ordinary shares of the Company
("SPAC Earn-out Target 2020"); and (2) if Scienjoy Inc.'s net income before tax for the year ended December 31, 2021
is greater than or equal to either US$35,000,000 or RMB 235,000,000, the previous owners of Scienjoy Inc. will be entitled to receive
3,000,000 Class A ordinary shares of the Company. Notwithstanding the net income before tax achieved by the post-transaction company
for any period, the previous owners of Scienjoy Inc. will receive (i) 3,000,000 earn-out shares if the share price of the Company is
higher than $20.00 for any sixty days in any period of ninety consecutive trading days between May 8, 2021 and May 7, 2022, and (ii)
3,000,000 earnout shares if the share price of the Company is higher than $25.00 for any sixty days in any period of ninety consecutive
trading between May 8, 2022 and May 7, 2023.
Upon
the closing of the SPAC Transaction, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from May 8, 2020 to December 31, 2021 in in earnings. The Company determined the fair value of
the contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in the
fair value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend
rate, to generate individual stock price paths. The major assumptions used in the binomial model are as follows:
May 7,
2020
December 31,
2020
December 31,
2021
Risk-free interest rate
0.14
%
0.10
%
0.38
%
Share price
$
8.92
$
8.66
$
5.68
Probability
20% – 50%
10
%
20%–50%
(ii)
Earn-out
liability from BeeLive acquisition
In
connection with the acquisition of Beelive (Note 4), the previous shareholders of BeeLive may be entitled to receive earnout shares as
follows: (i) if the BeeLive Company's total annual revenue is no less than RMB 336.6 million in Year 2020,the previous shareholder
will be entitled to received additional 540,960 Class A ordinary shares ("Beelive Earn-out Target 2020"); (ii) if the BeeLive
Companies' total annual revenue is no less than RMB 460.6 million in Year 2021 ("Beelive Earn-out Target 2021"), the
previous shareholder will be entitled to received additional 540,960 Class A ordinary shares; and (iii) if the BeeLive Companies'
total annual revenue is no less than RMB 580.9 million in Year 2022 ("Beelive Earn-out Target 2022"), the previous shareholder
will be entitled to received additional 540,960 Class A ordinary shares. If the total annual revenue of BeeLive Company in a particular
performance year does not reach the target revenue as specified above, but is equal to or more than 80% of the target revenue, the previous
shareholder will be entitled to a reduced number of the earn-out shares.
Upon
the closing of the BeeLive acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from the acquisition date to December 31, 2022 in earnings. The Company determined the fair value
of the contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in
the fair value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected
dividend rate, to generate individual stock price paths. The major assumptions used in the binomial model are as follows:
August 10,
2020
December 31,
2020
December 31,
2021
December 31,
2022
Risk-free interest rate
0.12 - 0.14
%
0.11%- 0.13
%
0.38
%
4.73
%
Share price
$
6.2
$
8.66
$
5.68
$
1.97
Probability
20% - 50
%
20% - 50
%
20% - 50 %
20%-50 %
102
(iii)
Earn-out
liability from Weiliantong acquisition
In
connection with the acquisition of Weiliantong (Note 4), the previous shareholders of Weiliantong may be entitled to receive earnout
shares as follows: (i) if the Weiliantong Company's total annual revenue is no less than RMB280,000 in 2022, the previous shareholder
will be entitled to received additional 10% of consideration( Class A ordinary shares) ("Weiliantong Earn-out Target 2022");
(ii) if Weiliantong total annual revenue is no less than RMB 360,000 in Year 2023, the previous shareholder will be entitled to received
additional 10% of consideration (Class A ordinary shares); If the total annual revenue of Weiliantong Company in a particular performance
year does not reach the target revenue as specified above, but is equal to or more than 80% of the target revenue, the previous shareholder
will be entitled to a reduced number of the earn-out shares.
Upon
the closing of the Weiliantong acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out
liability and recorded the changes in fair value in earnings. The Company determined the fair value of the contingent consideration using
binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial
model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual
stock price paths. The major assumptions used are as follows:
January 1,
2022
December 31,
2022
Risk-free interest rate
0.39-0.73
%
4.73
%
Share price
$
5.13
$
1.97
Probability
20% - 50
%
20% - 50
%
The
Company measures contingent consideration – earn-out liability at fair value on a recurring basis as of the dates of acquisition
and December 31, 2021 and 2022. The following table presents the fair value hierarchy for assets and liabilities measured at fair value
on a recurring basis:
As
of December 31, 2021, the earn-out liability related to SPAC Earn-out Target 2021 and Beelive Earn-out Target 2021 were met. As a result,
the Company classified the related portion of earn-out liability in aggregated of RMB128,119 as shares to be issued in the equity
of the Company. As of December 31, 2021, there was 3,540,960 earn-out shares required to be issued and the Company included
it in the calculation of earnings per share, which was fully issued on June 8, 2022.
As
of December 31, 2022, Beelive has achieved 93.87% of the Beelive Earn-out Target 2022 and Weiliantong has achieved 100% of Weiliantong
Earn-out Target 2022. As a result, the Company classified the related portion of earn-out liability in aggregated of RMB13,106 as
shares to be issued in the equity of the Company. As of December 31, 2022, there was 995,118 earn-out shares required to be
issued and the Company included it in the calculation of earnings per share. Upon issuance of this report, a total of 507,804 (540,960
* 93.87%) has been issued to Cosmic Soar, the previous shareholder of Beelieve and a total of 487,314 share has been issue to Wolter
Global, the previous shareholder of Weiliantong.
The
Company did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2020, 2021 and 2022. The
following is a reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring
basis using significant unobservable inputs (Level 3) during the years ended December 31, 2020, 2021 and 2022:
Balance
Balance at January 1, 2020
¥
-
Contingent consideration resulting from SPAC Transaction
266,828
Contingent consideration resulting from BeeLive acquisition
39,755
Fair value change
14,068
Exchange difference
(13,252
)
Reclassification to shares to be issued
(200,100
)
Balance at December 31, 2020
¥
107,299
Fair value change
33,584
Exchange difference
(2,126
)
Reclassification to shares to be issued
(128,119
)
Balance at December 31, 2021
¥
10,638
Contingent consideration resulting from Weiliantong acquisition
19,875
Fair value change
(13,071
)
Reclassification to shares to be issued
(13,106
)
Balance at December 31, 2022
¥
4,336
Less: Contingent consideration – earn-out liability – non-current portion
-
Contingent consideration – earn-out liability –current portion
¥
4,336
The
aggregated contingent considerations for the earn-out liabilities were approximate RMB10.6 million and RMB4.3 million as of December
31, 2021 and 2022, respectively. The balance of contingent consideration for the earn-out liabilities are classified as current liability
due to short term nature.
Warrant
liabilities
The
Company's warrants assumed from SPAC acquisition on May 7,2020, the date of the closing of SPAC Transaction, that have complex
terms, such as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants
for cash upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative as
contemplated in ASC 815-40. The warrant is recorded as derivative liability on the consolidated balance sheet upon the SPAC transaction
and is adjusted to its fair value at the end of each reporting period, with the change being recorded as other expense or gain in accordance
with ASC 820.
103
The
warrant liabilities were measured and recorded on a recurring basis. The Company determined the fair value of the contingent consideration
using binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial
model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual
stock price paths. The major assumptions used in the binomial model are as follows:
May 7,
2020
December 31,
2020
December 31,
2021
December 31,
2022
Risk-free interest rate
0.23
%
0.18
%
0.75
%
4.70
%
Share price
$
8.92
$
8.66
$
5.68
$
1.97
Volatility
37
%
38
%
53
%
68
%
The
following table sets forth the establishment of the Company's Level 3 warrant liabilities, as well as a summary
of the changes in the fair value:
Balance
Balance at January 1, 2020
¥
-
Warrant liabilities resulting from SPAC Transaction
36,121
Fair value change
(3,904
)
Exchange difference
(2,659
)
Balance as of December 31, 2020
¥
29,558
Fair value change
(16,421
)
Exercised
(115
)
Exchange difference
(2,698
)
Balance as of December 31, 2021
¥
10,324
Fair value change
(10,776
)
Exchange difference
618
Balance as of December 31, 2022
¥
166
Income
Taxes
The
Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The Company follows the liability
method in accounting for income taxes in accordance to ASC topic 740 ("ASC 740"), Income Taxes. Under this method, deferred
tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities
using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. A valuation allowance
would be recorded against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion,
or all, of the deferred tax assets will not be realized.
The
guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on recognition of income
tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties
associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required
in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company recognizes interests
and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement
of comprehensive loss. The Company did not recognize any interest and penalties associated with uncertain tax positions as of December
31, 2021 and 2022. As of December 31, 2021 and 2022, the Company did not have any significant unrecognized uncertain tax positions.
ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Executive
    Officers
The
following table sets forth information of our senior management and directors, and their ages as of the date of this report.
Names
Age
Position
Xiaowu He
47
Director, Chief Executive Officer, and Chairman of
    the Board
Bo Wan
47
Director, Chief Operating Officer
Denny Tang
53
Chief Financial Officer
Yongsheng Liu
53
Director, Vice Chairman of the Board
Hucheng Zhou
43
Independent Director
Huifeng Chang
57
Independent Director
Jian Sun
41
Independent Director
Yibing Liu
50
Independent Director
104
Xiaowu
He.
Mr. He has been our Chief Executive Officer, Director and Chairman of the Board since May 2020. He is one of the three
co-founders of Scienjoy Inc. and has served as the chief executive officer of Scienjoy Inc. since October 2011. Mr. He has been mainly
responsible for Scienjoy 's overall business, including business strategies, company operations and financings. Mr. He has also
been the 100% shareholder and director of Enmoli Inc. since December 2018 and the 100% shareholder and director of Heshine Holdings Limited,
which is one of the two shareholders of Lavacano, since January 2019. Prior to founding Scienjoy Inc. in 2011, between 2008 and 2011,
Mr. He served as the East Asia Regional Director of Business Development of Tyco International, a Fortune 500 Company, where he was responsible
for commercial cooperation and development of the entire Sensormatic product line in East Asia. From 2006 to 2007, Mr. He worked at NCR/Teradata
Toronto, Canada and provided technical and customer support for its DCM program. From 2004 to 2006, Mr. He was a manager at M&L Export
and Import Company in Toronto, Canada. Prior to working in Canada, Mr. He worked in Fujian, China, and assumed various positions in UTStarcom,
Shida System Integration Company, and Fujian Posts and Telecommunications. Mr. He received his MBA degree from the University of New
Brunswick. We believe that Mr. He's qualifications to sit on the board include his deep understanding of our business model and
strong leadership in the capacity of an executive and a director, along with his expertise in strategic planning, corporate financing
and business development, and extensive experience in the information technology industry.
Bo
Wan.
Mr. Wan has been our Chief Operating Officer and Director since May 2020. He is one of the three Co-founders of Scienjoy
Inc. and has served as the chief operating officer of Scienjoy Inc. since October 2011. Mr. Wan has been mainly responsible for Scienjoy
's business operation, marketing and human resources. Mr. Wan has also been the 100% shareholder and director of WBY Holdings Limited
since December 2019. Prior to founding Scienjoy Inc., Mr. Wan managed a team of over thirty people in the software department at NCR/Teradata
in Beijing, China, a global leading company in financial products, data warehouse, and IT service from 2006 to 2012. He took the lead
in designing and developing multiple BI products, the company's first cloud-based solution and other programs. From 2001 to 2006,
Mr. Wan assumed various positions including project director, project manager, senior pre-sale/post-sale consultant at NCR in Toronto,
Canada. Mr. Wan also served as Huawei's senior test development engineer in Beijing between 2000 and 2001 and worked as a project
manager and software engineer at China Unicom in Tianjin between 1997 and 2000. Mr. Wan received his MBA degree from Lawrence Technological
University. We believe that Mr. Wan is qualified to sit on the board due to his in-depth knowledge of Scienjoy Inc., outstanding company
management skills, and years of experience in supply chain, data analysis, customer development and human resources in the information
technology, Internet and Mobile Internet industry.
Denny
Tang.
Mr. Tang has been our Chief Financial Officer since May 2020. Mr. Tang has extensive experience working in a multi-cultural
and complex matrix reporting hierarchy and has served as the chief financial officer of Scienjoy Inc. since February 2020. From 2007
to 2017, Mr. Tang served as the Group Finance Director at Ogilvy Beijing, a 4A agency that offers a broad range of marketing communication
service. While at Ogilvy Beijing, Mr. Tang led 4 directors and set up direct procurement function that is first in kind in the PRC advertising
industry. He also assumed board of directorship in more than 20 subsidiaries and was the point of contact of JV partners. From 1999 to
2007, Mr. Tang was the business planning & developing manager (head of finance) at PCCW-NOW TV, where he was in charge of the whole
finance of a pay TV operator. From 1996 to 1999, Mr. Tang worked as the business development manager at New World Infrastructure, where
he participated in due diligence, project finance pre & post acquisition and assisted in IPO listing of China.com, the first PRC
internet company listed in the U.S. From 1992 to 1994, Mr. Tang was a senior associate at KPMG's Beijing office and involved in
advisory and reconstruction projects of pre-listing of A/B shares of PRC state owned enterprise. Mr. Tang graduated from Hong Kong Polytechnic
University with Honors in Accountancy and earned his MBA degree from the Chinese University of Hong Kong while gaining exchange experience
at Columbia Business School. We believe that Mr. Tang is qualified to serve as the Chief Financial Officer because he has extensive experience
in accounting, finance, and business management at leading companies in the media and internet industry.
Yongsheng
Liu.
Mr. Liu was our Chief Executive Officer and Chairman of our Board since our inception through the closing of the Business
Combination and is currently a Director and Vice Chairman of the Board. Throughout the past 20 years, Mr. Liu has assumed various corporate
leadership positions and demonstrated his strong execution ability and in-depth knowledge in private equity and corporate M&A transactions
across a wide range of sectors including aviation, consumer, financial institutions, and technology. Since August 2020, Mr. Liu has been
chief executive officer and chairman of the board of Goldenbridge Acquisition Limited. From March 2017 to April 2018, Mr. Liu served
as Chairman and CEO of Royal China Holdings Limited (HKEx: 01683), during which he spearheaded the company's international growth
strategy focused at acquiring targets in aviation industry and finance sector. From the beginning of 2013 to March 2017, Mr. Liu was
the Chairman of Joy Air General Aviation, Chairman of Cambodia Bayon Airlines, Vice Chairman of Everbright and Joy International Leasing
Company, and President of General Aviation Investment Company (Shanghai). From April 2004 to August 2008, Mr. Liu also served as Chief
Strategy Officer of United Eagle Airlines (subsequently renamed to Chengdu Airlines). From December 1994 to June 2000, Mr. Liu was a
manager of China Southern Airlines responsible for ground staff training. Mr. Liu received his master degree from University of Ottawa
in 2003 and his bachelor's degree from Civil Aviation University of China in 1992.We believe that Mr. Liu is qualified to sit on
our board due to his many years of public company management and director experience, along with his expertise in strategic planning,
corporate financing and business development.
Hucheng
Zhou (Independent Director starting from August 6, 2021).
Mr. Zhou has served as an Independent Director of our Board since August
2021. Mr. Zhou has extensive experience in board governance. Mr. Zhou has served as an independent director of Soling Co Ltd. since December
2019. Mr. Zhou supervises the operation of Soling Co Ltd. on behalf of small and medium-sized shareholders, is responsible for convening
the nomination committee and the strategic committee, and participates in the supervision of Soling Co Ltd.'s strategic remuneration
and audit-related business. Mr. Zhou has also served as the vice president, deputy secretary general, and senior researcher at the Charhar
Institute since April 2018. In addition, Mr. Zhou has served as the vice president of Guangdong Health China Society since March 2021,
the vice president of Southeast and South Asia Branch of Europe-America Alumni Club since January 2020, the vice president of Guangdong
Alumni Association of Nanyang Technological University since November 2018, the executive director of China Association for International
Public Relations since May 2017, and a visiting professor at Visiting Professor of Seoul Communication University in Korea since March
2017. From March 2017 to April 2018, Mr. Zhou served as the executive director and executive vice president of Royal China International
Holdings Limited. From December 2015 to March 2017, Mr. Zhou served as the press spokesperson of LeTV Holding Group. From February 2012
to November 2015, Mr. Zhou served as the deputy director of the Theory and Commentary Department of Nanfang Daily. Mr. Zhou obtained
his Master of Public Administration from Nanyang Technological University in Singapore in 2014 and his Bachelor of Arts degree from Huazhong
University of Science and Technology in Hubei, China in 2004.
105
Jining
Li (Independent Director until August 2021).
Mr. Li has served as a Director of our Board since September 2018 and
since the closing of the Business Combination he has been an Independent Director of our Board. Mr. Li has been a director of Goldenbridge
Acquisition Limited since August 2020. Mr. Li is the Founder and has acted as the Chairman of Star Jet Co., Ltd in Shanghai, China, since
2009. Mr. Li has also been the Chairman of Keen Nice Communications Limited since 2006. Prior to Star Jet, Mr. Li founded United Eagle
Airlines as the first non-government-owned airline company in the history of Chinese aviation industry in 2004. From 2004 to 2008, Mr.
Li was the Chairman of United Eagle Airlines. He served as the Chairman of China Internet Investment Finance Holdings Limited (HKEx:
00810) from 2005 to 2007. In 2004, He was named as the Top Ten Most Influential People in China for his pioneer achievements in aviation
industry. In 1998, Mr. Li founded Guangdong Ying Lian Tong Telecommunication Services Co., Ltd and served as Chairman until 2004. From
1990 to 1998, Mr. Li served as Chairman of Huahui Import and Export Trading Company. From 1988 to 1990, Mr. Li served as a manager in
Guangdong Branch of China Council for the Promotion of International Trade. We believe that Mr. Li is qualified to sit on our board due
to his many years of public company management and director experience, along with his expertise in strategic planning, corporate financing
and business development.
Huifeng
Chang
. Mr. Chang has served as an Independent Director of our Board since May 2020. He has extensive experience in business supervision
and management. Since 2016, Mr. Chang has served as the chief financial officer and overseen a finance/accounting/tax/auditing staff
of 200 people at Canadian Solar Inc., a global company with $4 billion revenue across more than 20 countries. Mr. Chang has also been
a partner at Artis Consulting LLC since 2017 and a director at Aquamarine Capital Management LLC since 2015. From 2010 to 2015, Mr. Chang
was the head of trading at CICC US Securities, Inc.'s Equity Trading department and oversaw an equity trading desk that serves
over 300 institutional investors in the U.S. and over 50 institutional investors in China/Hong Kong SAR. From 2008 to 2010, Mr. Chang
was the CEO at China Southern Oriental Patron (CSOP) Asset Management, a company he started from scratch and led to full operation. From
2000 to 2008, Mr. Chang was an equity prop trader at Citigroup Global Capital Markets. Before that, he worked as a derivative and risk
modeler at Kamakura Corporation in Honolulu for a year. From 1995 to 1999, he served as a marketing manager at Philip Services Corporation
in Honolulu. Mr. Chang graduated from Nanjing Agricultural University with a Bachelor of Science in Soil Science and Agri-chemistry and
from the Chinese Academy of Science with a Master of Science in Soil Physics. He earned his Ph.D. in Soil Physics in 1991 and MBA in
1995 from the University of Hawaii. We believe Mr. Chang is qualified to serve as an independent director because he is experienced in
company management and business development.
Jian
Sun
. Mr. Sun has served as an Independent Director of our Board since May 2020. He has extensive experience in the accounting
field, both in academia and in practice. Mr. Sun is a Certified Public Accountant and has published articles in the field of accounting,
business finance, and corporate governance.
He has served as an independent director at Beijing
CTID Industry Operation & Management Co., Ltd. and at Innovita Biological Technology Co., Ltd.
Since 2017, Mr. Sun has been
a professor in the School of Accountancy at Central University of Finance and Economics in China (the "CUFE"). Since September
2016, he has also served as the vice dean at the CUFE. From 2009 to 2017, Mr. Sun taught at the CUFE, first as an assistant professor
and then as an associate professor. Since 2017, he has served as an independent director at Founder Financing Services Company Limited
and at Huadian Energy Company Limited. From 2015 to 2018, he served as an independent director at Panda Financial Company Limited. He
also holds part-time academic positions at the Accounting Information Committee of Accounting Society of China and Accounting Information
Standardization Committee of the China Ministry of Finance. Mr. Sun earned his bachelor's degree and master's degree in accounting
from Southeast University's Economic and Management School in 2003 and 2006, respectively. He obtained his Ph.D. in accounting
from Renmin University in 2009. From 2015 to 2016, he was a visiting scholar at Eli Broad Business School, Michigan State University.
We believe Mr. Sun is qualified to serve as an independent director because he has a deep understanding of accounting and has also served
as an independent director at various companies before.
Yibing
Liu
. Mr. Liu has served as an Independent Director of our Board since May 2020. He has rich experience and expertise with technology,
sales, strategy, and business development in the technology industry and in private equity and venture capital investment. Mr. Liu has
been the founder and the executive director of Xinjiang Holgus Enkeer IT Co., Ltd. and Xiamen Huachanghui Investment Co. Ltd. since 2017
and 2016, respectively. Mr. Liu has been the partner of Beijing Wuyue Yuanhang Venture Capital LLP and Tianjin Haiyin Private Investment
Fund LLP since 2015 and 2011, respectively. Mr. Liu received his master's degree from Peking University. We believe Mr. Liu is
qualified to serve as an independent director because he has practical experience and expertise in managing technology companies.
106
Voting
Agreement
Upon
the closing the Business Combination, we, Oriental Holdings Limited (the "Sponsor"), Lavacano and WBY entered into a six-year
Voting Agreement, which, among others, provides (i) Lavacano and WBY have the right to designate (A) 2 directors before the third anniversary
of the closing date and 3 directors thereafter and (B) 3 independent directors throughout the six-year term, and (ii) Sponsor has the
right to designate (A) 1 director until the third anniversary of the closing date and (B) 1 independent director throughout the six-year
term. The parties to the Voting Agreement agreed to vote in favor of election of the foregoing designees. For additional information
about such arrangement, please see "Item 7. Major Shareholders and Related Party Transaction—B. Related Party Transactions."
B.
Compensation of Directors
    and Executive Officers
Executive
Officers Compensation of Scienjoy Inc. for the Last Full Financial Year
For
the fiscal year ended December 31, 2022, we paid an aggregate of RMB1.9 million (US$0.3 million) in cash to our directors and executive
officers, and we paid an aggregate of RMB1.4 million cash compensation to certain of our non-executive directors. We have not set aside
or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries,
variable interest entities and their subsidiaries are required by law to make contributions equal to certain percentages of each employee's
salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident
fund. For share incentive grants to our directors and executive officers, see "—Equity Incentive Plan."
Equity
Incentive Plan
On
February 8, 2021, the Board of the Company approved the 2021 Plan, for the purpose of to providing additional incentives to employees,
directors and consultants and to promote the success of the Company's business. The 2021 Plan authorized the Board, any committee
appointed by Board, or any such person authorized by the Board or such committee, to grant equity incentive awards, including options,
restricted shares, and restricted share units to directors, employees and consultants of the Company for a number of Class A ordinary
shares not exceeding 3,000,000, subject to adjustments as may be required in accordance with the terms of the Plan. The vested portion
of equity awards will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. The maximum
exercisable term is ten years from the date of a grant. Late in 2022, the Company repurchased 794,120 restricted shares units. As of
the date of this report, a total of 2,115,283 restricted share units has been granted under 2021 Plan.
The
following paragraphs summarize the terms of the 2021 Plan.
Types
of Awards
. The 2021 Plan permits the awards of options, restricted shares and restricted share units.
Plan
Administration
. The 2021 Plan is administered by our Board or committee or individuals authorized by our Board. The plan administrator
is entitled to determine the participants who are to receive awards, the number of awards to be granted, and the terms and conditions
of each award grant.
Eligibility
.
Employees, directors and the consultants of our company and any Related Entity (as defined in the 2021 Plan) are eligible to participate
pursuant to the terms of the 2021 Plan.
Conditions
of Award
. Subject to the terms of the Plan, the plan administrator shall determine the provisions, terms, and conditions of each
award including, but not limited to, the award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions,
form of payment (cash, shares, or other consideration) upon settlement of the award, payment contingencies, and satisfaction of any performance
criteria.
Term
of Award
. The term of each award shall be fixed by the administrator and is stated in the award agreement between recipient of an
award and us. No award shall be granted under the 2021 Plan after ten years from the date the 2021 Plan was approved by the board.
Vesting
Schedule
. In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement.
Termination
and Amendment
. Unless terminated earlier, the 2021 Plan has a term of 10 years. The plan administrator has the authority to amend
or terminate the 2021 Plan, provided that, such termination or amendment shall not adversely affect in any material way any awards previously
granted unless agreed by the relevant grantee.
107
C.
Board Practices
We
are managed by a Board which currently consists of seven directors. Our Fourth Amended and Restated Memorandum and Articles of Association
provides that the minimum number of directors shall be two and there shall be no maximum number of directors. Subject to the Voting Agreement,
the directors shall be elected by Resolution of Shareholders or, where permitted by our Fourth Amended and Restated Memorandum and Articles
of Association, by Resolution of Directors. Pursuant to the respective director service agreement, the current directorship term of each
of our current non-executive directors (including the independent directors) shall expire on the earlier of the date of the next annual
stockholders meeting and the earliest of the following to occur: (a) the death of the director; (b) the termination of the director from
his membership on the Board by the mutual agreement of us and the director; (c) the removal of the director from the Board in accordance
with our governing documents; and (d) the resignation by the director from the Board.
Employment
Agreements
Prior
to the closing of the Business Combination, we had not entered into any employment agreements with our executive officers, and had not
made any agreements to provide benefits upon termination of employment. Our current executive officers have entered into employment agreements
with certain of our operating subsidiaries. These agreements each contain customary terms, including each executive officer's salary,
bonus, duties, employment benefits, noncompetition, non-solicitation, confidentiality of information, assignment of inventions and intellectual
property, and termination. Either party may terminate these employment agreements with either thirty days' written notice to the
other party as specified in the respective agreements, or we may elect to terminate any of these service agreements and make a one-month
payment in lieu of notice. We may also terminate an executive officer's employment for certain causes, at any time, without prior
notice or compensation. The foregoing description of the terms of the employment agreements is qualified in its entirety by reference
to the provisions of the Employment Agreements filed as Exhibit 4.9 to 4.12 to this annual report on Form 20-F, which is incorporated
herein by reference.
Director
Service Agreements
In
connection with their election as our directors, each of our current non-executive directors (including the independent directors) has
entered into a standard director service agreement (the "Form Director Service Agreement") with us, pursuant to which (a)
such director will be entitled to annual cash retainers and/or equity incentive plans (which have yet to be established), (b) we agreed
to indemnify its directors to the fullest extent authorized in our governing documents and applicable law, and such indemnity only applies
if the director acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, we had no
reasonable cause to believe that the director's conduct was unlawful; and (c) the directorship term will expire at the next annual
stockholders meeting, subject to earlier extraordinary events. The foregoing description of the terms of the Form Director Service Agreement
is qualified in its entirety by reference to the provisions of the Form Director Service Agreement filed as Exhibit 4.8 to this annual
report, which is incorporated herein by reference.
Committees
of the Board of Directors
There
are three standing committee of our Board: the Audit Committee, the Nominating Committee and the Compensation Committee. The composition
of each committee are described below:
●
Audit Committee: Jian Sun
    (Chairperson), Huifeng Chang, and Yibing Liu;
●
Nominating Committee: Huifeng
    Chang (Chairperson), Jian Sun, and Yibing Liu; and
●
Compensation Committee:
    Yibing Liu (Chairperson), Huifeng Chang, and Jian Sun.
The
members of each committee are all "independent" under the Nasdaq's listing standards. Mr. Chang is also a "financial
expert" under the listing requirements of Nasdaq.
The
Audit Committee, which is established in accordance with Section 3(a)(58)(A) of the Exchange Act, engages our independent accountants,
reviewing their independence and performance; reviews our accounting and financial reporting processes and the integrity of its financial
statements; the audits of our financial statements and the appointment, compensation, qualifications, independence and performance of
our independent auditors; our compliance with legal and regulatory requirements; and the performance of our internal audit function and
internal control over financial reporting.
The
Nominating Committee is responsible for overseeing the selection of persons to be nominated to serve on our Board. Specifically, the
Nominating Committee makes recommendations to the Board regarding the size and composition of the Board, establishes procedures for the
director nomination process and screens and recommends candidates for election to the Board. On an annual basis, the Nominating Committee
recommends for approval by the Board certain desired qualifications and characteristics for board membership. Additionally, the Nominating
Committee establishes and administers a periodic assessment procedure relating to the performance of the Board as a whole and its individual
members. The Nominating Committee will consider a number of qualifications relating to management and leadership experience, background
and integrity and professionalism in evaluating a person's candidacy for membership on the Board. The Nominating Committee may
require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to
time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The
nominating committee does not distinguish among nominees recommended by shareholders and other persons.
108
The
Compensation Committee reviews annually our corporate goals and objectives relevant to the officers' compensation, evaluates the
officers' performance in light of such goals and objectives, determines and approves the officers' compensation level based
on this evaluation; makes recommendations to the Board regarding approval, disapproval, modification, or termination of existing or proposed
employee benefit plans, makes recommendations to the Board with respect to non-CEO and non-CFO compensation and administers our incentive-compensation
plans and equity-based plans. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees as
it may deem appropriate in its sole discretion. Our chief executive officer of may not be present during voting or deliberations of the
Compensation Committee with respect to his compensation. our executive officers do not play a role in suggesting their own salaries.
Neither we nor the Compensation Committee has engaged any compensation consultant who has a role in determining or recommending the amount
or form of executive or director compensation.
D.
Employees
We
had 285 employees as of December 31, 2021 and 277 employees as of December 31, 2022. As of December 31, 2021 and as of December 31, 2022,
all of our employees were located in China. The following table sets forth a breakdown of our employees by function as of December 31,
2021 and as of December 31, 2022.
As of December 31,
2022
As of December 31,
2021
Number
%
Number
%
Functions:
General Operations
75
27.1
%
76
26.7
%
Research and Development
111
40.1
%
99
34.7
%
Sales and Marketing
14
5.1
%
21
7.4
%
Legal and Internal Audit
4
1.4
%
1
0.4
%
General Administration
40
14.4
%
46
16.1
%
Product
33
11.9
%
42
14.7
%
Total number of employees
277
100
%
285
100
%
E.
Share Ownership
The
following tables sets forth information regarding the beneficial ownership of the Company's ordinary shares:
●
each person known to the
    Company who is the beneficial owner of more than 5% of any class of its stock;
●
each of its officers and
    directors; and
●
all of its officers and
    directors as a group.
Unless
otherwise indicated, the Company believes that all persons named in the table have, immediately prior to the date of the report, sole
voting and investment power with respect to all of the Company's securities beneficially owned by them.
Beneficial
ownership is determined in accordance with SEC rules and includes voting or investment power with respect to securities. Except as indicated
by the footnotes below, we believe, based on the information furnished to it, that the persons and entities named in the table below
have, immediately prior to the date of this report, sole voting and investment power with respect to all stock that they beneficially
own, subject to applicable community property laws. All Company stock subject to options or warrants exercisable within 60 days of the
consummation of this report are deemed to be outstanding and beneficially owned by the persons holding those options or warrants for
the purpose of computing the number of shares beneficially owned and the percentage ownership of that person. They are not, however,
deemed to be outstanding and beneficially owned for the purpose of computing the percentage ownership of any other person.
109
The
percentages in the table are based on 37,679,786 shares of Class A ordinary shares and 2,925,058 shares of Class B ordinary shares and
6,023,700 warrants outstanding as of April 18, 2023, assuming none of the warrants have been exercised. In calculating this percentage
for a particular holder, we treated as outstanding the number of our Class A ordinary shares issuable upon exercise of that particular
holder's warrants and did not assume exercise of any other holder's warrants.
Ordinary Shares Beneficially Owned
Class A  Ordinary  Shares
Class B  Ordinary  Shares
Total  Ordinary  Shares on an  As-converted  Basis
% of Beneficial Ownership
% of Aggregate Voting Power
Number
Number
Number
%
%
Director and Executive Officers: (1)
Xiaowu He (2)
5,032,208
2,925,058
7,957,266
19.60
%
51.22
%
Bo Wan (3)
1,968,308
-
1,968,308
4.85
%
2.94
%
Yongsheng Liu
*
-
*
*
*
Hucheng Zhou
-
-
-
-
-
Huifeng Chang
*
-
*
*
*
Jian Sun
*
-
*
*
*
Yibing Liu
*
-
*
*
*
Denny Tang
-
-
-
-
-
All Directors and Executive Officers as a Group (8 individuals)
7,238,616
2,925,058
10,163,674
25.03
%
54.52
%
Principal Shareholders:
Wolter Global Investment Limited (4)**
4,269,114
-
4,269,114
10.51
%
6.38
%
WBY Entertainment Holdings Ltd. (3) (5)**
1,968,308
-
1,968,308
4.85
%
2.94
%
Heshine Holdings Limited (2)**
5,032,208
2,925,058
7,957,266
19.60
%
51.22
%
Tongfang Stable Fund (6)**
12,113,334
-
12,113,334
29.83
%
18.10
%
*
Less than 1%
**
The share numbers of each of these shareholders are
    based on the most recent Schedule 13D filed by such shareholder.
(1)
Unless otherwise indicated,
    the business address of each of the individuals is c/o Scienjoy Holding Corporation RM1118, 11th Floor, Building 3, No. 99 Wangzhou
    Rd., Liangzhu St., Yuhang District, Hangzhou, Zhejiang Province, P.R. China.
(2)
Mr.
    Xiaowu He owns 100% equity interest in Heshine Holdings Limited. He has the sole voting and dispositive power over the securities
    held by Heshine Holdings Limited.
(3)
Mr. Bo Wan has sole voting
    and dispositive power over the shares owned by WBY Entertainment Holdings Ltd.
(4)
The
    address of Wolter Global Investment Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British
    Virgin Island.
(5)
The
    address of WBY Entertainment Holdings Ltd. is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British
    Virgin Islands.
(6)
The
    address of Tongfang Stable Fund is Unit 2102-3, Golden Centre, 188 Des Voeux Road, Central, Hong Kong.
110
As
of April 18, 2023, 20,173,839 of our Class A Ordinary Shares are held by record holders in the United States.
F.
Disclosure of a Registrant's
    Action to Recover Erroneously Awarded Compensation
Not
applicable.
ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major Shareholders
Please
refer to "Item 6. Directors, Senior Management and Employees—E. Directors, Senior Management and Employees—Share Ownership."
B.
Related Party Transactions
The
following discussion is a brief summary of certain material arrangements, agreements and transactions we have with related parties.
Insider
Shares
In
July 2018, the Company issued an aggregate of 1,150,000 founder shares to the shareholders immediately prior to the date of certain
S-1 registration statement filed by Wealthbridge Acquisition Limited in 2019 (the "Initial Shareholders") for an aggregate
purchase price of $25,100 in cash. On October 15, 2018, the Company effected a 5 for 4 stock split of its Class A ordinary shares,
resulting in 1,437,500 founder shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock
split. The founder shares included an aggregate of up to 187,500 shares subject to forfeiture by the Initial Shareholders to the extent
that the underwriters' over-allotment is not exercised in full or in part, so that the Initial Shareholders would collectively
own 20% of the Company's issued and outstanding shares after the IPO (assuming the Initial Shareholders did not purchase any Public
Shares in the IPO and excluding the Private Units and underlying securities). In connection with the underwriters' exercise of
the over-allotment option in full on February 20, 2019, 187,500 founder shares are no longer subject to forfeiture.
The
Initial Shareholders have agreed not to transfer, assign or sell any of the founder shares (except to certain permitted transferees)
until (1) with respect to 50% of the founder shares, the earlier of six months after the completion of a business combination and the
date on which the closing price of the Class A ordinary shares equals or exceeds $12.50 per share for any 20 trading days within any
30-trading day period commencing after a Business Combination and (2) with respect to the remaining 50% of the founder shares, six months
after the completion of a business combination, or earlier, in either case, if, subsequent to a business combination, the Company completes
a liquidation, merger, share exchange or other similar transaction which results in all of the Company's shareholders having the
right to exchange their Class A ordinary shares for cash, securities or other property.
Private
Placements
Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 247,500 Private Units at a price of $10.00 per Private Unit, or $2,475,000
in the aggregate. On February 20, 2019, in connection with the underwriters' exercise of the over-allotment option in full, the
Sponsor purchased an additional 22,500 Private Units for an aggregate purchase price of $225,000. The proceeds from the Private Units
were added to the proceeds from the IPO held in the trust account. The Private Units are identical to the units sold in the IPO except
the Private Units will be non-redeemable. In connection with the closing of the Business Combination, these units were converted into
297,000 shares and 135,000 warrants.
Registration
Rights Agreements
In
connection with our IPO, we, the Initial Shareholders and Sponsor entered into a registration right agreement, pursuant to which the
holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the
majority of the Initial Shares can elect to exercise these registration rights at any time commencing three months prior to the date
on which these Class A ordinary shares are to be released from escrow. The holders of a majority of the Sponsor Shares can elect to exercise
these registration rights at any time after we consummate a business combination. In addition, the Initial Shareholders and Sponsor have
certain "piggy-back" registration rights with respect to registration statements filed subsequent to our consummation of
a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Chardan
Capital Markets, LLC ("Chardan"), our underwriter during our IPO, has joined this registration right agreement with respect
to the 402,983 Class A Ordinary Shares issued to Chardan by the Company in full satisfaction of the deferred underwriting commission.
111
In
addition, in connection with the Business Combination, we, Lavacano and WBY entered into a registration rights agreement, providing for
the registration of the Class A ordinary shares issued to Lavacano and WBY pursuant to the terms of the Share Exchange Agreement ("Merger
Shares"). Pursuant to the registration rights agreement, at any time on and after May 7, 2020, Lavacano and WBY are entitled to
(i) make up to two written demand for registration under the Securities Act of all or part of the Merger Shares, and (ii) certain "piggy-back"
registration rights with respect to registration statements filed following the consummation of the Business Combination. We will bear
the expenses incurred in connection with the filing of any such registration statements.
Voting
Agreement
In
connection with the Business Combination, the Sponsor, Lavacano, WBY and we have entered into a six year Voting Agreement, which provides
that after the closing of the Business Combination and as promptly as practicable following the determination that we qualify as a Foreign
Private Issuer, each party to the Voting Agreement agrees to vote to reclassify our Ordinary Shares into class A and class B ordinary
shares and convert a certain amount of class A ordinary shares to class B ordinary shares. The Voting Agreement further provides that
(i) Lavacano and WBY have the right to designate (A) 2 directors before the third anniversary of the closing date and 3 directors thereafter
and (B) 3 independent directors throughout the six-year term, and (ii) Sponsor has the right to designate (A) 1 director until the third
anniversary of the closing date and (B) 1 independent director throughout the six-year term and the parties to the Voting Agreement must
vote in favor of such election of directors.
Indemnification
Agreements
Effective
as of the closing date of the Business Combination, we entered into indemnification agreements with certain of our directors. Each indemnification
agreement provides that, subject to limited exceptions, and among other things, we will indemnify the director to the fullest extent
permitted by law for claims arising in his or her capacity as our director.
Additional
Earn-out Shares for Lavacano and WBY
Pursuant
to the Share Exchange Agreement, Lavacano and WBY may be entitled to receive additional earn-out shares as follows: (1) if the Company's
net income before tax for the year ended December 31, 2020 is greater than or equal to either US$28,300,000 or RMB 190,000,000, Lavacano
and WBY will be entitled to receive 3,000,000 Class A ordinary shares of SHC (subject to the reclassification of our Class A Ordinary
shares as described in more details under Section "Voting Agreement" above); and (2) if the Company net income before tax
for the year ended December 31, 2021 is greater than or equal to either US$35,000,000 or RMB 235,000,000, Lavacano and WBY will be entitled
to receive 3,000,000 Class A Ordinary Shares (subject to the reclassification of our Class A Ordinary shares as described in more details
under Section "Voting Agreement" above). The Company's net income before tax has achieved more than RMB 190,000,000
for the year ended December 31, 2020, therefore the Company has issued 2,400,000 Class A Ordinary Shares to Lavacano and 600,000 Class
A Ordinary Shares to WBY on March 25, 2021.The Company's net income before taxes has achieved more than 235,000,000 for the year
ended December 31, 2021, therefore, the Company was approved to subsequently issue the related earnout shares in 2022.
Notwithstanding
the net income before tax achieved by the Company for any period, Lavacano and WBY will receive (i) 3,000,000 earn-out shares if the
Company's share price is higher than $20.00 for any sixty days in any period of ninety consecutive trading days between the 13th
month and 24th month following the Business Combination, and (ii) 3,000,000 earn-out shares if the Company's share price is higher
than $25.00 for any sixty days in any period of ninety consecutive trading between the 25th month and 36th month following the Business
Combination.
Lavacano
has agreed to distribute to Heshine and TFSF all the earnout shares it has and will receive from the Company: 60% of the earnout shares
it receives from the Company to TFSF and 40% of the earnout shares to Heshine.
Unit
Purchase Option with Chardan
We
sold Chardan, for $100, an option to purchase up to a total of 431,250 units exercisable, in whole or in part, at $11.50 per unit (or
an aggregate exercise price of $4,959,375) commencing on the later of the consummation of the Business Combination. Since the rights
underlying the units automatically converted into Class A Ordinary Shares upon our Business Combination, the option effectively represents
the right to purchase 474,375 Class A Ordinary Shares. The purchase option also represents 431,250 warrants to purchase 215,625 Class
A Ordinary Shares, for $2,479,687.5. The purchase option may be exercised for cash or on a cashless basis, at the holder's option,
and expires five years on February 5, 2024. The option grants to holders demand and "piggy back" rights for periods of five
and seven years, respectively, from the date of our IPO of the securities directly and indirectly issuable upon exercise of the option.
The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the
event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted
for issuances of Class A ordinary shares at a price below its exercise price.
112
As
of the date of this report, Chardan has exercised a portion of its Unit Purchase Option to purchase 100,000 units of the Company, and
the Company has issued 110,000 Class A Ordinary Shares and 100,000 warrants to Chardan.
Additional
Earn-out Shares for Cosmic Soar Limited
Pursuant
to the earn-out provisions of the BeeLive Acquisition Agreement, so long as the prior core management members of BeeLive group have complied
with the employment agreement that he or she has entered into with BeeLive group and no material changes have occurred, (i) if the BeeLive
group's total annual revenue is no less than RMB 336.6 million in Year 2020, Cosmic Soar Limited will be entitled to received additional
540,960 Class A Ordinary Shares; (ii) if the BeeLive group' total annual revenue is no less than RMB 460.6 million in Year 2021,
Cosmic Soar Limited will be entitled to received additional 540,960 Class A Ordinary Shares; and (iii) if the BeeLive group' total
annual revenue is no less than RMB 580.9 million in Year 2022, Cosmic Soar Limited will be entitled to received additional 540,960 Class
A Ordinary Shares. If the total annual revenue of BeeLive group in a particular performance year does not reach the target revenue as
specified above, but is equal to or more than 80% of the target revenue, Cosmic Solar Limited will be entitled to a reduced number of
the earn-out shares. BeeLive group's total annual revenue has achieved more than RMB 336.6 million for Year 2020, therefore the
Company has issued 540,960 Class A Ordinary Shares to Cosmic Soar Limited on March 25, 2021. BeeLive group's total annual revenue
has achieved more than RMB 460.0 million for Year 2021, therefore, the Company was approved to subsequently issue the 540,960 earnout
shares in 2022. Since BeeLive group's total annual revenue only reached more than 80% of the target revenue in 2022 but less than
100% of the target revenue in 2022, the Company was approved to issue 507,804 shares in 2023.
Resale
Lock-up Agreement with Cosmic Soar Limited
In
connection with the Beelive Acquisition, we entered into a Resale Lock-Up Agreement with Cosmic Soar Limited ("Cosmic") on
September 10, 2020, providing that Cosmic will not, within 365 calendar days from the date thereof, offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any of the lock-up shares (including (i) 3,786,719 Class A ordinary shares issued to
Cosmic at the closing of the BeeLive Acquisition, and (ii) any Class A ordinary shares acquired during the lock-up period, if any), enter
into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of such shares, whether any of these transactions are to be settled by delivery of
any such shares, in cash, or otherwise, publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into
any transaction, swap, hedge or other arrangement, or engage in any short sales, as defined in Rule 200 under Regulation SHO under the
Exchange Act, with respect to any securities of the Company.
Resale
Lock-up Agreement with Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership)
In
connection with the Hongle Acquisition, we entered into a Resale Lock-Up Agreement with Weilaijin Industry Investment Fund Partnership
(Limited Partnership) ("Weilaijin") on Jan. 1, 2022, providing that Weilaijin will not, within 180 calendar days from the
date of issuance of Class A ordinary shares of the Company, offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any of the lock-up shares (including (i) 636,691 Class A ordinary shares issued to Weilaijin at the closing of the Hongle
Acquisition, and (ii) any Class A ordinary shares acquired during the lock-up period, if any), enter into a transaction that would have
the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of such shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise,
publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other
arrangement, or engage in any short sales, as defined in Rule 200 under Regulation SHO under the Exchange Act, with respect to any securities
of the Company.
Resale
Lock-up Agreement with Wolter Global Investment Limited
In
connection with the Hongle Acquisition, we entered into a Resale Lock-Up Agreement with Wolter Global Investment Limited ("Wolter
Global") on Jan. 1, 2022, providing that Wolter Global will not, within 180 calendar days from the date of issuance of Class A
ordinary shares of the Company, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the lock-up
shares (including (i) 3,898,511 Class A ordinary shares issued to Wolter Global at the closing of the Hongle Acquisition, and (ii) any
Class A ordinary shares acquired during the lock-up period, if any), enter into a transaction that would have the same effect, or enter
into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such
shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise, publicly disclose
the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or
engage in any short sales, as defined in Rule 200 under Regulation SHO under the Exchange Act, with respect to any securities of the
Company.
113
Additional
Earn-Out Shares for Wolter Global
Pursuant
to the earn-out provisions of the Equity Acquisition Framework Agreement, so long as the prior core management members of Golden Shield
and/or Weiliantong group have complied with the employment agreement that he or she has entered into with Golden Shield and/or Weiliantong
group and no material changes have occurred, (i) if the Golden Shield and/or Weiliantong group's total annual revenue is no less
than RMB 280 million in Year 2022, Wolter Global will be entitled to received additional 487,314 Class A Ordinary Shares; and (ii) if
the Golden Shield and/or Weiliantong group' total annual revenue is no less than RMB 360 million in Year 2023, Wolter Global will
be entitled to received additional 487,314 Class A Ordinary Shares. If the total annual revenue of Golden Shield and/or Weiliantong group
in a particular performance year does not reach the target revenue as specified above, but is equal to or more than 80% of the target
revenue, Wolter Global will be entitled to a reduced number of the earn-out shares. Golden Shield and/or Weliantong group's total
annual revenue achieved more than RMB 280 million for Year 2022, therefore, the Company was approved to issue the 487,314 earnout shares
in 2023.
Contractual
Arrangements with VIEs and the Shareholders of the VIEs
Please
see "Item 4. Information on the Company—A. History and Development of the Company, and Item 4. Information on the Company—Organizational
Structure."
Other
Transactions with Related Parties
The
principal related parties with which the Company had transactions during the years presented are as follows:
Name
    of Related Parties
Relationship
    with the Company
Mr. He Xiaowu
Chief Executive Officer
    and Chairman of the Board
Sixiang Times (Beijing)
    Technology Co., Ltd.
Where the Company's
    executive is one of the major shareholders
Beijing Junwei Technology
    Co., Ltd.
Controlling shareholder
    of SG and HX
Beijing WanPu Century
    Technology Co Ltd
Subsidiary
    company of Beijing NQ Mobile Inc., which was holding company of Sixiang Times (Beijing) Technology Co., Ltd
Lavacano Holdings Limited
Where Mr. He Xiaowu
    acted as director
ENMOLI INC
Where Mr. He Xiaowu
    acted as director
Dingsheng
    Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)
Controlled by a direct
    relative of CEO
Chengdu
    Brightfututure Education Technology Co., Ltd
Controlled by a direct
    relative of CEO
Purchases
from related parties
For
the years ended December 31, 2020, 2021 and 2022, significant related party transactions were as follows:
For the years ended December 31,
2020
2021
2022
2022
(All amounts in thousands)
RMB
RMB
RMB
USD
Sixiang Times (Beijing) Technology Co., Ltd.
Rental and service fees
2,106
531
-
-
ENMOLI INC
Interest expense
-
480
-
-
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)
Interest income
-
462
-
-
114
Balances
with related parties
As
of December 31, 2021 and 2022, the amounts due from/to related parties are as follows:
2021
2022
2022
(All amounts in thousands)
RMB
RMB
USD
Amount due from related parties
Lavacano Holdings Limited
7
-
-
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)
. (1)
1,052
1,052
153
Chengdu Brightfututure Education Technology Co.,Ltd
-
63
9
Total
1,059
1,115
162
1)
The balance represented
    loan receivable balance from Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership). The loan
    was interest free and due on December 31, 2022. The loan was collected on March 16, 2023 subsequently.
On
January 5, 2021, the Company entered into a US dollar borrowing agreement with Enmoli Inc, a company controlled by Mr. Xiaowu He, the
Chairman and chief executive officer of the Company. Pursuant to the agreement, the Company borrowed US$ 2 million from Enmoli Inc. with
a term of 1 year and an annual interest of 4%. The purpose of the borrowing is to provide sufficient US dollar funds for the Company's
oversee business development. The amount was offset with the amount loaned to Dingsheng Taifu (Tianjin) Business Information Consulting
Partnership (Limited Partner).
On
January 5, 2021, the Company loaned RMB 13 million (or approximately US$2 million) to Dingsheng Taifu (Tianjin) Business Information
Consulting Partnership (Limited Partner), an entity related to Mr. Xiaowu He, the Chairman and chief executive officer of the Company
for a term of 1 year with an annual interest of 4%. The amount was offset with the amount loaned from Enmoli Inc. After the offset, balance
due from Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partner) was RMB 1.1 million as of December 31,
2022.
On
January 11, 2021, the Company entered into a share purchase agreement (the "Share Purchase Agreement") with Cross Wealth
Investment Holding Limited ("Cross Wealth"), an entity related to two directors of the Company. Pursuant to the Share Purchase
Agreement, the Company purchased 606,061 ordinary shares ("Shares") of Goldenbridge Acquisition Limited ("Goldenbridge")
from Cross Wealth for an aggregated consideration of US$ 2 million or US$3.3 per share (the "Share Price"). Goldenbridge
was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization
or similar business combination with one or more businesses or entities ("De-SPAC") and is currently conducting an initial
public offering of its securities ("Offering"). The Company's share purchase is for investment purposes only and will
not participate in any activities conducted by Cross Wealth in its capacity as the sponsor, promotor or similar role in connection with
the Offering or the De-SPAC. If the Goldenbridge fails to consummate the Offering prior to June 30, 2021 or other date as mutually agreed
by the Seller and the Company, the Company shall have the rights in its discretion, but not the obligation, to cause the Seller to repurchase
back all or a portion of the Shares at the Share Price at any time. If Goldenbridge fails to consummate a De-SPAC within 21 months after
the consummation of the Offering, the Buyer shall have the rights in its discretion, but not the obligation, to cause the Seller to repurchase
back all or a portion of the Shares at the Share Price at any time. In addition, at any time before the eighteenth month anniversary
of the completion of De-SPAC, if the Company plans to resell or otherwise transfer any portion or all of the shares at a price less than
the Share Price, the Seller shall have the right in its discretion, but not the obligation, to repurchase back all or a portion of the
Shares at the Share Price ("Right of First Refusal"). In the event that Seller opts not to exercise its Right of First Refusal,
then the Seller shall pay the Company an amount equal to (i) the price shortfall multiplied by (ii) the number of the Shares being resold
or transferred; provided that in case of a privately negotiated sale, such transfer or resale shall be negotiated in good faith and at
arm's-length by parties of equal bargaining strength.
115
Related
Party Policy
Our
Code, requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests,
except under guidelines approved by the board of directors (or the audit committee). A conflict of interest situation can arise when
a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts
of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her
position.
Our
audit committee, pursuant to its written charter, is responsible for reviewing any conflicts of interest and related-party transactions
to assess an impact on the Company's internal controls on financial reporting and disclosure.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a
conflict of interest on the part of a director, employee or officer.
Board
Diversity Matrix
Board Diversity Matrix (As of April 18, 2023)
Country of Principal Executive Offices
China
Foreign Private Issuer
Yes
Disclosure Prohibited Under Home Country Law
No
Total Number
7
Female
Male
Non-Binary
Did Not Disclose Gender
Part I: Gender Identity
Directors
0
7
0
0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
0
LGBTQ+
0
Did Not Disclose Demographic Background
0
C.
Interests of Experts
    and Counsel
Not
Applicable.
ITEM
8. FINANCIAL INFORMATION
A.
Consolidated Statements
    and Other Financial Information
Please
refer to Item 18 "Financial Statements" for our audited consolidated financial statements filed as part of this annual report.
Legal
Proceedings
We
are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or
administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding,
regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management's time
and attention. See "Item 3. Key Information—D. Risk Factors—Risk Factors Relating to Our Business and Industry—We
may be held liable for information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if
such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us," and "Item
3. Key Information—D. Risk Factors—Risk Factors Relating to Our Business and Industry—We may be subject to intellectual
property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked
to our platforms, or distributed to our users, or for proprietary information appropriated by former employees, which may materially
and adversely affect our business, financial condition and prospects."
Dividend
Policy
Since
inception, we have not declared or paid any dividends on our Class A ordinary shares. We do not have any present plans to pay any dividends
on our Class A ordinary shares in the foreseeable future. We intend to retain most, if not all, of our available funds and any future
earnings to operate and expand our business.
The
determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including
our future operations and earnings, capital requirements and surplus, general financial condition, contractual and legal restrictions
and other factors that the board of directors may deem relevant.
116
We
are a company formed under the laws of the British Virgin Islands and all of operations are currently in the PRC.
Under
British Virgin Islands law, we may only pay dividends from surplus (the excess, if any, at the time of the determination of the total
assets of our company over the sum of our liabilities, as shown in our books of account, plus our capital), and we must be solvent before
and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary course
of business; and the realizable value of assets of our company will not be less than the sum of our total liabilities, other than deferred
taxes as shown on our books of account, and our capital.
In
order for us to distribute any dividends to our shareholders, we currently would have to on dividends distributed by our PRC subsidiaries.
Certain payments from our PRC subsidiaries to us may be subject to PRC withholding income tax. In addition, regulations in the PRC currently
permit payment of dividends of a PRC company only out of accumulated distributable after-tax profits as determined in accordance with
its articles of association and the accounting standards and regulations in China. Each of our PRC subsidiaries is required to set aside
at least 10% of its after-tax profit based on PRC accounting standards every year to a statutory common reserve fund until the aggregate
amount of such reserve fund reaches 50% of the registered capital of such subsidiary. Such statutory reserves are not distributable as
loans, advances or cash dividends.
B.
Significant Changes
Except
as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.
ITEM
9. THE OFFER AND LISTING
A.
Offer and Listing Details
See
"—C. Markets."
B.
Plan of Distribution
Not
Applicable.
C.
Markets
Our
Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "SJ", and our Public Warrants are traded
on OTC under the symbol "SJOYW".
D.
Selling Shareholders
Not
Applicable.
E.
Dilution
Not
Applicable.
F.
Expenses of the Issue
Not
Applicable.
ITEM
10. ADDITIONAL INFORMATION
A.
Share Capital
Not
Applicable.
117
B.
Memorandum and Articles
    of Association
We
are a company incorporated in the British Virgin Islands as a BVI business company (with company number 1977965) whose registered office
is at Clarence Thomas Building, Road Town, Tortola, British Virgin Islands, and our affairs are governed by our Memorandum and Articles
of Association and the laws of the British Virgin Islands. For the purposes of the BVI Act, there are no limitations on the business
that we may carry on.
Pursuant
to our Memorandum and Articles of Association, we shall issue registered shares only. We are not authorized to issue bearer shares, convert
registered shares to bearer shares or exchange registered shares for bearer shares. We are currently authorized to issue an unlimited
number of shares of Class A ordinary shares, 2,925,058 Class B ordinary shares and 50,000,000 Class A preferred shares, each with no
par value. Shares may be issued in one or more series of shares as the directors may by Resolution of Directors determine from time to
time. As of April 18, 2023, 37,679,786 Class A ordinary shares and 2,925,058 shares of Class B ordinary shares are issued and outstanding.
Class
A Ordinary Shares
Pursuant
to our Memorandum and Articles of Association, holders of Class A ordinary shares do not have any conversion, preemptive or other subscription
rights and there will be no sinking fund provisions applicable to the Class A ordinary shares.
Each
Class A ordinary share confers upon the shareholder:
●
the right to one vote at
    a meeting of the Shareholders or on any resolution of shareholders;
●
the right to an equal share in any dividend paid by
    us; and
●
the right to an equal share in the distribution of
    our surplus assets on our liquidation.
Class
B Ordinary Shares
Pursuant
to our Memorandum and Articles of Association, holders of Class B ordinary shares do not have any conversion, preemptive or other subscription
rights and there will be no sinking fund provisions applicable to the Class B ordinary shares.
Each
Class B ordinary share confers upon the shareholder:
●
the right to ten vote at
    a meeting of the Shareholders or on any resolution of shareholders;
●
the right to an equal share
    in any dividend paid by us; and
●
the right to an equal share
    in the distribution of our surplus assets on our liquidation.
Class
A Preferred Shares
Our
Memorandum and Articles of Association authorizes our board of directors to establish from time to time one or more series of Class A
preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
●
the designation of the series;
●
the number of shares of the series;
●
the dividend rights, dividend rates, conversion rights,
    and voting rights; and
●
the rights and terms of redemption and liquidation
    preferences.
Our
board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these
shares may dilute the voting power of holders of Class A ordinary shares.
118
You
should refer to the prospectus supplement relating to the series of Class A preferred shares being offered for the specific terms of
that series, including:
●
title of the series and the number of shares in the
    series;
●
the price at which the preferred shares will be offered;
●
the dividend rate or rates
    or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative
    or noncumulative, and, if cumulative, the dates from which dividends on the preferred shares being offered will cumulate;
●
the voting rights, if any, of the holders of preferred
    shares being offered;
●
the provisions for a sinking
    fund, if any, and the provisions for redemption, if applicable, of the preferred shares being offered, including any restrictions
    on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;
●
the liquidation preference per share;
●
the terms and conditions,
    if applicable, upon which the preferred shares being offered will be convertible into our Class A ordinary shares, including the
    conversion price, or the manner of calculating the conversion price, and the conversion period;
●
the terms and conditions,
    if applicable, upon which the preferred shares being offered will be exchangeable for debt securities, including the exchange price,
    or the manner of calculating the exchange price, and the exchange period;
●
any listing of the preferred shares being offered on
    any securities exchange;
●
a discussion of any material
    federal income tax considerations applicable to the preferred shares being offered;
●
any preemptive rights;
●
the relative ranking and
    preferences of the preferred shares being offered as to dividend rights and rights upon liquidation, dissolution, or the winding
    up of our affairs;
●
any limitations on the
    issuance of any class or series of preferred shares ranking senior or equal to the series of preferred shares being offered as to
    dividend rights and rights upon liquidation, dissolution, or the winding up of our affairs; and
●
any additional rights, preferences, qualifications,
    limitations, and restrictions of the series.
Issuance
of Class A preferred shares may dilute the voting power of holders of ordinary shares.
Existing
Warrants
As
of April 18, 2023, we have 6,023,700 warrants outstanding ("Existing Warrants"). All Existing Warrants are governed by that
certain Warrant Agreement, dated February 5, 2019, by and between Continental Stock Transfer & Trust Company and us (the "Warrant
Agreement"). The following summary of certain provisions relating to our warrants s does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Warrant Agreement.
Each
Existing Warrant entitles the registered holder to purchase one-half (1/2) of one Class A ordinary share at a price of $11.50 per share,
subject to adjustment as discussed below, at any time commencing on the later of the completion of an initial business combination and
12 months from the date of the IPO Registration Statement. Pursuant to the Warrant Agreement, an Existing Warrant holder may exercise
its Existing Warrants only for a whole number of shares. This means that only an even number of Existing Warrants may be exercised at
any given time by a Warrant holder. However, except as set forth below, other than the Oriental Warrants, no Existing Warrants will be
exercisable for cash unless we have an effective and current registration statement covering the Class A ordinary shares issuable upon
exercise of the warrants and a current prospectus relating to such Class A ordinary shares. Notwithstanding the foregoing, if a registration
statement covering the Class A ordinary shares issuable upon exercise of the Existing Warrants is not effective within 90 days from the
consummation of our initial business combination, Warrant holders may, until such time as there is an effective registration statement
and during any period when we shall have failed to maintain an effective registration statement, exercise Existing Warrants on a cashless
basis. The Existing Warrants will expire on the earlier to occur of (i) five years from the effective date of the IPO Registration Statement
at 5:00 p.m., Eastern Standard Time and (ii) the date fixed for redemption of Existing Warrants as provided in the Warrant Agreement.
We may extend the duration of the Existing Warrants by delaying the expiration date; provided, however, that we will provide written
notice of not less than 10 days to registered holders of such extension and that such extension shall be identical in duration among
all of the then outstanding Existing Warrants.
119
We
may call the outstanding Existing Warrants for redemption (excluding the warrants issued to Oriental Holdings Limited and the warrants
issued to Chardan Capital Markets, LLC), in whole and not in part, at a price of $0.01 per warrant:
●
at any time while the Existing Warrants are exercisable;
●
upon not less than 30 days'
    prior written notice of redemption to each Existing Warrant holder;
●
if, and only if, the reported
    last sale price of the Class A ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a 30 trading day
    period ending on the third business day prior to the notice of redemption to Existing Warrant holders; and
●
if, and only if, (i) there
    is a current registration statement in effect with respect to the Class A ordinary shares underlying such Existing Warrants at the
    time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of
    redemption, or (ii) the cashless exercise of the Existing Warrants pursuant to the Warrant Agreement is exempt from the registration
    requirements under the Securities Act.
The
right to exercise will be forfeited unless the Existing Warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of an Existing Warrant will have no further rights except to receive the redemption
price for such holder's warrant upon surrender of such warrant.
If
we call the Existing Warrants for redemption as described above, our management will have the option to require all holders that wish
to exercise Existing Warrants to do so on a "cashless basis." In such event, each holder would pay the exercise price by
surrendering the whole Warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product
of the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the Existing
Warrants and the "fair market value" (defined below) by (y) the fair market value. The "fair market value" shall
mean the volume weighted average price of the Class A ordinary shares for the 20 trading days ending on the third trading day prior to
the date on which the notice of redemption is sent to the holders of Existing Warrants.
Our
redemption rights provided under the Warrant Agreement apply only to outstanding Existing Warrants (excluding the warrants issued to
Oriental Holdings Limited and the warrants issued to Chardan Capital Markets, LLC). To the extent a person holds rights to purchase Existing
Warrants, such purchase rights shall not be extinguished by redemption. However, once such purchase rights are exercised, we may redeem
the Existing Warrants issued upon such exercise provided that the criteria for redemption is met.
The
Existing Warrants were and will be issued in registered form under the Warrant Agreement. The Warrant Agreement provides that the terms
of the Existing Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but
requires the approval, by written consent or vote, of the holders of a majority of the then outstanding Existing Warrants in order to
make any change that adversely affects the interests of the registered holders in any material respect.
The
exercise price and number of Class A ordinary shares issuable on exercise of the Existing Warrants may be adjusted in certain circumstances
including in the event of a share capitalizations, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.
The
Existing Warrants may be exercised upon surrender of the Existing Warrants on or prior to the expiration date at the offices of the warrant
agent with the subscription form, as set forth in the Existing Warrants, duly executed, accompanied by full payment of the exercise price,
by certified or official bank check payable to us, for the number of Existing Warrants being exercised. The Existing Warrant holders
do not have the rights or privileges of holders of Class A ordinary shares and any voting rights until they exercise their Existing Warrants
and receive Class A ordinary shares. After the issuance of Class A ordinary shares upon exercise of the warrants, each holder will be
entitled to one vote for each share held of record on all matters to be voted on by shareholders.
120
Except
as described above, no Existing Warrants will be exercisable and we will not be obligated to issue Class A ordinary shares unless at
the time a holder seeks to exercise such warrant, a prospectus relating to the Class A ordinary shares issuable upon exercise of the
Warrants is current and the Class A ordinary shares have been registered or qualified or deemed to be exempt under the securities laws
of the state of residence of the holder of the Existing Warrants. Under the terms of the Warrant Agreement, we have agreed to use our
best efforts to meet these conditions and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise
of the Existing Warrants until the expiration of the Existing Warrants. However, we cannot assure you that we will be able to do so and,
if the prospectus relating to the Class A ordinary shares issuable upon the exercise of the Warrants is not current or if the Class A
ordinary shares is not qualified or exempt from qualification in the jurisdictions in which the holders of the Existing Warrants reside,
we will not be required to net cash settle or cash settle the Existing Warrant exercise, the Existing Warrants may have no value, the
market for the warrants may be limited and the warrants may expire worthless.
Warrant
holders may elect to be subject to a restriction on the exercise of their Existing Warrants such that an electing Warrant holder (and
his, her or its affiliates) would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such
holder (and his, her or its affiliates) would beneficially own in excess of 9.8% of the Class A ordinary shares issued and outstanding.
No
fractional shares will be issued upon exercise of the Existing Warrants. If, upon exercise of the Existing Warrants, a holder would be
entitled to receive a fractional interest in a share, issue or cause to be issued only the largest whole number of Class A ordinary shares
issuable on such exercise (and such fraction of a Class A ordinary share will be disregarded); provided, that if more than one Existing
Warrant certificate is presented for exercise at the same time by the same registered holder, the number of whole Class A ordinary shares
which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Class A ordinary shares issuable
on exercise of all such Existing Warrants.
The
Existing Warrants are traded on the over-the-counter markets under the symbol "SJOYW".
Key
Provisions of Our Memorandum and Articles of Association and British Virgin Islands Laws Affecting Our Ordinary Shares or Corporate Governance
The
following are summaries of material terms and provisions of our Memorandum and Articles of Association and the BVI Act, insofar as they
relate to the material terms of our Class A and Class B ordinary shares or corporate governance. This summary is not intended to be complete,
and you should read our Memorandum and Articles of Association.
Voting
Rights
We
have two classes of ordinary shares, namely, Class A ordinary shares and Class B ordinary shares. Both the Class A ordinary shares and
the Class B ordinary shares will have the same rights except that the Class B ordinary shares will have weighted voting rights. Each
Class B ordinary share shall have ten votes at a meeting of the shareholders or on any resolution of shareholders whereas each Class
A ordinary share shall only have one vote. Each outstanding Class B ordinary share is convertible at any time at the option of the holder
into one Class A ordinary share.
Under
the BVI Act, the ordinary shares are deemed to be issued when the name of the shareholder is entered in our register of members. Our
register of members is maintained by our transfer agent, Continental Stock Transfer & Trust Company, which will enter the name of
our shareholders in our register of members. If (a) information that is required to be entered in the register of shareholders is omitted
from the register or is inaccurately entered in the register, or (b) there is unreasonable delay in entering information in the register,
a shareholder of ours, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands courts
for an order that the register be rectified, and the court may either refuse the application or order the rectification of the register,
and may direct us to pay all costs of the application and any damages the applicant may have sustained.
Subject
to any rights or restrictions attached to any shares, at any general meeting on a show of hands every Class A ordinary shareholder who
is present in person (or, in the case of a shareholder being a corporation, by its duly authorized representative) or by proxy will have
one vote for each Class A ordinary share held on all matters to be voted on by shareholders. Subject to any rights or restrictions attached
to any shares, at any general meeting on a show of hands every Class B ordinary shareholder who is present in person (or, in the case
of a shareholder being a corporation, by its duly authorized representative) or by proxy will have ten votes for each Class B ordinary
share held on all matters to be voted on by shareholders. Voting at any meeting of the ordinary shareholders is by show of hands unless
a poll is demanded. A poll may be demanded by shareholders present in person or by proxy if the shareholder disputes the outcome of the
vote on a proposed resolution and the chairman shall cause a poll to be taken.
121
There
is nothing under the laws of the British Virgin Islands, which specifically prohibits or restricts the creation of cumulative voting
rights for the election of our directors, but cumulative voting for the election of directors is permitted only if expressly provided
for in a BVI company's memorandum or articles of association. We have not made provisions in our Memorandum and Articles of Association
for cumulative voting for such elections.
Under
British Virgin Islands laws, the voting rights of shareholders are regulated by our Memorandum and Articles of Association and, in certain
circumstances, the BVI Act. Our Memorandum and Articles of Association govern matters such as quorum for the transaction of business,
rights of shares, and majority votes required to approve any action or resolution at a meeting of the shareholders or board of directors.
Unless our Memorandum and Articles of Association otherwise provide, the requisite majority is usually a simple majority of votes cast.
Dividend
Rights
Each
ordinary share (including both Class A ordinary shares and Class B ordinary shares) is entitled to an equal share in any dividend paid
by the Company. The Articles of Association provide that the directors of the Company may authorize a distribution (including a dividend)
at a time and of an amount they think fit if they are satisfied that immediately after the distribution (or dividend) the value of the
Company's assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.
Preemption
Rights
British
Virgin Islands laws do not make a distinction between public and private companies and some of the protections and safeguards (such as
statutory preemption rights, save to the extent that they are expressly provided for in our Memorandum and Articles of Association) that
investors may expect to find in relation to a public company are not provided for under British Virgin Islands laws. There are no preemption
rights applicable to the issuance of new shares under either British Virgin Islands laws or our Memorandum and Articles of Association.
Liquidation
Rights
We
may by resolution of shareholders or, subject to section 199(2) of the BVI Act, by resolution of directors appoint a voluntary liquidator.
Transfer
of Shares
Any
shareholder may transfer all or any of his shares by an instrument of transfer provided that such transfer complies with applicable rules
of the SEC and federal and state securities laws of the United States. The instrument of transfer of any share shall be in writing in
the usual or common form or in a form prescribed by the Designated Stock Exchange (such as NASDAQ Capital Market) or in any other form
approved by the directors.
Share
Repurchases and Redemptions
As
permitted by the BVI Act and our Memorandum and Articles of Association, shares may be repurchased, redeemed or otherwise acquired by
us. In addition, our directors must determine that, immediately following the redemption or repurchase, we will be able to pay our debts
as they fall due and that the value of our assets will exceed our liabilities.
Share
Redesignation, Reclassification or Conversion
As
permitted by the BVI Act and our Memorandum and Articles of Association, a Shareholder holding Class B Ordinary Shares may at any time
require the Company to convert all or a portion of the Class B Ordinary Shares held by that Shareholder for Class A Ordinary Shares.
The Company may redesignate, reclassify or convert all or a portion of: (a) the Ordinary Shares held by a Shareholder into Class A Ordinary
Shares; and (b) the Ordinary Shares held by a Shareholder into Class B Ordinary Shares with the consent of that Shareholder by Resolution
of Shareholders.
Board
of Directors
We
are managed by a Board which currently consists of seven directors. Our Memorandum and Articles of Association provide that the minimum
number of directors shall be two and there shall be no maximum number of directors. The term of the directors are two years.
122
The
directors may by Resolution of Directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and
to secure indebtedness, liabilities or obligations whether of the Company or of any third party. There are no share ownership qualifications
for directors.
Meetings
of our Board may be convened at any time deemed necessary by any of our directors.
A
meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate
not less than one-half of the total number of directors, unless there are only 2 directors in which case the quorum is 2.
The
directors may, by Resolution of Directors, fix the emoluments of directors with respect to services to be rendered in any capacity to
the Company.
We
do not have any age limitations for our directors, nor do we have mandatory retirement as a result of reaching a certain age.
Meetings
of Shareholders
Any
of our directors of may convene meetings of the shareholders at such times and in such manner and places within or outside the British
Virgin Islands as the director considers necessary or desirable.
Upon
the written request of shareholders entitled to exercise 30 percent or more of the voting rights in respect of the matter for which the
meeting is requested the directors shall convene a meeting of shareholders.
Subject
to our Memorandum and Articles of Association, the director convening a meeting of members shall give not less than 7 days' written
notice of such meeting to: (a) those members whose names on the date the notice is given appear as members in the share register of the
Company and are entitled to vote at the meeting; and (b) the other directors.
A
meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90% of the
total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence
of a shareholder at the meeting shall constitute a waiver in relation to all the shares which that shareholder holds.
A
meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less
than 50% of the votes of the shares entitled to vote at the meeting. A quorum may be comprised of a single shareholder or proxy and then
such person may pass a resolution of shareholders and a certificate signed by such person accompanied where such person is a proxy by
a copy of the proxy instrument shall constitute a valid resolution of shareholders.
Differences
in Corporate Law
We
were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware
and the British Virgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt a
memorandum and articles of association that will provide shareholders with rights that do not vary in any material respect from those
they would enjoy if we were incorporated under Delaware law. Set forth below is a summary of some of the differences between provisions
of the BVI Act applicable to us and the laws applicable to companies incorporated in Delaware and their shareholders.
Director's
Fiduciary Duties
Under
Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty
has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care
that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and
disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires
that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate
position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation
and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by
the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and
in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by
evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director
must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
123
British
Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties,
shall act honestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the
director shall exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into
account the nature of the company, the nature of the decision and the position of the director and his responsibilities. In addition,
British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose and shall not act, or
agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum and articles of association of
the company.
Amendment
of Governing Documents
Under
Delaware corporate law, with very limited exceptions, a vote of the shareholders of a corporation is required to amend the certificate
of incorporation. In addition, Delaware corporate law provides that shareholders have the right to amend the corporation's bylaws,
but the certificate of incorporation may confer such right on the directors of the corporation.
Our
Memorandum and Articles of Association can generally be amended by with the approval of the holders of a majority of our outstanding
ordinary shares or by a resolution of the board of directors. In addition, pursuant to our Memorandum and Articles of Association, our
board of directors may amend our Memorandum and Articles of Association by a resolution of directors without a requirement for a resolution
of shareholders so long as the amendment does not:
●
restrict the rights or
    powers of the shareholders to amend our Memorandum and Articles of Association;
●
change the percentage of
    shareholders required to pass a resolution of shareholders to amend our Memorandum and Articles of Association; or
●
amend our Memorandum and
    Articles of Association in circumstances where it cannot be amended by the shareholders;
●
certain provisions that
    our Memorandum and Articles of Association specifies cannot be amended.
Written
Consent of Directors
Under
Delaware corporate law, a written consent of the directors must be unanimous to take effect. Under British Virgin Islands law and our
Memorandum and Articles of Association, only a majority of the directors are required to sign a written consent.
Written
Consent of Shareholders
Under
Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special
meeting of shareholders of a corporation may be taken by written consent of the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to take that action at a meeting at which all shareholders entitled to vote were present
and voted. As permitted by British Virgin Islands law, our Memorandum and Articles of Association provides that a resolution of shareholders
can be consented to in writing by a majority of in excess of 50 percent of the votes of ordinary shares entitled to vote thereon.
Shareholder
Proposals
Under
Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies
with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person
authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands
law and our Memorandum and Articles of Association provide that our directors shall call a meeting of the shareholders if requested in
writing to do so by shareholders entitled to exercise at least 30% of the voting rights in respect of the matter for which the meeting
is requested.
Dissolution;
Winding Up
Under
Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders
holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved
by a simple majority of the corporation's outstanding shares. Delaware corporate law allows a Delaware corporation to include in
its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. As permitted
by British Virgin Islands law and our Memorandum and Articles of Association, we may by resolution of shareholders or, subject to section
199(2) of the BVI Act, by resolution of directors appoint a voluntary liquidator.
124
Redemption
of Shares
Under
Delaware corporate law, any stock may be made subject to redemption by the corporation at its option, at the option of the holders of
that stock or upon the happening of a specified event, provided shares with full voting power remain outstanding. The stock may be made
redeemable for cash, property or rights, as specified in the certificate of incorporation or in the resolution of the board of directors
providing for the issue of the stock. As permitted by British Virgin Islands law and our Memorandum and Articles of Association, shares
may be repurchased, redeemed or otherwise acquired by us. However, the consent of the shareholder whose shares are to be repurchased,
redeemed or otherwise acquired must be obtained, except as specified in the terms of the applicable class or series of shares or as described
under "—Compulsory Acquisition" below. In addition, our directors must determine that, immediately following the redemption
or repurchase, we will be able to pay our debts as they fall due and that the value of our assets will exceed our liabilities.
Compulsory
Acquisition
Under
Delaware General Corporation Law § 253, in a process known as a "short form" merger, a corporation that owns at least
90% of the outstanding shares of each class of stock of another corporation may either merge the other corporation into itself and assume
all of its obligations or merge itself into the other corporation by executing, acknowledging and filing with the Delaware Secretary
of State a certificate of such ownership and merger setting forth a copy of the resolution of its board of directors authorizing such
merger. If the parent corporation is a Delaware corporation that is not the surviving corporation, the merger also must be approved by
a majority of the outstanding stock of the parent corporation. If the parent corporation does not own all of the stock of the subsidiary
corporation immediately prior to the merger, the minority shareholders of the subsidiary corporation party to the merger may have appraisal
rights as set forth in § 262 of the Delaware General Corporation Law.
Under
the BVI Act, subject to any limitations in a company's memorandum and articles of association, members holding 90% of the votes
of the outstanding shares entitled to vote, and members holding 90% of the votes of the outstanding shares of each class of shares entitled
to vote, may give a written instruction to the company directing the company to redeem the shares held by the remaining members. Upon
receipt of such written instruction, the company shall redeem the shares specified in the written instruction, irrespective of whether
or not the shares are by their terms redeemable. The company shall give written notice to each member whose shares are to be redeemed
stating the redemption price and the manner in which the redemption is to be effected. A member whose shares are to be so redeemed is
entitled to dissent from such redemption and to be paid the fair value of his shares, as described under "—Shareholders'
Rights under British Virgin Islands Law Generally" below.
Variation
of Rights of Shares
Under
Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares
of that class, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law and our Memorandum
and Articles of Association, if at any time the Shares are divided into different classes, the rights attached to any class may only
be varied, whether or not the Company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the
holders of not less than 50 percent of the voting rights in that class.
Election
of Directors
Under
Delaware corporate law, unless otherwise specified in the certificate of incorporation or bylaws of a corporation, directors are elected
by a plurality of the votes of the shares entitled to vote on the election of directors. As permitted by British Virgin Islands law,
and pursuant to our Memorandum and Articles of Association, our first directors shall be appointed by the first registered agent within
6 months of the date of incorporation; and thereafter, the directors shall be elected by resolution of shareholders or, where permitted
by our Memorandum and Articles of Association, by resolution of directors.
Removal
of Directors
Under
Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority
of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Similarly, as permitted by British
Virgin Islands law, our Memorandum and Articles of Association provides that directors may be removed from office, (a) with or without
cause, by resolution of shareholders passed at a meeting of shareholders called for the purposes of removing the director or for purposes
including the removal of the director or by a written resolution passed by at least 50 percent of the votes of the shareholders of the
Company entitled to vote, or (b) with cause, by Resolution of Directors passed at a meeting of directors called for the purpose of removing
the director or for purposes including the removal of the director.
125
Mergers
Under
Delaware corporate law, one or more constituent corporations may merge into and become part of another constituent corporation in a process
known as a merger. A Delaware corporation may merge with a foreign corporation as long as the law of the foreign jurisdiction permits
such a merger. To effect a merger under Delaware General Corporation Law § 251, an agreement of merger must be properly adopted
and the agreement of merger or a certificate of merger must be filed with the Delaware Secretary of State. In order to be properly adopted,
the agreement of merger must be adopted by the board of directors of each constituent corporation by a resolution or unanimous written
consent. In addition, the agreement of merger generally must be approved at a meeting of shareholders of each constituent corporation
by a majority of the outstanding stock of the corporation entitled to vote, unless the certificate of incorporation provides for a supermajority
vote. In general, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation or corporations
as a result of the merger.
Under
the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of
two or more constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent
companies into a new company. In order to merge or consolidate, the directors of each constituent company must approve a written plan
of merger or consolidation, which must be authorized by a resolution of shareholders. One or more companies may also merge or consolidate
with one or more companies incorporated under the laws of jurisdictions outside the British Virgin Islands if the merger or consolidation
is permitted by the laws of the jurisdictions in which the companies incorporated outside the British Virgin Islands are incorporated.
In respect of such a merger or consolidation, a British Virgin Islands company is required to comply with the provisions of the BVI Act,
and a company incorporated outside the British Virgin Islands is required to comply with the laws of its jurisdiction of incorporation.
Shareholders
not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation
contains any provision that, if proposed as an amendment to the memorandum and articles of association, would entitle them to vote as
a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation
irrespective of whether they are entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or
consolidation.
Inspection
of Books and Records
Under
Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation's
stock ledger, list of shareholders and other books and records. Under British Virgin Islands law, members of the general public, on payment
of a nominal fee, can obtain copies of the public records of a company available at the office of the British Virgin Islands Registrar
of Corporate Affairs, including the company's certificate of incorporation, its memorandum and articles of association (with any
amendments), records of license fees paid to date, any articles of dissolution, any articles of merger and a register of charges if the
company has elected to file such a register.
A
shareholder of a company is entitled, on giving written notice to the company, to inspect:
a)
the memorandum and articles of association;
b)
the register of members;
c)
the register of directors; and
d)
the minutes of meetings
    and resolutions of shareholders and of those classes of shares of which he is a shareholder.
In
addition, a shareholder may make copies of or take extracts from the documents and records referred to in (a) through (d) above.
However, subject to the memorandum and articles of association of the company, the directors may, if they are satisfied that it would
be contrary to the company's interests to allow a shareholder to inspect any document, or part of any document, specified in (b),
(c) or (d) above, refuse to permit the shareholder to inspect the document or limit the inspection of the document, including
limiting the making of copies or the taking of extracts from the records. Where a company fails or refuses to permit a shareholder to
inspect a document or permits a shareholder to inspect a document subject to limitations, that shareholder may apply to the court for
an order that he should be permitted to inspect the document or to inspect the document without limitation.
126
Where
a company keeps a copy of the register of members or the register of directors at the office of its registered agent, it is required
to notify the registered agent of any changes to the originals of such registers, in writing, within 15 days of any change; and to provide
the registered agent with a written record of the physical address of the place or places at which the original register of members or
the original register of directors is kept. Where the place at which the original register of members or the original register of directors
is changed, the company is required to provide the registered agent with the physical address of the new location of the records within
14 days of the change of location.
A
company is also required to keep at the office of its registered agent or at such other place or places, within or outside the British
Virgin Islands, as the directors determine the minutes of meetings and resolutions of shareholders and of classes of shareholders, and
the minutes of meetings and resolutions of directors and committees of directors. If such records are kept at a place other than at the
office of the company's registered agent, the company is required to provide the registered agent with a written record of the
physical address of the place or places at which the records are kept and to notify the registered agent, within 14 days, of the physical
address of any new location where such records may be kept.
Conflict
of Interest
Under
Delaware corporate law, a contract between a corporation and a director or officer, or between a corporation and any other organization
in which a director or officer has a financial interest, is not void as long as (i) the material facts as to the director's
or officer's relationship or interest are disclosed or known and (ii) either a majority of the disinterested directors authorizes
the contract in good faith or the shareholders vote in good faith to approve the contract. Nor will any such contract be void if it is
fair to the corporation when it is authorized, approved or ratified by the board of directors, a committee or the shareholders.
The
BVI Act provides that a director shall, forthwith after becoming aware that he is interested in a transaction entered into or to be entered
into by the company, disclose that interest to the board of directors of the company. The failure of a director to disclose that interest
does not affect the validity of a transaction entered into by the director or the company, so long as the director's interest was
disclosed to the board prior to the company's entry into the transaction or was not required to be disclosed because the transaction
is between the company and the director himself and is otherwise in the ordinary course of business and on usual terms and conditions.
As permitted by British Virgin Islands laws and our Memorandum and Articles of Association, a director interested in a particular transaction
may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction, and subject
to compliance with the BVI Act shall not, by reason of his office be accountable to us for any benefit which he derives from such transaction
and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.
Transactions
with Interested Shareholders
Delaware
corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has
specifically elected not to be governed by that statute by amendment to its certificate of incorporation, it is prohibited from engaging
in certain business combinations with an "interested shareholder" for three years following the date that the person becomes
an interested shareholder. An interested shareholder generally is a person or group that owns or owned 15% or more of the company's
outstanding voting stock within the past three years. This statute has the effect of limiting the ability of a potential acquirer to
make a two-tiered bid for the company in which all shareholders would not be treated equally. The statute does not apply if, among other
things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business
combination or the transaction that resulted in the person becoming an interested shareholder.
British
Virgin Islands law has no comparable provision. However, although British Virgin Islands law does not regulate transactions between a
company and its significant shareholders, it does provide that these transactions must be entered into in the bona fide best interests
of the company and not with the effect of constituting a fraud on the minority shareholders.
Independent
Directors
There
are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.
Cumulative
Voting
Under
Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company's certificate of incorporation
specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors
since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases
the shareholder's voting power with respect to electing such director. There are no prohibitions on cumulative voting under the
laws of the British Virgin Islands, but our Memorandum and Articles of Association does not provide for cumulative voting.
127
Shareholders'
Rights under British Virgin Islands Law Generally
The
BVI Act provides for certain remedies that may be available to shareholders. Where a company incorporated under the BVI Act or any of
its directors engages in, or proposes to engage in, conduct that contravenes the BVI Act or the company's memorandum and articles
of association, British Virgin Islands courts can issue a restraining or compliance order. However, shareholders can also bring derivative,
personal and representative actions under certain circumstances. The traditional English basis for members' remedies has also been
incorporated into the BVI Act: where a shareholder of a company considers that the affairs of the company have been, are being or are
likely to be conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the
court for an order based on such conduct. In addition, any shareholder of a company may apply to the courts for the appointment of a
liquidator of the company and the court may appoint a liquidator of the company if it is of the opinion that it is just and equitable
to do so.
The
BVI Act also provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any
of the following: (i) a merger, if the company is a constituent company, unless the company is the surviving company and the member
continues to hold the same or similar shares; (ii) a consolidation, if the company is a constituent company; (iii) any sale,
transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the
usual or regular course of the business carried on by the company but not including (a) a disposition pursuant to an order of the
court having jurisdiction in the matter, (b) a disposition for money on terms requiring all or substantially all net proceeds to
be distributed to the shareholders in accordance with their respective interest within one year after the date of disposition, or (c) a
transfer pursuant to the power of the directors to transfer assets for the protection thereof; (iv) a redemption of 10% or fewer
of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the
BVI Act; and (v) an arrangement, if permitted by the court.
Generally,
any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the British
Virgin Islands or their individual rights as shareholders as established by a company's memorandum and articles of association.
Rights
of Non-resident or Foreign Shareholders and Disclosure of Substantial Shareholdings
There
are no limitations imposed by our amended and restated memorandum and articles of association on the rights of non-resident or foreign
shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our amended and restated memorandum
and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Anti-Money
Laundering — British Virgin Islands
In
order to comply with legislation or regulations aimed at the prevention of money laundering we are required to adopt and maintain anti-money
laundering procedures, and may require subscribers or transferees to provide evidence to verify their identity. Where permitted, and
subject to certain conditions, we also may delegate the maintenance of our anti-money laundering procedures (including the acquisition
of due diligence information) to a suitable person.
We
reserve the right to request such information as is necessary to verify the identity of a subscriber or transferee. In the event of delay
or failure on the part of the subscriber or transferee in producing any information required for verification purposes, we may refuse
to accept the application, in which case any funds received will be returned without interest to the account from which they were originally
debited or refuse to amend the register of members to reflect the transferee's ownership of the relevant shares.
If
any person resident in the British Virgin Islands knows or suspects that another person is engaged in money laundering or terrorist financing
and the information for that knowledge or suspicion came to their attention in the course of their business the person will be required
to report his belief or suspicion to the Financial Investigation Agency of the British Virgin Islands, pursuant to the Proceeds of Criminal
Conduct Act 1997 (as amended). Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure
of information imposed by any enactment or otherwise.
Exchange
Controls
No
laws of the British Virgin Islands, decrees, regulations or other legislation that limit the import or export of capital or the payment
of dividends to shareholders who do not reside in the British Virgin Islands.
128
Our
Transfer Agent
The
transfer agent for our securities is Continental Stock Transfer & Trust Company.
Listing
Our
Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "SJ".
C.
Material Contracts
We
have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item
4. Information on the Company", "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions,"
or elsewhere in this annual report on Form 20-F.
D.
Exchange Controls
No
laws of the British Virgin Islands, decrees, regulations or other legislation that limit the import or export of capital or the payment
of dividends to shareholders who do not reside in the British Virgin Islands.
E.
Taxation
The
following discussion of material British Virgin Islands, PRC, and United States federal income tax consequences of an investment in our
Class A ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this report, all of which
are subject to change. This discussion does not deal with all possible tax consequences relating to an investment in our Class A ordinary
shares, such as the tax consequences under state, local, and other tax laws.
WE
URGE POTENTIAL PURCHASERS OF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL,
AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A ORDINARY SHARES.
People's
Republic of China Taxation
We
are a holding company incorporated in the British Virgin Islands and we gain substantial income by way of dividends paid to us from our
PRC subsidiaries. The PRC Enterprise Income Tax Law and its implementation rules (the "EIT Law") provide that PRC-sourced
income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will
normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor's jurisdiction of incorporation has
a tax treaty with China that provides for a preferential tax rate or a tax exemption.
Under
the EIT Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident
enterprise," which means that it is treated in a manner similar to a PRC domestic enterprise for enterprise income tax purposes.
Although the implementation rules of the EIT Law define "de facto management body" as a managing body that actually, comprehensively
manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance
for this definition currently available is set forth in SAT Circular 82, which provides guidance on the determination of the tax residence
status of a PRC-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign
country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although the Company does
not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a PRC-controlled offshore incorporated
enterprise within the meaning of SAT Circular 82, in the absence of guidance specifically applicable to us, we have applied the guidance
set forth in SAT Circular 82 to evaluate the tax residence status of the Company and its subsidiaries organized outside of China.
According
to SAT Circular 82, a PRC-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a "de
facto management body" in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following
criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production,
operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions
(such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and
salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property,
accounting books, corporate seal, the board of directors and files of the minutes of shareholders' meetings of the enterprise are
located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the
right to vote habitually reside within the territory of China.
129
We
believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, the key assets and records
of the Company, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our
shareholders, are located and maintained outside China. In addition, we are not aware of any offshore holding companies with a corporate
structure similar to ours that has been deemed a PRC "resident enterprise" by the PRC tax authorities. Accordingly, we believe
that the Company and its offshore subsidiary should not be treated as a "resident enterprise" for PRC tax purposes if the
criteria for "de facto management body" as set forth in SAT Circular 82 were deemed applicable to us. As the tax residency
status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation
of the term "de facto management body" as applicable to our offshore entities, however, we will continue to monitor our tax
status.
If
the PRC tax authorities determine that the Company is a PRC resident enterprise for enterprise income tax purposes, we may be required
to withhold a 10% withholding tax from any dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident
enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Class A
Ordinary Shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders
would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined
to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally
apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. It is also unclear, however, whether non-PRC
shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC
in the event that the Company is treated as a PRC resident enterprise. There is no guidance from the PRC government to indicate whether
or not any tax treaties between the PRC and other countries would apply in circumstances where a non-PRC company was deemed to be a PRC
tax resident, and thus there is no basis for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.
Provided
that the Company is not deemed to be a PRC resident enterprise, holders of our Class A Ordinary Shares who are not PRC residents will
not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our shares. However,
under SAT Bulletin 7, where a non-resident enterprise conducts an "indirect transfer" by transferring taxable assets, including,
in particular, equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding
company, the non-resident enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets
may report to the relevant tax authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority
may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose
of reducing, avoiding, or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes,
currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may
be at risk of being required to file a return and being taxed under SAT Bulletin 7, and we may be required to expend valuable resources
to comply with SAT Bulletin 7, or to establish that we should not be taxed under this Bulletin.
British
Virgin Islands Taxation
The
British Virgin Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and
there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied
by the Government of the British Virgin Islands except for stamp duties which may be applicable on instruments executed in, or after
execution brought within the jurisdiction of the British Virgin Islands. No stamp duty is payable in the British Virgin Islands on the
issue of shares by, or any transfers of shares of, British Virgin Islands companies (except those which hold interests in land in the
British Virgin Islands). The British Virgin Islands is not party to any double tax treaties that are applicable to any payments made
to or by the Company. There are no exchange control regulations or currency restrictions in the British Virgin Islands.
Payments
of dividends and capital in respect of our Class A Ordinary Shares will not be subject to taxation in the British Virgin Islands and
no withholding will be required on the payment of a dividend or capital to any holder of our Class A Ordinary Shares, as the case may
be, nor will gains derived from the disposal of our Class A Ordinary Shares be subject to British Virgin Islands income or corporation
tax.
130
United
States Federal Income Taxation
The
following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Class A Ordinary
Shares. It is directed to U.S. Holders (as defined below) of our Class A Ordinary Shares and is based upon laws and relevant interpretations
thereof in effect as of the date of this report, all of which are subject to change. This description does not deal with all possible
tax consequences relating to ownership and disposition of our Class A Ordinary Shares or U.S. tax laws, other than the U.S. federal income
tax laws, such as the tax consequences under non-U.S. tax laws, estate and gift and state, local and other tax laws.
The
following brief description applies only to U.S. Holders (defined below) that hold Class A Ordinary Shares as capital assets and that
have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States
in effect as of the date of this report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this
report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities
are subject to change, which change could apply retroactively and could affect the tax consequences described below.
The
following does not address the tax consequences to investors that may be subject to special tax rules, including, without limitation,
the following:
●
banks,
●
financial institutions;
●
insurance companies;
●
regulated investment companies;
●
real estate investment
    trusts;
●
broker-dealers;
●
traders that elect to mark
    their securities to market;
●
U.S. expatriates;
●
governments or agencies
    or instrumentalities thereof;
●
tax-exempt entities;
●
persons liable for alternative
    minimum tax or the corporate alternative minimum tax;
●
persons holding our Class
    A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;
●
persons that actually or
    constructively own 10% or more of our voting power or value (including by reason of owning our Class A Ordinary Shares);
●
persons who acquired our
    Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;
●
persons holding our Class
    A Ordinary Shares through partnerships or other pass-through entities; or
●
beneficiaries of a Trust
    holding our Class A Ordinary Shares.
This
summary of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial owner of
Class A Ordinary Shares and you are, for U.S. federal income tax purposes,
●
an individual who is a
    citizen or resident of the United States;
●
a corporation (or other
    entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof
    or the District of Columbia;
●
an estate whose income
    is subject to U.S. federal income taxation regardless of its source; or
●
a trust that (1) is subject
    to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions
    or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
131
Taxation
of Dividends and Other Distributions on Our Class A Ordinary Shares
Subject
to the PFIC (defined below) rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary
Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on
the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits
(as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible
for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.
With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the preferential rate applicable
to qualified dividend income, provided that we are not a PFIC (defined below) for either our taxable year in which the dividend is paid
or the preceding taxable year, and certain holding period requirements are met. You are urged to consult your tax advisors regarding
the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change
in law after the date of this report.
Dividends
will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income
(as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will
be adjusted pursuant to a formula provided in applicable Treasury regulation. The limitation on foreign taxes eligible for credit is
calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class
A Ordinary Shares will constitute "passive category income" but could, in the case of certain U.S. Holders, constitute "general
category income."
To
the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal
income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent
the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings
and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a
dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described
above.
Taxation
of Dispositions of Class A Ordinary Shares
Subject
to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange, or other
taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis
(in U.S. dollars) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder,
including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible
for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally
be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability
of foreign tax credits.
Passive
Foreign Investment Company ("PFIC")
A
non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:
●
at least 75% of its gross
    income for such taxable year is passive income; or
●
at least 50% of the value
    of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce
    or are held for the production of passive income (the "asset test").
Passive
income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets
and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by
value) of the stock.
Based
on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. We must make
a separate determination each year as to whether we are a PFIC, however, and there can be no assurance with respect to our status as
a PFIC for our current taxable year or any future taxable year. Depending on the amount of our cash and other assets held for the production
of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets
may be assets held for the production of passive income. In addition, because the value of our assets for purposes of the asset test
will generally be determined based on the market price of our Class A Ordinary Shares and because cash is generally considered to be
an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Class A Ordinary
Shares. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. We are under no obligation
to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets
will depend upon material facts (including the market price of our Class A Ordinary Shares from time to time) that may not be within
our control. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for
all succeeding years during which you hold Class A Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely
"mark-to-market" election as described below, however, you may avoid some of the adverse effects of the PFIC regime by making
a "purging election" (as described below) with respect to the Class A Ordinary Shares.
132
If
we are a PFIC for your taxable year(s) during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect
to any "excess distribution" that you receive and any gain you realize from a sale or other disposition (including a pledge)
of the Class A Ordinary Shares, unless you make a "mark-to-market" election as discussed below. Distributions you receive
in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding
taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax
rules:
●
the excess distribution
    or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;
●
the amount allocated to
    your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were
    a PFIC, will be treated as ordinary income, and
●
the amount allocated to
    each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally
    applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
The
tax liability for amounts allocated to years prior to the year of disposition or "excess distribution" cannot be offset by
any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated
as capital, even if you hold the Class A Ordinary Shares as capital assets.
A
U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the
US Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for
the first taxable year in which you hold (or are deemed to hold) Class A Ordinary Shares and for which we are determined to be a PFIC,
you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares
as of the close of such taxable year over your adjusted basis in such Class A Ordinary Shares, and such excess will be treated as ordinary
income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Class A Ordinary Shares
over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any
net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income
under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated
as ordinary income. Class A Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Class
A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such
Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you
make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions
by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under "—Taxation
of Dividends and Other Distributions on our Class A Ordinary Shares" generally would not apply.
The
mark-to-market election is available only for "marketable stock", which is stock that is traded in other than de minimis
quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market
(as defined in applicable U.S. Treasury regulations), including Nasdaq Stock Market. If the Class A Ordinary Shares are regularly traded
on Nasdaq Stock Market and if you are a holder of Class A Ordinary Shares, the mark-to-market election would be available to you were
we to be or become a PFIC.
Alternatively,
a U.S. Holder of stock in a PFIC may make a "qualified electing fund" election under Section 1295(b) of the US Internal Revenue
Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing
fund election with respect to a PFIC will generally include in gross income for a taxable year such holder's pro rata share of
the corporation's earnings and profits for the taxable year. The qualified electing fund election, however, is available only if
such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury
regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund
election. If you hold Class A Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal
Revenue Service Form 8621 in each such year and provide certain annual information regarding such Class A Ordinary Shares, including
regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares.
If
you do not make a timely "mark-to-market" election (as described above), and if we were a PFIC at any time during the period
you hold our Class A Ordinary Shares, then such Class A Ordinary Shares will continue to be treated as stock of a PFIC with respect to
you even if we cease to be a PFIC in a future year, unless you make a "purging election" for the year we cease to be a PFIC.
A "purging election" creates a deemed sale of such Class A Ordinary Shares at their fair market value on the last day of
the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest
charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new
basis (equal to the fair market value of the Class A Ordinary Shares on the last day of the last year in which we are treated as a PFIC)
and holding period (which new holding period will begin the day after such last day) in your Class A Ordinary Shares for tax purposes.
You
are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares
and the elections discussed above.
133
Information
Reporting and Backup Withholding
Dividend
payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares
may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406
of the US Internal Revenue Code at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes
a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who
is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such
certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application
of the U.S. information reporting and backup withholding rules.
Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability,
and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.
Transactions effected through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup
withholding), and such brokers or intermediaries may be required by law to withhold such taxes.
EACH
PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN INVESTMENT IN OUR CLASS A ORDINARY
SHARES IN LIGHT OF SUCH INVESTOR'S PARTICULAR CIRCUMSTANCES.
F.
Dividends and Paying
    Agents
Not
Applicable.
G.
Statement by Experts
Not
Applicable.
H.
Documents on Display
We
are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign
private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders,
and our executive officers, directors and principal shareholders are not subject to the insider short-swing profit disclosure and recovery
provisions of Section 16 of the Exchange Act.
All
information that we have filed with the SEC can be accessed through the SEC's website at www.sec.gov. This information can also
be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of the public reference rooms.
In
accordance with Nasdaq Stock Market Rule 5250(d), we will post this annual report on Form 20-F on our website at ir.scienjoy.com.
In addition, we will provide hard copies of our annual report free of charge to shareholders upon request.
I.
Subsidiary Information
Not
Applicable.
J.
Annual Report to Security
    Holders
Not
Applicable.
ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest
Rate Risk
The
Company's exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held
in interest bearing bank deposits. The Company has not used derivative financial instruments to manage its interest risk exposure. Interest
earning instruments carry a degree of interest rate risk. The Company has not been exposed to, nor does the Company anticipate being
exposed to, material risks due to changes in market interest rates.
Credit
Risk
Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents,
accounts receivable, other receivables included in prepaid expenses, other current assets, and amounts due from related parties. As of
December 31, 2021 and December 31, 2022, RMB238,792 and RMB
172,514
(US$
25,012
),
respectively, were deposited with major financial institutions located in the PRC. Management believes that these financial institutions
are of high credit quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese
banks are secure due to the state policy on protecting depositors' interests.
134
For
the credit risk related to accounts receivable, the Company performs ongoing credit evaluations of its customers. The Company establishes
an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific customers and other information.
The allowance amounts were immaterial for all periods presented.
Foreign
Currency Exchange Rate Risk
Substantially
all of the Company's businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994,
the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People's Bank
of China. However, the unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies.
All foreign exchange transactions continue to take place either through the People's Bank of China or other banks authorized to
buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China. Approval of foreign currency payments
by the People's Bank of China or other institutions requires submitting a payment application form together with suppliers'
invoices, shipping documents and signed contracts.
ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A.
Debt Securities
Not
Applicable.
B.
Warrants and Rights
Not
Applicable.
C.
Other Securities
Not
Applicable.
D.
American Depositary
    Shares
Not
Applicable.
135
PART
II
ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not
Applicable.
ITEM
15. CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
Under
the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we carried
out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) under the Exchange Act,
as of December 31, 2022. Based upon this evaluation, our management, with the participation of our chief executive officer and chief
financial officer, has concluded that our disclosure controls and procedures were effective in ensuring that the information required
to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the SEC's rules and forms, and that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and
chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management's
Annual Report on Internal Control over Financial Reporting
This
annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation
report by our independent registered public accounting firm due to a transition period established by rules of the SEC for newly
public companies.
Internal
Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the U.S. Exchange Act. As required by Rule 13a-15(c) of the U.S. Exchange Act™.
We have implemented and planned
to implement a number of measures to address the material weaknesses that has been identified in connection with the audit of our consolidated
financial statements for the year ended December 31, 2021. We have engaged an international consulting firm to assist us to improve
our internal control over financial reporting. We have allocated additional resources, including staff or external consultants with relevant
U.S. GAAP and SEC reporting experience, to improve financial oversight function, to introduce formal business performance review process,
and to prepare and review the consolidated financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting
requirements. In addition, we intend to conduct regular and continuous U.S. GAAP accounting and financial reporting training programs.
However,
we cannot assure you that all these measures will be sufficient to remediate our significant deficiencies in time, or at all. As we were
a privately owned company prior to listing, neither we nor our independent registered public accounting firm undertook a comprehensive
assessment of our internal control over financial reporting under the Sarbanes-Oxley Act for purposes of identifying and reporting any
material weakness or significant deficiency in our internal control over financial reporting. Had we performed a formal assessment of
our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal
control over financial reporting, additional control deficiencies may have been identified. See "Item 3. Key Information—D. Risk
Factors—Risks Related to Our Business—If we fail to implement and maintain an effective system of internal controls to remediate
our material weakness over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations
or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected."
As
a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an "emerging growth company"
pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are
otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under
Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company's internal control over financial
reporting.
Changes
in Internal Control over Financial Reporting
During
the period covered by this report, other than as described above, there have not been any changes in our internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
136
ITEM
16. [Reserved]
ITEM
16.A. AUDIT COMMITTEE FINANCIAL EXPERT
Our
board of directors has determined that each of Jian Sun, Huifeng Chang, and Yibing Liu, independent directors (under the standards set
forth in Nasdaq Stock Market Rule 5605(a)(2) and Rule 10A-3 under the Exchange Act) and members of our audit committee,
is an audit committee financial expert.
ITEM
16.B. CODE OF ETHICS
On
May 12, 2020 our Board adopted (a) an Amended and Restated Code of Conduct and Ethics (the "Code"), which amended and restated
our then existing code of conduct and ethics (the "Existing Code) in its entirety and applies to all officers, directors, and employees
of us and our subsidiaries, and (b) an Insider Trading Policy (the "Policy").
The
Existing Code was refreshed and updated in connection with the Business Combination to conform the Code to reflect current best practices
and enhance the personnel's understanding of our standards of ethical business practices, promote awareness of ethical issues that
may be encountered in carrying out an employee's or director's responsibilities, and improve its clarity as to how to address
ethical issues that may arise. The updates include clarifications and enhancements to the purposes of the Code, compliance with law matters,
policies regarding maintenance of our corporate records, and compliance standards and procedures of the Code. The adoption of the Code
did not relate to or result in any waiver, whether explicit or implicit, of any provision of the Existing Code.
The
Policy provides guidelines to employees, officers and directors of us and our subsidiaries with respect to transactions in our securities
and the procedures set forth therein is intended to help prevent insider trading and to assist the employees, officers and directors
of us and our subsidiaries in complying with their obligations under the federal securities laws.
ITEM
16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by Friedman LLP and OneStop Assurance PAC.
For the Year
Ended
December 31,
2022
Audit Fees(1)
428,000
Audit-related Fees(2)
30,560
Total
458,560
(1)
"Audit Fees"
    represent the aggregate fees billed for professional services rendered by our principal accountants for the audit of our consolidated
    financial statements and assistance with and review of documents filed with the SEC.
(2)
"Audit-Related Fees"
    represent the aggregate fees billed for professional services rendered by our principal accountants for the assurance and related
    services, which are not included under "Audit Fees" above
Pre-approval
Policies
The
Company's audit committee approves all auditing services and permitted non-audit services performed for the Company by its independent
auditor in advance of an engagement. All auditing services and permitted non-audit services (including the fees and terms thereof) to
be performed for the Company by its independent auditor must be approved by the audit committee in advance, subject to the de minimis
exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the committee prior to
the completion of the audit.
137
ITEM
16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not
Applicable
ITEM
16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM
16.F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
On
May 12, 2020 we dismissed Marcum LLP ("Marcum") as our independent registered public accounting firm. Effective May 12, 2020,
Friedman LLP ("Friedman") has been engaged as our new independent registered public accounting firm. The audit committee
of our board of directors (the "Audit Committee") approved the dismissal of Marcum and the engagement of Friedman as the
independent registered public accounting firm. Marcum served as the independent registered public accounting firm for us since May 2,
2018, our inception as Wealthbridge Acquisition Limited. Friedman previously served as the auditor for Scienjoy Inc. prior to the consummation
of the Business Combination and provided audit opinions in connection with Scienjoy Inc.'s consolidated financial statements for
the fiscal years ended December 31, 2019 and 2018.
Marcum's
report on our financial statements for the fiscal year ended December 31, 2019 and for the period from May 2, 2018 (inception) through
December 31, 2018 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty,
audit scope or accounting principles. During the period of Marcum's engagement and the subsequent interim period preceding Marcum's
dismissal, there were no disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make a reference
to the subject matter of the disagreement in connection with its reports covering such periods. In addition, no "reportable events,"
as defined in Item 304(a)(1)(v) of Regulation S-K, occurred within the period of Marcum's engagement and the subsequent interim
period preceding Marcum's dismissal. We have provided Marcum with a copy of the foregoing disclosures and Marcum has furnished
us with a letter addressed to the SEC, which is Exhibit 16.1 incorporated by reference to the 8-K form for May 2020 filed on May 13,
2020, stating it agrees with the statements made by us set forth above.
During
the period from May 2, 2018 (inception) through December 31, 2019 and the subsequent interim period preceding the engagement of Friedman,
neither we nor anyone on our behalf consulted with Friedman regarding either: (i) the application of accounting principles to a
specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements,
and neither a written report nor oral advice was provided to us that Friedman concluded was an important factor considered by us in reaching
a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a "disagreement"
or a "reportable event" (as described in Items 304(a)(1)(iv) and 304(a)(1)(v) of Regulation S-K, respectively).
On
April 19, 2022 we dismissed Friedman LLP ("Friedman") as our independent registered public accounting firm. Effective April
19, 2022, OneStop Assurance PAC ("OneStop") has been engaged as our new independent registered public accounting firm. The
audit committee of our board of directors (the "Audit Committee") approved the dismissal of Friedman and the engagement of
OneStop as the independent registered public accounting firm. Friedman served as the independent registered public accounting firm for
us since May 12, 2020.
Friedman's
report on our financial statements for the fiscal year ended December 31, 2020 and 2019 did not contain an adverse opinion or disclaimer
of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles. During the period of
Friedman's engagement and the subsequent interim period preceding Friedman's dismissal, there were no disagreements with
Friedman on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of Friedman, would have caused it to make a reference to the subject matter of the disagreement in
connection with its reports covering such periods. In addition, no "reportable events," as defined in 16F(a)(1)(v)(A) through
(D) of Form 20-F, occurred within the period of Friedman's engagement and the subsequent interim period preceding Friedman's
dismissal. We have provided Friedman with a copy of the foregoing disclosures and Friedman has furnished us with a letter addressed to
the SEC, which is attached hereto as Exhibit 16.2, incorporated by reference to the 6-K form for April 2022 filed on April 19, 2022,
stating it agrees with the statements made by us set forth above.
During
the Company's most recent two fiscal years and through the subsequent interim period on or prior to the appointment of the OneStop,
neither the Company nor anyone on its behalf has consulted with the OneStop on either (a) the application of accounting principles to
a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial
statements, or (b) any matter that was the subject of a disagreement, as that term is defined in Item 16F(a)(1)(iv) of Form 20-F (and
the related instructions thereto) or a reportable event as set forth in Item 16F(a)(1)(v)(A) through (D) of Form 20-F.
We
dismissed Friedman LLP ("Former Auditor") effective April 19, 2022 and that the Company has appointed OneStop Assurance PAC
(the "Successor Auditor") as successor auditor of the Company effective April 19, 2022 and for the fiscal year ended December
31, 2021.
138
ITEM
16.G. CORPORATE GOVERNANCE
Foreign
Private Issuer
As
a British Virgin Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Stock Market Rules corporate governance
listing standards. However, Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices
of its home country. Certain corporate governance practices in British Virgin Island, which is our home country, may differ significantly
from the Nasdaq Stock Market Rules. While we voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage
of the following exemptions afforded to foreign private issuers:
●
exemption from the requirement
    to obtain shareholder approval for certain issuances of securities, including shareholder approval of stock option plans; and
●
exemption from the requirement
    that our board of directors shall have regularly scheduled meetings at which only independent directors are present as set forth
    in Nasdaq Rule 5605(b)(2).
We
intend to follow our home country practices in lieu of the foregoing requirements. Although we may rely on home country corporate governance
practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), we must comply with Nasdaq's Notification
of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), the Diverse Board representation requirement (Rule
5605(f)), the Board Diversity disclosure rule (Rule 5606), have an audit committee that satisfies Rule 5605(c)(3), consisting of committee
members that meet the independence requirements of Rule 5605(c)(2)(A)(ii), and Rule 5000 series. Although we currently intend to comply
with the Nasdaq corporate governance rules applicable other than as noted above, we may in the future decide to use the foreign private
issuer exemption with respect to some or all the other Nasdaq corporate governance rules. As a result, our shareholders may be afforded
less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
We may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.
Controlled
Company
We
are "controlled company'' as defined under the Nasdaq Stock Market Rules because Heshine controls more than 50% of
our voting rights. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and will rely,
on certain exemptions from corporate governance rules, including:
●
an exemption from the rule
    that a majority of our board of directors must be independent directors;
●
an exemption from the rule
    that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and
●
an exemption from the rule
    that our director nominees must be selected or recommended solely by independent directors.
ITEM
16.H. MINE SAFETY DISCLOSURE
Not
Applicable.
ITEM
16.I. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS
Not
Applicable.
139
PART
III
ITEM
17. FINANCIAL STATEMENTS
We
have elected to provide financial statements pursuant to Item 18.
ITEM
18. FINANCIAL STATEMENTS
Our
consolidated financial statements are included at the end of this annual report.
ITEM
19. EXHIBITS
Exhibit
    No.
Description
1.1
Fourth Amended and Restated Memorandum and Articles of Association of Scienjoy Holding Corporation, as adopted by a special resolution on November 8, 2021 (incorporated by reference to Annex A to the Current Report on Form 6-K filed with the Securities & Exchange Commission on October 7, 2021).
2.1
Specimen Class A Ordinary Share Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form F-3 filed with the Securities and Exchange Commission on November 29, 2021).
2.2
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 21, 2018).
2.3
Warrant Agreement, dated February 5, 2019, by and between Continental Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
2.4*
Description of Securities.
4.1
Share Exchange Agreement dated October 28, 2019 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on November 01, 2019).
4.2
Form of Unit Purchase Option between the Registrant and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
4.3
Letter Agreements by and between the Registrant and each of the initial shareholders, officers and directors of the Registrant (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
4.4
Stock Escrow Agreement, dated February 5, 2019, among the Registrant, Continental Stock Transfer & Trust Company, LLC, and the initial shareholders (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
4.5
Registration Rights Agreement, dated February 5, 2019, among the Registrant, Continental Stock Transfer & Trust Company, LLC and the initial shareholders (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
4.6
Form of Subscription Agreement among the Registrant, the Initial Shareholders and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 filed with the Securities & Exchange Commission on December 21, 2018)
4.7
Investment Management Trust Account Agreement, dated February 5, 2019, by and between Continental Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
4.8
Form of Director Service Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.9
Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Xiaowu He, dated May 1, 2019 (English Translation) (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.10
Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Bo Wan, dated February 8, 2020 (English Translation) (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
140
4.11
Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Pei Lu, dated January 10, 2012(English Translation) (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.12
Employment Agreement between Beijing Sixiang Shiguang Technology Co., Ltd and Bentong Deng. (Denny Tang), dated February 4, 2020 (English Translation) (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.13
Loan Agreement between Zhihui Qiyuan (Beijing) Technology Co., Ltd. and Changxiang Infinite (Beijing) Technology Co. Ltd., dated April 2, 2020 (English Translation) (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.14
Exclusive Option Agreement among Sixiang Wuxian (Beijing) Technology Co., Ltd., Xiaoke Yin, Beijing Junwei Technology Co., Ltd., and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.15
The Supplement Agreement of Exclusive Option Agreement among Sixiang Wuxian (Beijing) Technology Co., Ltd., Xiaoke Yin, Beijing Junwei Technology Co., Ltd., and Zhihui Qiyuan (Beijing) Technology Co., Ltd. dated August 30, 2019 (English Translation) (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.16
Power of Attorney Agreement between Sixiang Wuxian (Beijing) Technology Co., Ltd., and Xiaoke Yin, dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.17
Share Pledge Agreement among Sixiang Wuxian (Beijing) Technology Co., Ltd., Xiaoke Yin, Beijing Junwei Technology Co., Ltd., and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.18
Exclusive Business Cooperation Agreements between Sixiang Wuxian (Beijing) Technology Co., Ltd. and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated January 29, 2019 (English Translation) (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.19
The Supplement Agreement of Exclusive Business Cooperation Agreement between Sixiang Wuxian (Beijing) Technology Co., Ltd. and Zhihui Qiyuan (Beijing) Technology Co., Ltd., dated August 30, 2019 (English Translation) (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.20
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.21
Registration Rights Agreement among Wealthbridge Acquisition Limited, Lavacano Holdings Limited, and WBY Entertainment Holdings Ltd., dated May 7, 2020 (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.22
Escrow Agreement among Loeb & Loeb LLP, Wealthbridge Acquisition Limited, Lavacano Holdings Limited, and WBY Entertainment Holdings Ltd., dated May 7, 2020 (incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.23
Resale Lock-up Agreement between Wealthbridge Acquisition Limited and Lavacano Holdings Limited, dated May 7, 2020 (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.24
Resale Lock-up Agreement between Wealthbridge Acquisition Limited and WBY Entertainment Holdings Ltd., dated May 7, 2020 (incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.25
Voting Agreement among Wealthbridge Acquisition Limited, Oriental Holdings Limited, Lavacano Holdings Limited, WBY Entertainment Holdings Ltd. and Yongsheng Liu, dated May 7, 2020 (incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
4.26
Equity Acquisition Framework Agreement (English Translation), dated August 10, 2020 (incorporated by reference to Exhibit 10.19 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).
4.27
Resale Lock-up Agreement with Cosmic Soar Limited, dated September 10, 2020 (incorporated by reference to Exhibit 10.20 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).
4.28
Share Transfer Agreement between Cosmic Soar Limited and Scienjoy Inc., dated August 10, 2020 (incorporated by reference to Exhibit 10.21 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).
141
4.29
Equity Interest Transfer Agreement between Tianjin Guangju Dingsheng Technology Co., Ltd. and Zhihui Qiyuan Technology Co., Ltd., dated August 10, 2020 (incorporated by reference to Exhibit 10.22 to the Registration Statement Amendment on Form F-1 filed with the SEC on October 16, 2020).
4.30
Common Stock Purchase Agreement between Scienjoy Holding Corporation and White Lion Capital LLC, dated February 23, 2021 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 6-K filed with the SEC on February 23, 2021).
4.31
Registration Rights Agreement between Scienjoy Holding Corporation and White Lion Capital LLC, dated February 23, 2021 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed with the SEC on February 23, 2021).
4.32
Escrow Agreement among Scienjoy Holding Corporation, White Lion Capital LLC, and Indeglia PC, dated February 23, 2021 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 6-K filed with the SEC on February 23, 2021).
4.33
Termination and Release Agreement by and between Scienjoy Holding Corporation and White Lion Capital LLC, dated June 24, 2021 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 6-K filed with the SEC on June 28, 2021).
4.34
Equity Acquisition Framework Agreement by and among Scienjoy Holding Corporation, Golden Shield Enterprises Limited, Beijing Weiliantong Technology Co., Ltd., Tianjin Yieryi Technology Co., Ltd., Wolter Global Investment Limited and Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) dated December 29, 2021. (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).
4.35
Form of Equity Interest Transfer Agreement between Zhihui Qiyuan (Beijing) Science and Technology Co., Ltd. and Tianjin Yieryi Technology Co., Ltd. (incorporated by reference to Exhibit 99.3 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).
4.36
Form of Share Transfer Agreement between Scienjoy Inc. and Wolter Global Investment Limited. (incorporated by reference to Exhibit 99.4 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).
4.37
Equity Repurchase Agreement by and among Tianjin Yieryi Technology Co., Ltd., Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership), Zhihui Qiyuan (Hainan) Investment Co., Ltd, Junpeng Guo and Ting Zhao dated December 29, 2021. (incorporated by reference to Exhibit 99.5 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).
4.38
Equity Interest Purchase and Sale Agreement by and among Zhihui Qiyuan (Hainan) Investment Co., Ltd. Junpeng Guo, Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership), Ting Zhao and Tianjin Yieryi Technology Co., Ltd dated December 29, 2021. (incorporated by reference to Exhibit 99.6 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).
4.39
Form of Resale Lock-up Agreement between Qingdao Weilaijin Industry Investment Fund Partnership (Limited Partnership) and Scienjoy Holding Corporation. 99.8 Form of Resale Lock-up Agreement between Wolter Global Investment Limited and Scienjoy Holding Corporation. (incorporated by reference to Exhibit 99.7 to the Current Report on Form 6-K filed with the SEC on December 29, 2021).
4.40
Exclusive Option Agreement by and among Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., Sheng Hou, and Yong Xie. dated June 1, 2022. (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).
4.41
Power of Attorney Agreement by and between Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., and Sheng Hou. dated June 1, 2022. (incorporated by reference to Exhibit 99.3 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).
4.42
Power of Attorney Agreement by and between Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., and Yong Xie, dated June 1, 2022. (incorporated by reference to Exhibit 99.4 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).
4.43
Share Pledge Agreement by and among Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd., Sheng Hou, Yong Xie, and Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd., dated June 1, 2022. (incorporated by reference to Exhibit 99.5 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).
4.44
Exclusive Business Cooperation Agreement by and between Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd. and Sixiang Qiyuan (Hangzhou) Culture Technology Co., Ltd. dated June 1, 2022. (incorporated by reference to Exhibit 99.6 to the Current Report on Form 6-K filed with the SEC on June 17, 2022).
8.1*
Subsidiaries of the Registrant.
12.1*
CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*
CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2*
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*
Consent of OneStop Assurance PAC
15.2*
Consent of Beijing Feng Yu Law Firm
16.1
Letter from Marcum LLP to the Securities and Exchange Commission, dated May 13, 2020. (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on May 13, 2020).
16.2
Letter from Friedman LLP to the Securities and Exchange Commission, dated April 19, 2022. (incorporated by reference to Exhibit 16.1 to the Current Report on Form 6-K filed with the SEC on April 19, 2022).
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
    Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
    Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
    Document.
104
Cover Page Interactive
    Data File (embedded within the Inline XBRL document)
*
Filed herewith.
142
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused
and authorized the undersigned to sign this annual report on its behalf.
Scienjoy Holding Corporation
By:
/s/ Xiaowu
    He
Name:
Xiaowu He
Title:
Chief Executive Officer
Date:
April 28, 2023
143
SCIENJOY HOLDING CORPORATION
INDEX TO CONSOLIDATED FINANCIAL INFORMATION
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID:
6732
)
F-2
Consolidated Balance Sheets as of December 31, 2021 and 2022
F-3
Consolidated Statements of Operation and Comprehensive Income for the Years Ended December 31, 2020, 2021 and 2022
F-4
Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2020, 2021 and 2022
F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2021 and 2022
F-6
Notes to the Consolidated Financial Statements
F-7
F-
1
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Scienjoy Holding Corporation
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheet of Scienjoy Holding Corporation and Subsidiaries (collectively, the "Company") as of December 31,
2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for for
each of the two years in the period ended December 31, 2022, and the related notes to the consolidated financial statements and schedule
(collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial
positions of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years
in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect
to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness
of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for
our opinion.
/s/
OneStop Assurance PAC
We have served as the Company's auditor
since 2022.
Singapore
April 28, 2023
F-
2
SCIENJOY HOLDING CORPORATION
CONSOLIDATED BALANCE
SHEETS
(All amounts in thousands,
except share and per share data or otherwise stated)
As of December 31,
2021
2022
2022
RMB
RMB
USD
ASSETS
Current assets
Cash and cash equivalents
240,947
175,292
25,415
Accounts receivable, net
206,307
316,657
45,911
Prepaid expenses and other current assets
165,409
115,170
16,699
Amounts due from related parties
1,059
1,115
162
Investment in marketable security
38,789
40,548
5,879
Total current assets
652,511
648,782
94,066
Property and equipment, net
1,674
2,735
397
Intangible assets, net
235,870
419,055
60,757
Goodwill
92,069
172,781
25,051
Long term investment
101,727
234,176
33,952
Long term deposits and other assets
1,152
953
138
Right-of-use assets-operating lease
-
19,209
2,785
Deferred tax assets
4,352
4,337
629
Total non-current assets
436,844
853,246
123,709
TOTAL ASSETS
1,089,355
1,502,028
217,775
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank loan
-
5,000
725
Accounts payable
85,801
116,251
16,855
Accrued salary and employee benefits
24,533
12,428
1,802
Accrued expenses and other current liabilities
16,181
13,264
1,923
Contingent consideration – earn-out liability
10,638
4,336
629
Warrant liabilities
10,324
166
24
Income tax payable
8,282
13,531
1,962
Lease liabilities-operating lease -current
-
7,174
1,040
Deferred revenue
65,405
93,383
13,539
Total current liabilities
221,164
265,533
38,499
Non-current liabilities
Deferred tax liabilities
58,746
61,236
8,878
Lease liabilities-operating lease -non-current
-
12,773
1,852
Total non-current liabilities
58,746
74,009
10,730
TOTAL LIABILITIES
279,910
339,542
49,229
Commitments and contingencies
EQUITY*
Ordinary share,
no
par value, unlimited Class A ordinary shares and Class B ordinary shares authorized,
28,219,583
Class A ordinary shares and
2,625,058
Class B ordinary shares issued and outstanding as of December 31, 2021, respectively.
36,684,668
Class A ordinary shares and
2,925,058
Class B ordinary shares issued and outstanding as of December 31, 2022, respectively
Class A ordinary shares
140,196
396,880
57,542
Class B ordinary shares
13,041
23,896
3,465
Shares to be issued
128,119
33,923
4,918
Treasury stocks
-
(
16,482
)
(
2,390
)
Statutory reserves
31,775
39,208
5,685
Retained earnings
479,199
665,099
96,430
Accumulated other comprehensive income
17,115
18,070
2,622
Total shareholders' equity
809,445
1,160,594
168,272
Non-controlling interests
-
1,892
274
Total equity
809,445
1,162,486
168,546
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
1,089,355
1,502,028
217,775
*
Ordinary shares and share data
have been retroactively restated to give effect to the reverse recapitalization
The accompanying notes
are an integral part of these consolidated financial statements.
F-
3
SCIENJOY
HOLDING CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(All amounts in thousands,
except share and per share data or otherwise stated)
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Live streaming - consumable virtual items revenue
1,187,431
1,617,056
1,886,179
273,470
Live streaming - time based virtual item revenue
29,596
32,905
27,683
4,014
Technical services and others
5,156
19,397
39,395
5,712
Total revenue
1,222,183
1,669,358
1,953,257
283,196
Cost of revenues
(
959,939
)
(
1,364,902
)
(
1,670,068
)
(
242,137
)
Gross profit
262,244
304,456
283,189
41,059
Sales and marketing expenses
(
10,121
)
(
4,807
)
(
2,127
)
(
308
)
General and administrative expenses
(
33,889
)
(
65,233
)
(
61,005
)
(
8,845
)
Research and development expenses
(
31,780
)
(
70,039
)
(
67,538
)
(
9,792
)
(Provision for) recovery of doubtful accounts
8,253
1,592
(
2,739
)
(
397
)
Income from operations
194,707
165,969
149,780
21,717
Interest income, net
2,960
3,962
2,506
363
Other income (loss), net
(
4,702
)
(
90
)
11,443
1,659
Foreign exchange gain (loss), net
703
105
(
1,493
)
(
216
)
Change in fair value of investment
-
25,831
1,760
255
Change in fair value of warrant liabilities
3,904
16,421
10,776
1,562
Investments income (loss)
-
(
2,998
)
25,449
3,690
Change in fair value of contingent consideration
(
14,068
)
(
33,584
)
13,071
1,895
Income before income taxes
183,504
175,616
213,292
30,925
Income tax expense
(
7,404
)
(
5,604
)
(
18,067
)
(
2,619
)
Net income
176,100
170,012
195,225
28,306
Less: net income attributable to noncontrolling interest
-
-
1,892
274
Net income attributable to the Company's shareholders
176,100
170,012
193,333
28,032
Other comprehensive income:
Other comprehensive income - foreign currency translation adjustment
14,802
2,313
955
138
Comprehensive income
190,902
172,325
196,180
28,444
Less: comprehensive income attributable to non-controlling interests
-
-
1,892
274
Comprehensive income attributable to the Company's shareholders
190,902
172,325
194,288
28,170
Weighted average number of shares *
Basic
23,287,706
30,842,183
39,263,147
39,263,147
Diluted
26,828,666
30,842,183
39,263,147
39,263,147
Earnings per share
Basic
7.56
5.51
4.92
0.71
Diluted
6.56
5.51
4.92
0.71
*
Ordinary shares and share data
have been retroactively restated to give effect to the reverse recapitalization.
The accompanying notes
are an integral part of these consolidated financial statements.
F-
4
SCIENJOY
HOLDING CORPORATION
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(All amounts in thousands,
except share and per share data or otherwise stated)
Ordinary
    shares
Treasury
    stocks
Shares
    to be
Statutory
Retained
Accumulated
other
comprehensive
Non-controlling
Total
shareholders'
Shares
*
Amount
Shares
*
Amount
issued
reserves
earnings
income
interests
equity
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
Balance
    as of January 1, 2020
19,400,000
9,664
-
-
-
12,059
152,803
-
-
174,526
Conversion of
    convertible notes and rights
63,250
4,038
-
-
-
-
-
-
-
4,038
Issuance of Class
    A ordinary shares for underwriting fee payables
402,983
14,131
-
-
-
-
-
-
-
14,131
Contingent consideration-earn-out
    liability from SPAC Transaction
-
(
266,828
)
-
-
-
-
(
266,828
)
Effect of reverse
    merger recapitalization
2,249,350
(
51,067
)
-
-
-
-
-
-
-
(
51,067
)
Conversion of
    rights to Class A ordinary shares upon the reverse merger recapitalization
602,000
-
-
-
-
-
-
-
-
-
Issuance of Class
    A ordinary shares to underwriter and advisors
533,000
18,713
-
-
-
-
-
-
-
18,713
Issuance of Class
    A ordinary shares for BeeLive Acquisition
3,786,719
175,000
-
-
-
-
-
-
-
175,000
Shares to be
    issued for achievement of earnout target
-
-
-
-
200,100
-
-
-
-
200,100
Net income
-
-
-
-
-
-
176,100
-
-
176,100
Foreign currency
    translation adjustments
-
-
-
-
-
-
-
14,802
-
14,802
Appropriation
    to statutory reserves
-
-
-
-
-
6,293
(
6,293
)
-
-
-
Balance
    as of December 31, 2020
27,037,302
(
96,349
)
-
-
200,100
18,352
322,610
14,802
-
459,515
Net income
170,012
-
170,012
Issuance of shares
    for achievement of earnout target
3,540,960
200,100
-
-
(
200,100
)
-
-
-
-
Issuance shares
    for private placement
108,230
4,177
-
-
-
-
-
-
-
4,177
Exercise of warrants
48,149
4,340
-
-
-
-
-
-
-
4,340
Exercise of Unit Purchase Option
110,000
9,112
-
-
-
-
-
-
-
9,112
Share base compensation
-
31,857
-
-
-
-
-
-
-
31,857
Shares to be
    issued for achievement of earnout target
-
-
-
-
128,119
-
-
-
-
128,119
Appropriation
    to statutory reserves
-
-
-
-
-
13,423
(
13,423
)
-
-
-
Foreign
    currency translation adjustments
-
-
-
-
-
-
-
2,313
-
2,313
Balance
    as of December 31, 2021
30,844,641
153,237
-
-
128,119
31,775
479,199
17,115
-
809,445
Issuance of shares
    for achievement of earnout target
3,540,960
128,119
-
-
(
128,119
)
-
-
-
-
-
Shares issued
    for Weiliantong Acquisition
3,898,511
127,466
-
-
-
-
-
-
-
127,466
Share base compensation
1,325,614
11,954
-
-
-
-
-
-
-
11,954
Shares to be
    issued for achievement of earnout target
-
-
-
-
13,106
-
-
-
-
13,106
Shares to be
    issued for Weiliantong Acquisition
-
-
-
-
20,817
-
-
-
-
20,817
Treasury stocks
-
-
(
794,120
)
(
16,482
)
-
-
-
-
-
(
16,482
)
Appropriation
    to statutory reserves
-
-
-
-
-
7,433
(
7,433
)
-
-
-
Foreign currency
    translation adjustments
-
-
-
-
-
-
-
955
-
955
Net
    income
-
-
-
-
-
-
193,333
-
1,892
195,225
Balance
    as of December 31, 2022
39,609,726
420,776
(
794,120
)
(
16,482
)
33,923
39,208
665,099
18,070
1,892
1,162,486
Balance
    as of December 31, 2022 (USD)
39,609,726
61,007
(
794,120
)
(
2,390
)
4,918
5,685
96,430
2,622
274
168,546
*
Ordinary shares and share data
have been retroactively restated to give effect to the reverse recapitalization.
The accompanying notes
are an integral part of these consolidated financial statements.
F-
5
SCIENJOY
HOLDING CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(All amounts in thousands,
except share and per share data or otherwise stated)
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Cash flows from operating activities
Net income
176,100
170,012
195,225
28,306
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property and equipment
555
745
1,149
167
Amortization of intangible assets
1,749
4,090
7,038
1,020
Provision (recovery) for doubtful accounts
(
8,253
)
(
1,592
)
2,739
397
Deferred tax expenses (benefit)
1,945
319
(
1,402
)
(
203
)
Change in fair value of contingent consideration
14,068
33,584
(
13,071
)
(
1,895
)
Change in fair value of warrant liabilities
(
3,904
)
(
16,421
)
(
10,776
)
(
1,562
)
Change in fair value of investment
-
(
25,831
)
(
1,760
)
(
255
)
Investments loss (income)
-
2,998
(
25,449
)
(
3,690
)
Share based compensation
-
31,857
11,954
1,733
Amortization of the Right-of-use assets
-
-
6,265
908
Changes in operating assets and liabilities
Accounts receivable
(
70,513
)
23,499
(
112,058
)
(
16,247
)
Prepaid expense and other current assets
5,193
(
151,657
)
64,180
9,305
Long term deposits and other assets
1,379
230
335
49
Accounts payable
28,396
18,712
25,503
3,698
Deferred revenue
1,404
15,838
22,397
3,247
Accrued salary and employee benefits
8,028
6,392
(
14,109
)
(
2,046
)
Accrued expenses and other current liabilities
(
852
)
3,825
(
100,331
)
(
14,547
)
Lease liabilities
-
-
(
5,527
)
(
801
)
Income tax payable
146
(
299
)
5,249
761
Net cash provided by operating activities
155,441
116,301
57,551
8,345
Cash flows from investing activities
Cash acquired from acquisition
10,152
-
9,707
1,407
Payment to acquisition
(
50,000
)
-
(
13,800
)
(
2,001
)
Payment for long term investment
-
(
113,735
)
(
107,000
)
(
15,514
)
Purchase of property and equipment and intangible assets
(
1,086
)
(
1,389
)
(
2,153
)
(
312
)
Net cash used in investing activities
(
40,934
)
(
115,124
)
(
113,246
)
(
16,420
)
Cash flows from financing activities
Net proceeds from private placement
-
15,284
-
-
Net cash acquired in the reverse recapitalization
32,659
-
-
-
Repayments to loan
(
57,400
)
-
-
-
Proceeds from bank loan
-
-
5,000
725
Repayments from related parties
22,340
-
-
-
Loan to related parties
(
14,007
)
-
-
-
Share repurchase
-
-
(
16,482
)
(
2,390
)
Payment of listing cost
(
6,924
)
-
-
-
Net cash (used in) provided by financing activities
(
23,332
)
15,284
(
11,482
)
(
1,665
)
Effect of foreign exchange rate changes on cash
(
3,758
)
(
282
)
1,522
221
Net (decrease) increase in cash and cash equivalents
87,417
16,179
(
65,655
)
(
9,519
)
Cash and cash equivalents at beginning of the year
137,351
224,768
240,947
34,934
Cash and cash equivalents at end of the year
224,768
240,947
175,292
25,415
Supplemental disclosures of cash flow information:
Income taxes paid
(
6,946
)
(
9,502
)
9,076
1,316
Supplemental non-cash investing and financing information:
Conversion of convertible notes and rights
4,038
13,452
-
-
Recognition of contingent consideration
306,583
-
19,875
2,882
Issuance of Class A ordinary shares for acquisition
175,000
-
127,466
18,481
Issuance of Class A ordinary shares for settlement of underwriting fee
14,131
-
-
-
Issuance of Class A ordinary shares to underwriter and advisors
18,713
-
-
-
Issuance of Class A ordinary shares for achievement of earnout target
-
200,100
117,264
17,002
Issuance of Class B ordinary shares for achievement of earnout target
-
-
10,855
1,574
Shares to be issued for achievement of earnout target
200,100
128,119
13,106
1,900
Shares to be issued for Weiliantong Acquisition
-
-
20,817
3,018
Right-of-assets obtained in exchange for operating lease obligations
-
-
25,474
3,693
The accompanying notes
are an integral part of these consolidated financial statements.
F-
6
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES
Scienjoy
Holding Corporation (the "Company" or "Scienjoy") through its subsidiaries, and variable interest entities("VIE")
and its subsidiaries (collectively the "Group") are principally engaged in operating its own live streaming platforms in the
People's Republic of China (the "PRC"), which enable users to view and interact with broadcasters through online chat,
virtual items and playing games. The primary theme of the Company's platform is entertainment live streaming.
(a)
Reverse recapitalization
On May 7,
2020, the Company, formerly known as Wealthbridge Acquisition Limited ("Wealthbridge"), consummated the transactions (the
"SPAC Transaction") contemplated by the Share Exchange Agreement (the "Share Exchange Agreement") dated as of
October 28, 2019, pursuant to which the Company acquired
100
% of the issued and outstanding equity interests of Scienjoy Inc. and
changed its name to Scienjoy Holding Corporation. Upon the closing of the Transaction, the Company acquired
100
% of the issued and
outstanding equity interests of Scienjoy Inc. in exchange for approximately in aggregated of
19.4
million Class A ordinary shares,
including
3
million Class A ordinary shares as part of earn-out consideration that was issued to the previous owners of
Scienjoy Inc. (Note -2). Scienjoy Inc. was determined to be the accounting acquirer given that the original shareholders of Scienjoy Inc.
effectively controlled the combined entity after the Transaction. The Transaction is not a business combination because Wealthbridge was
not a business. The transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by Scienjoy
Inc. for the net monetary assets of Wealthbridge, accompanied by a recapitalization. Scienjoy Inc. is determined as the predecessor, and
the historical financial statements of Scienjoy Inc. became the Company's historical financial statements, with retrospective adjustments
to give effect of the reverse recapitalization. The share and per share data is retrospectively restated to give effect to the reverse
recapitalization.
(b)
Reorganization
On January
1, 2018, Tongfang Investment Fund Series SPC ("TF") completed the acquisition of a
65
% equity interest in Sixiang Times
(Beijing) Technology Co., Ltd ("Sixiang Times") from NQ Mobile Inc. Through the acquisition of Sixiang Times, TF acquired
a controlling position in Holgus Sixiang Information Technology Co., Ltd ("Holgus X"), Kashgar Sixiang Times Internet Technology
Co., Ltd ("Kashgar Times"), Beijing Sixiang Shiguang Technology Co., Ltd ("SG"), Hai Xiu (Beijing) Technology
Co., Ltd ("HX") and Beijing Le Hai Technology Co., Ltd ("LH").
On May 18,
2017, Scienjoy Inc. established its wholly owned subsidiary in Hong Kong, Scienjoy International Limited ("Scienjoy HK"),
as a holding company holding all of the outstanding shares of Sixiang Wuxian (Beijing) Technology Co., Ltd ("WXBJ") which
was established in PRC on October 17, 2017 under the laws of the People's Republic of China as a holding company holding all of
the equity interest of Sixiang Zhihui (Beijing) Technology Co., Ltd. ("ZH"),which was incorporated on July 5, 2018.
Scienjoy
Inc. established ZH (through WXBJ), as a holding company for purpose of holding all of the outstanding equity interest of Holgus X and Kashgar
Times, as follows:
(i)
On July 18, 2018, Sixiang Times
and ZH executed an equity transfer agreement. Pursuant to the agreement,
100
% equity interest in Holgus X was transferred to ZH.
(ii)
On July 24, 2018, Sixiang Times
and ZH executed an equity transfer agreement. Pursuant to the agreement,
100
% equity interest in Kashgar Times was transferred to
ZH. In consideration of the transfer, the Company paid RMB
10,000
to the former shareholders of Kashgar Times.
On November
16, 2018, Sixiang Times and other minority shareholders respectively entered into certain equity transfer agreements with Sixiang
Huizhi (Beijing) Technology Culture Co., Ltd. ("HZ") and Tianjin Sihui Peiying Technology Co., Ltd. ("SY"), and
transfer
100
% equity interest in SG to HZ, and transfer
100
% equity interest in HX and LH to HZ and SY accordingly. Both HZ and SY were
ultimately controlled by TF.
On January
28, 2019, HZ and SY executed equity transfer agreement with Zhihui Qiyuan (Beijing) Technology Co., Ltd. ("QY"). Pursuant
to the agreement,
100
% equity interest in SG, HX and LH were transferred to QY which is ultimately controlled by TF. In consideration
of the transfer, Scienjoy Inc. paid RMB
32,000
to the former shareholders of SG, HX and LH.
F-
7
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(b)
Reorganization (continued)
On January
29, 2019, Scienjoy Inc., through its wholly owned subsidiary WXBJ, entered into a series of contractual arrangements (VIE Agreements)
with QY and its respective shareholders, and in substance controlled all equity shares, risk and reward of SG, HX and LH through QY accordingly
as a primary beneficiary of QY.
On January
29, 2019, Scienjoy Inc. completed its reorganization of entities under the common control of the founders. Scienjoy, Scienjoy HK, WXBJ
and ZH were established as holding Companies. WXBJ holds
100
% of equity interests of ZH which holds
100
% of equity interest in Kashgar
Times and Holgus X. WXBJ is the primary beneficiary of QY which holds
100
% equity interest in SG, HX and LH. These transactions were between
entities under common control, and therefore accounted for in a manner similar to the pooling of interest method. Under the pooling-of-interests
method, combination between two businesses under common control is accounted for at carrying amounts with retrospective adjustment of
prior period financial statements, and the equity accounts of the combining entities are combined and the difference between the consideration
paid and the net assets acquired is reflected as an equity transaction (i.e., distribution to parent company). As opposed to the purchase
method of accounting, no intangible assets are recognized in the transaction, and no goodwill is recognized as a result of the combination.
(c)
Recent developments
In December
2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world
in the first half of 2020, which has caused significant volatility in the PRC and international markets. After the initial outbreak of
COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the infections
caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai in 2022,
and a series of restrictions and quarantines were implemented to contain the spread. Our Beijing and Hangzhou office did not work at full
capacity for approximately two months when these restrictive measures are in force, which negatively affected our operational and financial
results. Many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread of the COVID-19
virus have been revoked or replaced with more flexible measures since December 2022. While the revocation or replacement of the restrictive
measures to contain the COVID-19 pandemic could have a positive impact on our normal operations, the extent of the impact on the Company's
future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence
of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy
and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company
is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity
and results of operations if the current situation continues.
On January
1, 2022, the Company closed an Equity Acquisition Framework Agreement (the "Framework Agreement") with Golden Shield
Enterprises Limited ("Golden Shield"), Beijing Weiliantong Technology Co., Ltd. ("Weiliantong"), The Company acquired
100
% of the issued and outstanding securities of Weiliantong and Golden Shield for an aggregate consideration of RMB
280,000
(approximately
US$
40,600
)
On January
4, 2022, the Company set up a new subsidiary, Sixiang Zhihui (Zhejiang) Culture Technology Co., Ltd. for general corporate purpose.
On January
25, 2022, SG consummated the acquisition of the
100
% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. ("CDZH")
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. ("HYDC") from its original shareholders for a
cash consideration of RMB
100
(US$
14
).
On February
15, 2022, QYHN established a
51
% owned subsidiary Hongcheng Huiying (Hangzhou) Technology Industry Development Co., Ltd. ("HCHY")
in Zhejiang, PRC to provide information technology service.
On April
7, 2022, Sixiang Qiyuan(Hangzhou) Culture Technology Co., Ltd ("QYHZ") and its several wholly owned subsidiaries were established
in Zhejiang, PRC to provide information technology service. QYHZ is controlled through contractual agreement in lieu of direct equity
ownership by WXZJ.
On April
28, 2022, Scienjoy HK established a wholly owned subsidiary Sixiang Wuxian (Zhejiang) Culture Technology Co. Ltd. ("WXZJ")
and its subsidiary Sixiang Zhihui(Zhejiang) Culture Technology Co., Ltd ("ZHZJ") in Zhejiang, PRC to provide information
technology service.
On June
30, 2022, WXBJ established a wholly owned subsidiary Sixiang Yingyue (Shanghai) Technology Co., Ltd ("SXYY"), in Shanghai,
PRC to provide information technology service.
F-
8
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization
Subsidiaries
of the Company and VIEs where the Company is the primary beneficiary include the following:
Subsidiaries
Date
    of
incorporation
Place
    of
incorporation
Percentage
    of
direct/indirect
ownership
Principal
activities
Scienjoy
    Inc.
February 23, 2017
Cayman Islands
100
%
Holding Company
Scienjoy
    International Limited ("Scienjoy HK")
May 18, 2017
Hong Kong
100
%
Holding Company
Scienjoy
    BeeLive Limited (formerly known as Sciscape International Limited, "SIL")
December 18, 2017
Hong Kong
100
%
Live streaming platform
Golden
    Shield Enterprises Limited ("Golden Shield")
September 28, 2021
British Virgin Islands
100
%
Holding Company
Sixiang
    Wuxian (Beijing) Technology Co., Ltd. ("WXBJ") (a wholly owned subsidiary of Scienjoy HK)
October 17, 2017
The PRC
100
%
Holding Company
Sixiang
    Zhihui (Beijing) Technology Co., Ltd. ("ZH") (a wholly owned subsidiary of WXBJ)
July 5, 2018
The PRC
100
%
Holding Company
Sixiang
    Yingyue (Shanghai) Technology Co., Ltd("SXYY") (a wholly owned subsidiary of WXBJ)
June 30, 2022
The PRC
100
%
Information technology
Holgus
    Sixiang Information Technology Co., Ltd. ("Holgus X") (a wholly owned subsidiary of ZH)
May 9, 2017
The PRC
100
%
Live streaming platform
Kashgar
    Sixiang Times Internet Technology Co., Ltd. ("Kashgar Times") (a wholly owned subsidiary of ZH)
March 2, 2016
The PRC
100
%
Live streaming platform
Kashgar
    Sixiang Lehong Information Technology Co., Ltd ("Kashgar Lehong") (a wholly owned subsidiary of ZH)
July 23, 2020
The PRC
100
%
Information technology
Holgus
    Sixiang Haohan Internet Technology Co., Ltd. ("Holgus H") (a wholly owned subsidiary of ZH)
December 11, 2020
The PRC
100
%
Information technology
Sixiang
    ZhiHui (Hainan) Technology Co., Ltd ("ZHHN") (a wholly owned subsidiary of ZH)
December 23, 2020
The PRC
100
%
Live streaming platform
Sixiang
    Wuxian (Zhejiang) Culture Technology Co., Ltd ("WXZJ") (a wholly owned subsidiary of Scienjoy HK)
April 28, 2022
The PRC
100
%
Information technology
Sixiang
    Zhihui (Zhejiang) Culture Technology Co., Ltd ("ZHZJ") (a wholly owned subsidiary of WXZJ)
January 4, 2022
The PRC
100
%
Information technology
VIEs
Zhihui
    Qiyuan (Beijing) Technology Co., Ltd. ("QY") (Controlled through contractual agreements by WXBJ)
January 22, 2019
The PRC
100
%
Holding Company
Beijing
    Sixiang Shiguang Technology Co., Ltd. ("SG") (a wholly owned subsidiary of QY)
October 28, 2011
The PRC
100
%
Live streaming platform
Hai
    Xiu (Beijing) Technology Co., Ltd. ("HX") (a wholly owned subsidiary of QY)
April 18, 2016
The PRC
100
%
Live streaming platform
Beijing
    Le Hai Technology Co., Ltd. ("LH") (a wholly owned subsidiary of QY)
June 16, 2015
The PRC
100
%
Live streaming platform
Lixiaozhi
    (Chongqing) Internet Technology Co., Ltd. ("LXZ") (a wholly owned subsidiary of SG) *
July 18, 2018
The PRC
100
%
Live streaming platform
Sixiang
    Mifeng (Tianjin) Technology Co., Ltd ("DF", formerly known as Tianjin Guangju Dingfei Technology Co., Ltd) (a wholly
    owned subsidiary of QY)
August 8, 2016
The PRC
100
%
Live streaming platform
Changxiang
    Infinite Technology (Beijing) Co., Ltd. ("CX") (a wholly owned subsidiary of DF)
September 22, 2016
The PRC
100
%
Live streaming platform
Zhihui
    QiYuan (Hainan) Investment Co., Ltd ("QYHN") (a wholly owned subsidiary of QY)
March 2, 2021
The PRC
100
%
Live streaming platform
Shanhai
    Weilan (Beijing) Technology Co., Ltd ("SHWL") (a wholly owned subsidiary of SG) **
September 27, 2021
The PRC
100
%
Live streaming platform
Shihuai
    (Beijing) Technology Co., Ltd ("SH") (a wholly owned subsidiary of SG) **
September 29, 2021
The PRC
100
%
Live streaming platform
Huayu
    Hefeng (Qingdao) Technology Co., Ltd ("HYHF") (a wholly owned subsidiary of SG)
September 29, 2021
The PRC
100
%
Live streaming platform
Beijing
    Weiliantong Technology Co., Ltd.("WLT") (a wholly owned subsidiary of QY)
July 28, 2015
The PRC
100
%
Live streaming platform
Chuangda
    Zhihui (Beijing) Technology Co., Ltd.("CDZH") (a wholly owned subsidiary of SG)
November 30, 2015
The PRC
100
%
Live streaming platform
Beijing
    Huayi Dongchen Technology Co., Ltd. ("HYDC") (a wholly owned subsidiary of CDZH)
February 6, 2015
The PRC
100
%
Live streaming platform
Hongcheng
    Huiying (Zhejiang)Technology Industry Development Co., Ltd("HCHY") (a 51% owned subsidiary of QYHN)
February 15, 2022
The PRC
51
%
Live streaming platform
Sixiang
    Qiyuan (Hangzhou) Culture Technology Co., Ltd ("QYHZ") (Controlled through contractual agreements by WXZJ)
March 30, 2022
The PRC
100
%
Holding Company
Xiuli
    (Zhejiang) Culture Technology Co., Ltd ("XLZJ") (a wholly owned subsidiary of QYHZ)
April 7, 2022
The PRC
100
%
Live streaming platform
Leku
    (Zhejiang) Culture Technology Co., Ltd ("LKZJ") (a wholly owned subsidiary of QYHZ)
April 7, 2022
The PRC
100
%
Live streaming platform
Haifan
    (Zhejiang) Culture Technology Co., Ltd ("HFZJ") (a wholly owned subsidiary of QYHZ)
April 7, 2022
The PRC
100
%
Live streaming platform
Xiangfeng
    (Zhejiang) Culture Technology Co., Ltd ("XFZJ") (a wholly owned subsidiary of QYHZ)
April 7, 2022
The PRC
100
%
Live streaming platform
Hongren
    (Zhejiang) Culture Technology Co., Ltd ("HRZJ") (a wholly owned subsidiary of QYHZ)
April 7, 2022
The PRC
100
%
Live streaming platform
*
LXZ was deregistered in July,
2022. Since this entity was inactive, the deregistration does not have a material impact to the Company's consolidated financial
statements for the years ended December 31 2020, 2021 and 2022.
**
On December 31, 2022, the Board
approved to the sale of the Company's
100
% ownership interest in SHWL and SH to third parties for a nominal consideration because
SHWL and SH has not commenced any operation since their inception. Management determined that this disposition did not represent a strategic
shift and had no significant effect on the Company's operations and financial results; therefore, no discontinued operations were
presented.
F-
9
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization (continued)
On January
29, 2019, the Company completed its reorganization of entities under the common control of the founders. Scienjoy, Scienjoy HK, WXBJ and
ZH were established as holding Companies. WXBJ holds
100
% of equity interests of ZH which holds
100
% of equity interest in Kashgar
Times and Holgus X. WXBJ is the primary beneficiary of QY which holds
100
% equity interest in SG, HX and LH (collectively "QY
VIEs"). All of these entities included in the Company are under common control, which results in the consolidation of QY and ZH
which have been accounted for as a reorganization of entities under common control at carry value. The consolidated financial statements
are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying
consolidated financial statements of the Company.
Contracts between the Company and the QY
VIEs
Foreign
ownership of Internet-based businesses, including distribution of online information (such as game content provider), is subject to restrictions
under current PRC laws, regulations, and other applicable laws and regulations. The Company is a Cayman Island company and WXBJ and WXZJ
(its PRC subsidiaries) are considered foreign invested enterprises. To comply with these regulations, the Company operates the live streaming
platforms through SG, HX and LH in PRC (its consolidated VIE). As such, QY is controlled through contractual arrangements in lieu of direct
equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of three agreements and
a shareholder power of attorney (collectively the "Contractual Arrangements", which were signed on January 29, 2019).
The following
is a summary of the various VIE agreements:
Exclusive
Option Agreements
Pursuant
to the exclusive option agreement (including its amendment or supplementary agreements, if any, the "Exclusive Option Agreement")
amongst WXBJ, QY and the nominee shareholders who collectively owned all of QY, the nominee shareholders irrevocably granted WXBJ or its
designated party, an exclusive option to purchase all or part of the equity interests held by the nominee shareholders in QY, when and
to the extent permitted under PRC law, at an amount equal to the lowest permissible purchase price as set by PRC law. QY cannot declare
any profit distributions, or create any encumbrances in any form without the prior written consent of WXBJ. The nominee shareholders must
remit in full any funds received from QY to WXBJ, in the event any distributions are made by the VIE pursuant to any written consents
of WXBJ.
The Exclusive
Option Agreement shall remain effective for
twenty
(20) years and shall be automatically extended for an additional
period of
one
(1) year. The additional period automatically enters the renewal extension of
one
(1) year at
the end of each extended additional period. WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days'
prior termination notice.
Exclusive
Business Cooperation Agreements
Pursuant
to the exclusive business cooperation agreement (including its amendment or supplementary agreements, if any, the "Exclusive Business
Cooperation Agreement") between WXBJ and the VIE, WXBJ is to provide exclusive business support, technical and consulting services
related to all technologies needed for its business in return for fees that equals to all of the consolidated net income after offsetting
previous year's loss (if any) of SG, HX and LH.
F-
10
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization (continued)
The service
fees may be adjusted by WXBJ based on the following factors:
●
complexity and difficulty of the
services pursuant to the business cooperation agreement to the VIE during the month (the "Monthly Services")
●
the number of WXBJ's
employees who provided the Monthly Services and the qualifications of the employees;
●
the number of hours WXBJ's
employees spent to provide the Monthly Services;
●
nature and value of the Monthly
Services;
●
market reference price; and
●
the VIE' operating conditions
for the month.
The term
of the Exclusive Business Cooperation Agreement is
twenty
(20) years and shall be automatically extended for an additional
period of
one
(1) year. The additional period automatically enters the renewal extension of
one
(1) year at
the end of each extended additional period. Besides, WXBJ has the right to terminate this agreement at any time after giving a thirty
(30) days' prior termination notice.
Power
of Attorney Agreements
The nominee
shareholders entered into the power of attorney agreement (including its amendment or supplementary agreements, if any, the "Power
of Attorney Agreement") whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests
in the VIE to WXBJ, which includes, but are not limited to, all the shareholders' rights and voting rights empowered to the nominee
shareholders by the PRC company law and the VIE's Article of Association. The power of attorney remains irrevocable and continuously
valid from the date of execution so long as each shareholder remains as a shareholder of QY.
Share
Pledge Agreements
Pursuant
to the share pledge agreement (including its amendment or supplementary agreements, if any, the "Share Pledge Agreement")
between WXBJ, QY and the nominee shareholders, the nominee shareholders have pledged all their equity interests in the VIE to guarantee
the performance of the VIE' obligations under the Exclusive Option Agreement, Exclusive Business Cooperation Agreement and Power
of Attorney Agreement.
If the VIE
breaches their respective contractual obligations under those agreements, WXBJ, as pledgee, will be entitled to certain rights, including
the right to sell the pledged equity interests. The nominee shareholders agreed not to transfer, sell, pledge, dispose of or otherwise
create any new encumbrance on their equity interests in the VIE without the prior written consent of WXBJ. The Share Pledge Agreement
shall be continuously valid until all the its obligations under the VIE Agreements have been fulfilled, or the VIE Agreements are terminated,
or the secured debts has been fully executed.
Based on
the foregoing contractual arrangements, which grant WXBJ effective control of QY and its subsidiaries and obligate WXBJ to absorb all
of the risk of loss from their activities and enable WXBJ to receive all of their expected residual returns, the Company accounts for
QY as a VIE. Accordingly, the Company consolidates the accounts of QY for the periods presented herein, in accordance with Regulation
S-X-3A-02 promulgated by the Securities Exchange Commission ("SEC") and Accounting Standards Codification ("ASC")
810-10, Consolidation.
F-
11
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization (continued)
Contractual Arrangements among WXZJ, QYHZ,
and the Shareholders of QYHZ.
On
June 1, 2022, the Company through its wholly-owned subsidiary, Sixiang Infinite (Zhejiang) Culture Technology Co., Ltd. (WXZJ),
entered into a series of contractual arrangements with QYHZ (Hangzhou) Culture Technology Co., Ltd. ("QYHZ") and its
shareholders, thereby in substance obtained control over all equity shares, risks and economic benefits of Xiuli (Zhejiang) Culture
Technology Co., Ltd., Leku (Zhejiang) Culture Technology Co., Ltd., Haifan (Zhejiang) Culture Technology Co., Ltd., Xiangfeng
(Zhejiang) Culture Technology Co., Ltd. and Hongren (Zhejiang) Culture Technology Co., Ltd. The Company will commence its operations
in Hangzhou after effecting the agreements under such contractual arrangements (the "VIE Agreements") as de scribed
below. The Company intends to integrate its supply chain resources, local resources, and geographical advantages to achieve rapid
growth in livestreaming commerce, Multi-Channel Network development, and new technology development, as well as accelerating the
development of a Metaverse eco-system.
Materials
terms and conditions of the VIE Agreements, including an Exclusive Option Agreement, the Power of Attorney Agreement, a Share Pledge Agreement
and an Exclusive Business Cooperation Agreement, are described as follows:
Exclusive
Option Agreement.
Pursuant
to the Exclusive Option Agreement (including any supplementary agreement thereto, if any) entered into by and among WXZJ, QYHZ and all
the shareholders of QYHZ, the shareholders of QYHZ hereby irrevocably grant to WXZJ or its designee, to the extent permitted by the laws
of the People's Republic of China, the exclusive right to purchase all or part of the equity interest held by such shareholders
at the lowest purchase price permitted by the laws of the People's Republic of China. Without the written consent of WXZJ, QYHZ
may not distribute any profits or create any encumbrance in any manner. If QYHZ makes the profit distribution with WXZJ's written
consent, QYHZ's shareholders shall pay all of any funds received by them to WXZJ.
The term
of the Exclusive Option Agreement is
twenty years
and will be automatically renewed for
one year
. Upon the expiration of each renewed
term, the Exclusive Option Agreement will be automatically renewed for one year. In the meantime, WXZJ shall have the right to terminate
the Exclusive Option Agreement at any time by giving a three days' prior notice.
Power of
Attorney Agreements.
WXZJ has
entered into a Power of Attorney Agreement (the "Power of Attorney," including any supplementary agreements, if any) with
each shareholder of QYHZ, pursuant to which each such shareholder grants the proxy rights to Zhejiang WFOE in connection with his equity
interest in QYHZ, including, without limitation, all the shareholders' beneficial rights and voting rights conferred by the Company
Law of the People's Republic of China and the Articles of Association of QYHZ. Each Power of Attorney Agreement shall be irrevocable
from the date of execution and shall continue to be valid until the relevant shareholder no longer holds QYHZ's equity interest.
Share Pledge
Agreement.
In accordance
with the Share Pledge Contract (including any supplementary agreement thereto, if any) entered into by and among Zhejiang WFOE, QYHZ and
each of the shareholders of QYHZ, each shareholder of QYHZ has pledged all of QYHZ's equity interest held by such shareholder to
guarantee the respective performance of QYHZ and such shareholder under the Exclusive Option Contract, the Exclusive Business Cooperation
Agreement and the Power of Attorney Agreement, as applicable.
If QYHZ
or any of its shareholders breaches its contractual obligations under any VIE Agreements, Zhejiang WFOE, as the pledgee, will have certain
rights, including the sale of the pledged equity interest. The shareholders agree that, without the prior written consent of Zhejiang
WFOE, they shall not transfer, sell, pledge, dispose of or in any other manner create any new encumbrance upon their equity interest in
QYHZ. The Share Pledge Agreement shall remain effective until all obligations under the VIE Agreements have been performed, or the VIE
Agreements have been terminated, or all obligations under the VIE Agreements have been fully performed.
F-
12
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization (continued)
Exclusive
Business Cooperation Agreement
In accordance
with the Exclusive Business Cooperation Agreement between WXZJ and QYHZ (including supplementary agreements thereto, if any), WXZJ will
provide QYHZ with exclusive business support and all business-related technologies and consulting services in order to obtain the fees
equal to the consolidated net income of Xiuli (Zhejiang) Culture Tech Co., Ltd., Leku (Zhejiang) Culture Tech Co., Ltd., Haifan (Zhejiang)
Culture Tech Co., Ltd., Xiangfeng (Zhejiang) Culture Tech Co., Ltd. and Hongren (Zhejiang) Culture Tech Co., Ltd. after deducting losses
of the previous year (if any). WXZJ may adjust the service fees according to the following factors:
●
Quarterly
based on the complexity and difficulty of the services provided pursuant to the Exclusive Business Cooperation Agreement during such
quarter ("Quarterly Services");the number of WXZJ's employees who provided the Quarterly Services and the qualifications
of these employees;
●
The
number of hours Zhejiang WFOE's employees spent to provide the Quarterly Services;
●
The
nature and value of the Quarterly Services;
●
market
reference price; and
●
QYHZ's
operating conditions.
The term
of the Exclusive Business Cooperation Agreement is
twenty years
and is automatically renewable for
one year
. Upon the expiration of each
renewal term, the Exclusive Business Cooperation Agreement can be automatically renewed for one year. In addition, WXZJ shall have the
right to terminate this agreement at any time by giving a three-day notice on the termination of this Agreement.
Based on
the foregoing contractual arrangements, which grant WXZJ effective control of QYHZ and its subsidiaries and obligate WXZJ to absorb all
of the risk of loss from their activities and enable WXZJ to receive all of their expected residual returns, the Company accounts for
QYHZ as a VIE. Accordingly, the Company consolidates the accounts of QYHZ for the periods presented herein, in accordance with Regulation
S-X-3A-02 promulgated by the Securities Exchange Commission ("SEC") and Accounting Standards Codification ("ASC")
810-10, Consolidation.
F-
13
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization (continued)
The following
tables represent the financial information of the consolidated VIE and its subsidiaries as of December 31, 2021 and 2022 before eliminating
the intercompany balances and transactions between the VIE and other entities within the Company:
As of December 31,
2021
2022
2022
RMB
RMB
USD
ASSETS
Current assets
Cash and cash equivalents
71,308
114,478
16,598
Accounts receivable, net
122,480
165,419
23,984
Prepaid expenses and other current assets
157,724
101,684
14,743
Amounts due from related parties
1,052
1,052
153
Amounts due from inter-companies
(1)
139,621
143,968
20,873
Total current assets
492,185
526,601
76,351
Non-current assets
Property and equipment, net
1,312
1,871
271
Intangible assets, net
235,688
418,893
60,734
Goodwill
92,069
172,781
25,051
Deferred tax assets
3,717
3,649
529
Long term deposits and other assets
950
874
127
Long term investments
251,827
381,279
55,280
Right of use assets-operating lease
-
19,209
2,785
Total non-current assets
585,563
998,556
144,777
TOTAL ASSETS
1,077,748
1,525,157
221,128
LIABILITIES
Current liabilities
Accounts payable
64,535
80,564
11,681
Deferred revenue
29,258
62,567
9,071
Accrued salary and employee benefits
13,585
7,942
1,151
Accrued expenses and other current liabilities
5,225
7,014
1,017
Income tax payable
8,801
12,538
1,818
Amounts due to inter-companies
(1)
309,098
389,400
56,458
Current portion of contingent consideration – earn-out liability
10,638
4,336
629
Lease liability-operating lease -current
-
7,174
1,040
Total current liabilities
441,140
571,535
82,865
Non-current liabilities
Deferred tax liabilities
58,746
61,236
8,878
Lease liabilities-operating lease -non-current
-
12,773
1,852
Total non-current liabilities
58,746
74,009
10,730
TOTAL LIABILITIES
499,886
645,544
93,595
(1)
Amount due from/to inter-companies
consist of intercompany receivables/payables to the other companies within the Company.
F-
14
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
1.
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
(d)
Organization (continued)
All revenue-producing
assets recognized by the Company, including trademarks, patents, copyrights and software, that are held by the VIE, please refer to Note
8. There are no unrecognized revenue-producing assets.
Summarized
below is the information related to the financial performance of the VIE reported in the Company's consolidated statements of income
for the years ended December 31, 2020, 2021 and 2022, respectively:
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Net revenues
940,783
1,198,273
1,291,701
187,279
Third party customers
936,551
1,164,317
1,291,602
187,265
Inter-companies
4,232
33,956
99
14
Net income
45,722
102,042
143,651
20,827
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Net cash provided by operating activities
270,927
70,255
155,897
22,603
Net cash used in investing activities
(
323,670
)
(
250,714
)
(
122,236
)
(
17,723
)
Net cash provided by (used in) financing activities
80,247
179,585
(
198
)
(
29
)
F-
15
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of presentation and principles of consolidation
The accompanying
consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP").
The consolidated
financial statements include the financial statements of the Company and its subsidiaries, and its VIE and VIE's subsidiaries over
which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the
primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIE are eliminated
upon consolidation.
(b)
Business combinations
The Company
accounts for all business combinations under the purchase method of accounting in accordance with ASC 805, Business Combinations ("ASC
805"). The purchase method of accounting requires that the consideration transferred to be allocated to net assets including separately
identifiable assets and liabilities the Company acquired, based on their estimated fair value. The consideration transferred in an acquisition
is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments
issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable
to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured
separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of
(i) the total of the cost of the acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously
held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill.
If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference is recognized directly
in earnings. The determination and allocation of fair values to the identifiable net assets acquired and liabilities assumed is based
on various assumptions and valuation methodologies requiring considerable judgment from management. Although the Company believes that
the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results
may differ from forecasted amounts and the differences could be material.
(c)
Use of estimates
The preparation
of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include,
but are not limited to revenue recognition, estimating the useful lives of long-lived assets and intangible assets, valuation assumptions
in performing asset impairment tests of long-lived assets, fair value of warrant liabilities and contingent liability, allowance for doubtful
accounts, and valuation of deferred taxes and deferred tax assets. Actual results could differ from those estimates, and as such, differences
may be material to the consolidated financial statements.
(d)
Foreign currency
The functional
currency of the Company is in US dollars and the functional currency of the Company's subsidiaries and VIEs are Renminbi ("RMB"),
as determined based on the criteria of Accounting Standards Codification ("ASC") 830 ("ASC 830") "Foreign
Currency Matters". The reporting currency of the Company is also the RMB.
Monetary
assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the
rates of exchange in place at the balance sheet date. Transactions in currencies other than the functional currency during the year are
converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains
and losses are recognized in the consolidated statement of operations.
Assets and
liabilities of the Company translated from their respective functional currencies to the reporting currency at the exchange rates at the
balance sheet dates, equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average
exchange rates in effect during the reporting period. The resulting foreign currency translation adjustment are recorded in other comprehensive
income (loss).
F-
16
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Convenience translation
Translations
of balances in the consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB into
USD (or "US$") as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were calculated
at the rate of US$
1.00
= RMB
6.8792
, representing the noon buying rate in The City of New York for cable transfers of RMB as certified
for customs purposes by the Federal Reserve Bank of New York on the last trading day of December 31, 2022. No representation is made that
the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate.
(f) Cash and cash
equivalents
Cash and
cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use and have
original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the
date of purchase are classified as cash equivalents.
(g) Accounts receivable and allowance for
doubtful accounts
Accounts
receivable are stated at the historical carrying amount net of allowance for doubtful accounts. Accounts are considered overdue after 180 days.
The Company
maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company
determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical collection
experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the Company makes
specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible.
The facts and circumstances for each account may require the Company to use substantial judgment in assessing its collectability.
Account
balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not
probable.
(h)
Investment in marketable security
Marketable
securities consist of investments in equity securities with readily determinable fair values. Marketable equity securities that are bought
and held principally for the purpose of selling them in the near term are classified as trading securities, in accordance with ASC 320.
The Company accounts for investments in marketable equity securities with readily determinable fair values in accordance with ASC Topic
321, Investments - Equity Securities ("ASC 321"). These investments are measured at fair value with the related gains and
losses, including unrealized, recognized in investment income (loss).
(i)
Property and equipment
Property
and equipment are stated at cost, net of accumulated depreciation using the straight-line method over their estimated useful lives, once
the asset is placed in service.
The estimated
useful lives are as follows:
Computer and transmission equipment
3
years
Furniture, fixtures and office equipment
5
years
Repair and
maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment
are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related
accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of income. The Company also re-evaluates
the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
F-
17
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
Intangible assets
Intangible
assets are carried at cost less accumulated amortization and any impairment. License for Beelive platform is determined to have an infinite
useful life and is not subject to amortization and tested for impairment at least annually. Intangible assets with a finite useful life
are amortized using the straight-line method over the estimated economic life of the intangible assets as follows:
Trademark
10
years
Patent
10
years
Copyright
10
years
Software
3
to
10
years
Licenses acquired
3
years to infinite life
(k)
Impairment of long-lived assets
The Company
evaluates its long-lived assets or asset group, including property and equipment and intangible assets including license that has an infinite
useful life, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that
will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable.
When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net
cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash
flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying
amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated
by the assets, when the market prices are not readily available for the long-lived assets. No impairment of long-lived assets was recognized
for the years ended December 31 2020, 2021 and 2022.
(l)
Goodwill
Goodwill
represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination.
Goodwill is not subject to amortization but is monitored annually for impairment or more frequently if there are indicators of impairment.
Management considers the following potential indicators of impairment: significant underperformance relative to historical or projected
future operating results, significant changes in the Company's use of acquired assets or the strategy of the Company's overall
business, significant negative industry or economic trends and a significant decline in the Company's stock price for a sustained
period. The Company performs its impairment test on annual basis. Currently, the Company's goodwill is evaluated at the entity level
as it has been determined there is one operating segment comprised of one reporting unit. When assessing goodwill for impairment
the Company first performs a qualitative assessment to determine whether it is necessary to perform a quantitative analysis. If the Company
determines it is unlikely that the reporting unit fair value is less than its carrying value then no quantitative assessment is performed.
If the Company cannot determine that it is likely that the reporting unit fair value is more than its carrying value, then the Company
performs a quantitative assessment. Based on the qualitative assessment performed for the year ended December 31, 2022, the Company determined
it was unlikely that it's reporting unit fair value was less than its carrying value and no quantitative assessment was required.
F-
18
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m)
Long term investment
ASU 2016-01
("ASU 2016-01"), Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition,
measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted
for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through
earnings, unless they qualify for a measurement alternative. The Company adopted the new financial instruments accounting standard from
January 1, 2020.
Equity
Investments with Readily Determinable Fair Values
Equity investments
with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in
active markets at the reporting date.
Equity
investments without readily determinable fair values
After the
adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values and
not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring
basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity
investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.
Equity
investments accounted for using the equity method
The Company
accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control,
using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share
of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary
impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the
entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination,
particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes
in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified
impairment is other-than-temporary.
F-
19
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)
Fair value of financial instruments
Fair value
is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants
would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance
with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:
●
Level 1 — inputs to the
valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●
Level 2 — inputs to the
valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical
or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated
by observable market data.
●
Level 3 — inputs to the
valuation methodology are unobservable.
The carrying
amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, other receivables included in prepaid
expenses and other current assets, accounts payables, balances with related parties and other current liabilities, approximate their fair
values because of the short-term maturity of these instruments.
Assets and Liabilities Measured or Disclosed
at Fair Value on a recurring basis
The following tables represent the fair value
hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2022:
As of December 31, 2021
Fair Value Measurement at the Reporting Date using
Quoted price
in active
markets for
identical
assets
Level 1
Significant
other
observable
inputs
Level 2
Significant
unobservable
inputs
Level 3
Total
Financial assets:
Investment in marketable equity security
¥
38,789
-
-
¥
38,789
Financial liabilities:
Earn-out liability from BeeLive acquisition
-
-
10,638
10,638
Warrants liabilty
10,324
10,324
Total
¥
-
¥
-
¥
20,962
¥
20,962
F-
20
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)
Fair value of financial instruments (continued)
As of December 31, 2022
Fair Value Measurement at the Reporting Date using
Quoted price
in active
markets for
identical
assets
Level 1
Significant
other
observable
inputs
Level 2
Significant
unobservable
inputs
Level 3
Total
Financial assets:
Investment in marketable equity security
¥
40,548
¥
40,548
Financial liabilities:
Earn-out liability from BeeLive acquisition
¥
-
¥
-
¥
-
¥
-
Earn-out liability from Weiliantong acquisition
-
-
4,336
4,336
Warrant liability
166
166
Total
¥
-
¥
-
¥
4,502
¥
4,502
Contingent
consideration – earn-out liability
(i)
Earn-out liability from SPAC transaction
In
connection with SPAC transaction, the previous shareholders of Scienjoy Inc. may be entitled to receive earnout shares as follows:
(1) if Scienjoy Inc.'s net income before tax for the year ended December 31, 2020 is greater than or equal to either
US$
28,300,000
or RMB
190,000,000
, the previous owners of Scienjoy Inc will be entitled to receive
3,000,000
Class A ordinary shares
of the Company ("SPAC Earn-out Target 2020"); and (2) if Scienjoy Inc.'s net income before tax for the year ended
December 31, 2021 is greater than or equal to either US$
35,000,000
or RMB
235,000,000
, the previous owners of Scienjoy Inc. will be
entitled to receive
3,000,000
Class A ordinary shares of the Company ("SPAC Earn-out Target 2021"). Notwithstanding, the previous
owners of Scienjoy Inc. otherwise will receive (i)
3,000,000
earn-out shares if the
share price of the Company is higher than $
20.00
for any sixty days in any period of ninety consecutive trading days between May 8,
2021 and May 7, 2022, and (ii)
3,000,000
earnout shares if the share price of the Company is higher than $
25.00
for any sixty days
in any period of ninety consecutive trading between May 8, 2022 and May 7, 2023. For the years ended December 31, 2020 and 2021, the SPAC Earn-out Target 2020 and 2021 were met and the Company
issued an aggregated of
6
million earn-out shares accordingly (Note 15).
Upon the
closing of the SPAC Transaction, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from May 8, 2020 to December 31, 2021 in earnings. The Company determined the fair value of the
contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair
value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate,
to generate individual stock price paths. The major assumptions used in the binomial model are as follows:
May 7,
2020
December 31,
2020
December 31,
2021
Risk-free interest rate
0.14
%
0.10
%
0.38
%
Share price
$
8.92
$
8.66
$
5.68
Probability
20
% -
50
%
10
%
20
%-
50
%
F-
21
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)
Fair value of financial instruments (continued)
(ii)
Earn-out liability from BeeLive acquisition
In connection
with the acquisition of Beelive (Note 4), the previous shareholders of BeeLive may be entitled to receive earnout shares as follows: (i)
if the BeeLive Company's total annual revenue is no less than RMB
336.6
million in Year 2020,the previous shareholder will be entitled
to received additional
540,960
Class A ordinary shares ("Beelive Earn-out Target 2020"); (ii) if the BeeLive Companies'
total annual revenue is no less than RMB
460.6
million in Year 2021 ("Beelive Earn-out Target 2021"), the previous shareholder
will be entitled to received additional
540,960
Class A ordinary shares; and (iii) if the BeeLive Companies' total annual revenue
is no less than RMB
580.9
million in Year 2022 ("Beelive Earn-out Target 2022"), the previous shareholder will be entitled
to received additional
540,960
Class A ordinary shares. If the total annual revenue of BeeLive Company in a particular performance year
does not reach the target revenue as specified above, but is equal to or more than
80
% of the target revenue, the previous shareholder
will be entitled to a reduced number of the earn-out shares. For the years ended December 31, 2020, 2021 and 2022, the Beelive Earn-out Target 2020, 2021 and 2022 were met
and the Company issued the related earn-out shares accordingly (Note 15).
Upon the
closing of the BeeLive acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value from the acquisition date to December 31, 2022 in earnings. The Company determined the fair value
of the contingent consideration using binomial model, which includes significant unobservable inputs that are classified as level 3 in
the fair value hierarchy. A binomial model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend
rate, to generate individual stock price paths. The major assumptions used in the binomial model are as follows:
August 10,
2020
December 31,
2020
December 31,
2021
December 31,
2022
Risk-free interest rate
0.12
-
0.14
%
0.11
% -
0.13
%
0.38
%
4.73
%
Share price
$
6.2
$
8.66
$
5.68
$
1.97
Probability
20
% -
50
%
20
% -
50
%
20
% -
50
%
20
%-
50
%
(iii) Earn-out
liability from Weiliantong acquisition
In connection
with the acquisition of Weiliantong (Note 4), the previous shareholders of Weiliantong may be entitled to receive earnout shares as follows:
(i) if the Weiliantong Company's total annual revenue is no less than RMB
280,000
in 2022, the previous shareholder will be entitled
to received additional
10
% of consideration( Class A ordinary shares) ("Weiliantong Earn-out Target 2022"); (ii) if Weiliantong
total annual revenue is no less than RMB
360,000
in Year 2023, the previous shareholder will be entitled to received additional
10
% of
consideration (Class A ordinary shares); If the total annual revenue of Weiliantong Company in a particular performance year does not
reach the target revenue as specified above, but is equal to or more than
80
% of the target revenue, the previous shareholder will be
entitled to a reduced number of the earn-out shares. For the years ended December
31, 2022, the Weiliantong Earn-out Target 2022 was met and the Company issued the related earn-out shares accordingly (Note 15).
Upon the
closing of the Weiliantong acquisition, the Company recorded the fair value of the contingent consideration resulted from earn-out liability
and recorded the changes in fair value in earnings. The Company determined the fair value of the contingent consideration using binomial
model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial model uses
random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual stock price
paths. The major assumptions used are as follows:
January 1,
2022
December 31,
2022
Risk-free interest rate
0.39
-
0.73
%
4.73
%
Share price
$
5.13
$
1.97
Probability
20
% -
50
%
20
% -
50
%
F-
22
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)
Fair value of financial instruments (continued)
The Company
measures contingent consideration – earn-out liability at fair value on a recurring basis as of the dates of acquisition and December
31, 2021 and 2022. The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring
basis:
As of December
31, 2021, the earn-out liability related to SPAC Earn-out Target 2021 and Beelive Earn-out Target 2021 were met. As a result, the Company
classified the related portion of earn-out liability in aggregated of RMB
128,119
as shares to be issued in the equity of the Company.
As of December 31, 2021, there was
3,540,960
earn-out shares required to be issued and the Company included it in the calculation
of earnings per share, which was fully issued on June 8, 2022.
As of
December 31, 2022,
Beelive has achieved 93.87% of the Beelive Earn-out Target 2022 and Weiliantong has achieved 100% of Weiliantong
Earn-out Target 2022. As a result, the Company classified the related portion of earn-out liability in aggregated of
RMB13,106 as shares to be issued in the equity of the Company. As of December 31, 2022, there was 995,118 earn-out
shares required to be issued and the Company included it in the calculation of earnings per share. Upon issuance of this report, a
total of 507,804 shares (540,960 * 93.87%) has been issued to Cosmic Soar, the
previous shareholder of Beelieve and a total of 487,314 share has been issue to Wolter Global, the previous shareholder of
Weilingtong.
The Company
did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2020, 2021 and 2022. The following
is a reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) during the years ended December 31, 2020, 2021 and 2022:
Balance
Balance at January 1, 2020
¥
-
Contingent consideration resulting from SPAC Transaction
266,828
Contingent consideration resulting from BeeLive acquisition
39,755
Fair value change
14,068
Exchange difference
(
13,252
)
Reclassification to shares to be issued
(
200,100
)
Balance at December 31, 2020
¥
107,299
Fair value change
33,584
Exchange difference
(
2,126
)
Reclassification to shares to be issued
(
128,119
)
Balance at December 31, 2021
¥
10,638
Contingent consideration resulting from Weiliantong acquisition
19,875
Fair value change
(
13,071
)
Reclassification to shares to be issued
(
13,106
)
Balance at December 31, 2022
¥
4,336
Less: Contingent consideration – earn-out liability – non-current portion
-
Contingent consideration – earn-out liability –current portion
¥
4,336
The aggregated
contingent considerations for the earn-out liabilities were approximate RMB
10.6
million and RMB
4.3
million as of December 31, 2021
and 2022, respectively. The balance of contingent consideration for the earn-out liabilities are classified as current liability due to
short term nature.
F-
23
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)
Fair value of financial instruments (continued)
Warrant liabilities
The Company's
warrants assumed from SPAC acquisition on May 7,2020, the date of the closing of SPAC Transaction, that have complex terms, such as a
clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash upon
a fundamental transaction that is considered outside of the control of management are considered to be a derivative as contemplated in
ASC 815-40. The warrant is recorded as derivative liability on the consolidated balance sheet upon the SPAC transaction and is adjusted
to its fair value at the end of each reporting period, with the change being recorded as other expense or gain in accordance with ASC
820.
The warrant
liabilities were measured and recorded on a recurring basis. The Company determined the fair value of the contingent consideration using
binomial model, which includes significant unobservable inputs that are classified as level 3 in the fair value hierarchy. A binomial
model uses random numbers, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual
stock price paths. The major assumptions used in the binomial model are as follows:
May 7,
2020
December 31,
2020
December 31,
2021
December 31,
2022
Risk-free interest rate
0.23
%
0.18
%
0.75
%
4.70
%
Share price
$
8.92
$
8.66
$
5.68
$
1.97
Volatility
37
%
38
%
53
%
68
%
The following table
sets forth the establishment of the Company's Level 3 warrant liabilities, as well as a summary of the changes in
the fair value:
Balance
Balance at January 1, 2020
¥
-
Warrant liabilities resulting from SPAC Transaction
36,121
Fair value change
(
3,904
)
Exchange difference
(
2,659
)
Balance as of December 31, 2020
¥
29,558
Fair value change
(
16,421
)
Exercised
(
115
)
Exchange difference
(
2,698
)
Balance as of December 31, 2021
¥
10,324
Fair value change
(
10,776
)
Exchange difference
618
Balance as of December 31, 2022
¥
166
F-
24
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o)
Revenue recognition
On January
1, 2019, the Company adopted ASC 606, "Revenue from Contracts with Customers" using the modified retrospective method applied
to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented
under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic
accounting under Topic 605. Based on the Company's assessment, the adoption of ASC 606 did not result in any adjustment on the Company's
consolidated financial statements, and there were no material differences between the Company's adoption of ASC 606 and its historic
accounting under ASC 605.
Revenues
are recognized when control of the promised virtual items or services is transferred to the Company's customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those virtual items or services. Revenue is recorded,
net of sales related taxes and surcharges.
Live
streaming
The Company
is principally engaged in operating its own live streaming platforms, which enable broadcasters and viewers to interact with each other
during live streaming. The Company is responsible for providing a technological infrastructure to enable the broadcasters, online users
and viewers to interact through live streaming platforms. All the platforms can be accessed for free. The Company mainly derives the revenue
from sales of virtual items in the platforms. The Company has a recharge system for users to purchase the Company's virtual currency
then purchase virtual items for use. Users can recharge via various online third-party payment platforms, including WeChat Pay, AliPay
and other payment platforms. Virtual currency is non-refundable and often consumed soon after it is purchased.
The Company
designs, creates and offers various virtual items for sales to users with pre-determined stand-alone selling price. Virtual items are
categorized as consumable and time-based items. Consumable items are consumed upon purchase and use while time-based items could be used
for a fixed period of time. Users can purchase and present consumable items to broadcasters to show support for their favorite broadcasters,
or purchase time-based virtual items for one or multiple months for a monthly fee, which provide users with recognized status, such as
priority speaking rights or special symbols over a period of time.
The Company
shares a portion of the sales proceeds of virtual items ("revenue sharing fee") with broadcasters and talent agencies in accordance
with their revenue sharing arrangements. Broadcasters, who do not have revenue sharing arrangements with the Company, are not entitled
to any revenue sharing fee. The Company also utilizes third-party payment collection channels, which charges the payment handling cost
for users to purchase the virtual currency directly from it. The payment handling costs are recorded in cost of sales.
The Company
evaluates and determines that it is the principal and views users to be its customers, because the Company controls the virtual items
before they are transferred to users. Its control is evidenced by the Company's sole ability to monetize the virtual items before
they are transferred to users, and is further supported by the Company being primarily responsible to the users for the delivery of the
virtual items as well as having full discretion in establishing pricing for the virtual items. Accordingly, the Company reports live streaming
revenues on a gross basis with the amounts billed to users recorded as revenues and revenue sharing fee paid to broadcasters and related
agencies recorded as cost of revenues.
Sales proceeds
are initially recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. The Company has determined
that each individual virtual item represents a distinct performance obligation. Accordingly, live streaming revenue is recognized immediately
when the consumable virtual item is used, or in the case of time-based virtual items, revenue is recognized over the fixed period on a
straight-line basis. The Company does not have further obligations to the user after the virtual items are consumed. The Company's
live streaming virtual items are generally sold without right of return and the Company does not provide any other credit and incentive
to its users. Unconsumed virtual currency is recorded as deferred revenue.
The Company
also cooperates with independent third-party distributors to sell virtual currency through annual distribution agreements with these distributors.
Third-party distributors purchase virtual currency from the Company with no refund provision according to the annual distribution agreements,
and they are responsible for selling the virtual currency to end users. They may engage their own sales representatives, which are referred
to as "sales agents" to directly sell to individual end users. The Company has no control over such "sales agents".
The Company has discretion to determine the price of the virtual currency sold to its third-party distributors, but has no discretion
as to the price at which virtual currency is sold by its third-party distributors to the sales agents.
F-
25
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o)
Revenue recognition (continued)
Technical
Services and others
The Company
generated technical revenues from providing technical development, advisory and others, which accounts for only approximately
1
%
or less of revenue for the years ended December 31, 2020, 2021 and 2022. As the amount was immaterial, and short-term in nature, which
is usually less than six months, the Company recognizes revenue when service were rendered and accepted by customers.
Practical
expedients and exemptions
The Company's
contracts have an original duration of one year or less. Accordingly, the Company does not disclose the value of unsatisfied performance
obligations.
Revenue
by types and platforms
The following
table sets forth types of our revenue for the periods indicated:
For the years ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Live streaming - consumable virtual items revenue
1,187,431
1,617,056
1,886,179
273,470
Live streaming - time based virtual item revenue
29,596
32,905
27,683
4,014
Technical services and others
5,156
19,397
39,395
5,712
Total revenue
1,222,183
1,669,358
1,953,257
283,196
As of December
31, 2022, we operated five brands of live streaming platforms, consisting of: Showself Live Streaming, Lehai Live Streaming, Haixiu Live
Streaming, BeeLive Live Streaming (including BeeLive Chinese version – Mifeng) and Hongle Live Streaming. The following table sets
forth our revenue by platforms for the periods indicated:
For the years ended December 31,
2020
2021
2022
2022
Amounts in thousands of RMB and USD
RMB
RMB
RMB
USD
Showself
549,763
595,004
521,155
75,561
Lehai
180,112
242,910
241,851
35,065
Haixiu
321,468
326,661
317,953
46,099
Beelive
165,684
485,386
545,296
79,060
Hongle
-
-
287,607
41,699
Technical services and others
5,156
19,397
39,395
5,712
TOTAL
1,222,183
1,669,358
1,953,257
283,196
Contract
balances
Contract
balances include accounts receivable and deferred revenue. Accounts receivable primarily represent cash due from distributors and are
recorded when the right to consideration is unconditional. The allowance for doubtful accounts reflects the best estimate of probable
losses inherent to the account receivable balance. Deferred revenue primarily includes unconsumed virtual currency and unamortized revenue
from time-based virtual items in the Company's platforms, where there is still an obligation to be provided by the Company, which
will be recognized as revenue when all of the revenue recognition criteria are met. Due to the generally short-term duration of the relevant
contracts, all performance obligations are satisfied within one year.
F-
26
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p)
Government subsidies
Government
subsidies are primarily referred to the amounts received from various levels of local governments from time to time which are granted
for general corporate purposes and to support its ongoing operations in the region. The grants are determined at the discretion of the
relevant government authority and there are no restrictions on their use. The government subsidies amounted to RMB
111
, RMB
67
, RMB
10,094
(US$
1,464
) for the years ended December 31, 2020, 2021 and 2020 are recorded as other income.
(q)
Cost of revenues
Amounts
recorded as cost of revenue relate to direct expenses incurred in order to generate revenue. Such costs are recorded as incurred. Cost
of revenues consists primarily of (i) revenue sharing fees and content costs, including payments to various broadcasters, and content
providers, (ii) bandwidth costs, (iii) salaries and welfare, (iv) depreciation and amortization expense for servers and other equipment,
and intangibles directly related to operating the platform, (v) user acquisition costs (vi) payment handling costs, and (vii) other costs.
(r)
Research and development expenses
Research
and development expenses primarily consist of (1) salaries and benefits expenses incurred for research and development personnel, and
(2) rental, general expenses and depreciation expenses associated with the research and development activities. Expenditures incurred
during the research phase are expensed as incurred and no research and development expenses were capitalized as of December 31, 2021 and
2022.
(s)
Sales and marketing expenses
Sales and
marketing expenses consist primarily of advertising and market promotion expenses. The advertising and market promotion expenses amounted
to RMB
9,588
, RMB
4,794
and RMB
2,118
(US$
307
) for the years ended December 31, 2010, 2021 and 2022, respectively.
(t)
Employee benefits
The full-time
employees of the Company's PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment
insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these
benefits based on certain percentages of the employees' respective salaries, subject to certain ceilings, in accordance with the
relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such
employee benefits were RMB
5,797
, RMB
14,370
and RMB
19,261
(US$
2,793
) for the years ended December 31, 2020, 2021 and 2022, respectively.
(u)
Leases
The Company
adopted Topic 842 on January 1, 2022 using the modified retrospective transition approach. The Company has lease contracts office space
under operating leases. The Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use
assets on its consolidated balance sheets at lease commencement. The Company measures its lease liabilities based on the present value
of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental
borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease
payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of weighted average interest
rate of its own bank loans. The Company measures right-of-use assets based on the corresponding lease liability adjusted for payments
made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing
lease expense when the lessor makes the underlying asset available to the Company.
For leases
with lease term less than one year (short-term leases), the Company records operating lease expense in its consolidated statements of
operations on a straight-line basis over the lease term and record variable lease payments as incurred.
F-
27
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v)
Income taxes
The Company
accounts for current income taxes in accordance with the laws of the relevant tax authorities. The Company follows the liability method
in accounting for income taxes in accordance to ASC topic 740 ("ASC 740"), Income Taxes. Under this method, deferred tax assets
and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted
tax rates that will be in effect in the period in which the differences are expected to reverse. A valuation allowance would be recorded
against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the
deferred tax assets will not be realized.
The guidance
on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. Guidance was also provided on recognition of income tax assets and liabilities,
classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions,
accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Company's
uncertain tax positions and determining its provision for income taxes. The Company recognizes interests and penalties, if any, under
accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive loss. The
Company did not recognize any interest and penalties associated with uncertain tax positions as of December 31, 2021 and 2022. As of December
31, 2021 and 2022, the Company did not have any significant unrecognized uncertain tax positions.
(w)
Value added tax ("VAT")
Revenue
represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to
13
%, depending
on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against
their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in tax payable. All of the VAT returns filed
by the Company's subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the
date of filing.
(x)
Statutory reserves
The Company's
PRC entities are required to make appropriations to certain non-distributable reserve funds.
In accordance
with the laws applicable to China's Foreign Investment Enterprises, the Company's subsidiaries registered as WFOEs have to
make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by
the Ministry of Finance of the People's Republic of China ("PRC GAAP") to reserve funds including general reserve fund
and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least
10
% of the after-tax profits calculated
in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached
50
% of the registered capital of the Company.
Appropriation to the staff bonus and welfare fund is at the Company's discretion.
In addition,
in accordance with the Company Laws of the PRC, the Company's entities registered as PRC domestic companies must take appropriations
from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a
discretionary surplus fund. The appropriation to the statutory surplus fund must be at least
10
% of after-tax profits as determined
under the PRC GAAP. Appropriation is not required if the surplus fund has reached
50
% of the registered capital of the Company. Appropriation
to the discretionary surplus fund is made at the discretion of the Company.
The use
of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the off-setting of losses or increasing
capital of the respective company. The staff bonus and welfare fund is liability in nature and is restricted to fund payments of special
bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the Company in terms
of cash dividends, loans or advances, nor can they be distributed except under liquidation.
F-
28
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(y)
Earnings per share
The Company
computes earnings per share ("EPS") in accordance with ASC 260, "Earnings per Share". ASC 260 requires companies
to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the
period. Diluted EPS presents the dilutive effect on a per share basis of the potential common shares (e.g., convertible securities, options
and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares
that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation
of diluted EPS. Contingently issuable shares were not included in the computation of diluted shares outstanding if they were not
issuable should the end of the reporting period have been the end of the contingency period. For the years ended December 31, 2020, there
was
3,540,960
contractual issuable shares related to SPAC and Beelive Earn-out Target 2020 achieved as of December 31, 2020,
which was fully issued for the year ended December 31, 2020. For the years ended December 31, 2021, there was
3,540,960
contractual
issuable shares related to SPAC and Beelive Earn-out Target 2021 achieved as of December 31, 2021, which was fully issued in the year
ended December 31, 2022. For the year ended December 31, 2022, there was
995,118
contractual issuable shares related to Beelive Earn-out
and Weiliantong Earn-out Target 2022 achieved as of December 31, 2022, and
636,691
contractual issuable shares related to Weiliantong
acquisition.
(z)
Non-controlling interests
As of December
31, 2022, non-controlling interests represent
49
% non-controlling shareholders' interests in HCHY. The non-controlling interests
are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling
interests in the operating results of the Company are presented on the face of the consolidated statements of comprehensive income (loss)
as an allocation of the total income or loss between non-controlling interest holders and the shareholders of the Company.
(aa)
Segment reporting
The Company
follows ASC 280, "
Segment Reporting."
The Company's Chief Executive Officer or chief operating decision-maker
reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company
as a whole and hence, the Company has only one reportable segment. As the Company's long-lived assets are substantially all located
in the PRC and substantially all the Company's revenues are derived from within the PRC, no geographical segments are presented.
(bb)
Recent accounting pronouncements
In February
2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset and a corresponding
lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating
leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating
section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization
of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will
be classified as a financing activity while the interest component will be included in the operating section of the statement of cash
flows. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective
approach to adoption. Early adoption is permitted. In September 2017, the FASB issued ASU No. 2017-13, which to clarify effective dates
that public business entities and other entities were required to adopt ASC Topic 842 for annual reporting. A public business entity that
otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial
statements or financial information in another entity's filing with the SEC adopting ASC Topic 842 for annual reporting periods
beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. ASU
No. 2017-13 also amended that all components of a leveraged lease be recalculated from inception of the lease based on the revised after-tax
cash flows arising from the change in the tax law, including revised tax rates. The difference between the amounts originally recorded
and the recalculated amounts must be included in income of the year in which the tax law is enacted. In November 2019, the FASB issued
ASU No. 2019-10, by which to defer the effective date for all other entities by an additional year. As an emerging growth company, the
Company has not early adopted this update and it will become effective on January 1, 2021. In June 2020, the FASB issued ASU No. 2020-05,
"Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities" ("ASU
2020-05") in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides
a limited deferral of the effective dates for implementing previously issued ASU 606 and ASU 842 to give some relief to businesses and
the difficulties they are facing during the pandemic. ASU 2020-05 affects entities in the "all other" category and public
Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the "all other"
category may defer to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December
15, 2022. The Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2022
.
F-
29
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(bb)
Recent accounting pronouncements (continued)
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments
— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires the Company to measure
and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018,
April 2019 and May 2019, the FASB issued ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments —
Credit Losses," "ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses,"
"Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," and "ASU No. 2019-05, Financial Instruments
— Credit Losses (Topic 326): Targeted Transition Relief," which provided additional implementation guidance on the previously
issued ASU. The ASU is effective for fiscal years beginning after Dec. 15, 2019 for public business entities that meet the definition
of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC. All other entities, ASU No. 2016-13 is effective for fiscal
years beginning after December 15, 2022. The adoption of this guidance will not have a material impact on the Company's consolidated
financial statements.
In October
2018, the FASB issued ASU No. 2018-17 ("ASU 2018-17"), Consolidation (Topic 810): Targeted Improvements to Related Party Guidance
for Variable Interest Entities. The updated guidance requires entities to consider indirect interests held through related parties under
common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making
fee is a variable interest. The amendments in this update are effective for non-public business entities for fiscal years beginning after
December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted. These amendments
should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.
The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In December
2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, to simplify the accounting
for income taxes. The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology
for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also
simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions
that result in a step-up in the tax basis of goodwill. This ASU will become effective for the Company's annual and interim periods
beginning in January 1, 2021, and early adoption is permitted. The adoption of this guidance did not have a material impact on the Company's
consolidated financial statements.
In January
2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic
323), and Derivatives and Hedging (Topic 815) ("ASU 2020-01"), which is intended to clarify the interaction of the accounting
for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting
for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning
January 1, 2021. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In August
2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging –
Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06"). ASU 2020-06 simplifies the guidance for certain
financial instruments with characteristics of both debt and equity, including convertible instruments and contracts on an entity's
own equity, by reducing the number of accounting models for convertible instruments. It also amends guidance in ASC Topic 260, Earnings
Per Share, relating to the computation of earnings per share for convertible instruments and contracts on an entity's own equity.
ASU 2020-06 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2021, with early adoption
permitted for fiscal years that begin after December 15, 2020. The adoption of this guidance did not have a material impact on the Company's
consolidated financial statements.
In October
2021, the FASB issued ASU No. 2021-08, "'Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities
from Contracts with Customers" ("ASU 2021-08"). This ASU requires entities to apply Topic 606 to recognize and measure
contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination
by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and
revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after
December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company does not expect
the adoption of ASU 2021-04 will have a material effect on the consolidated financial statements.
Except for
the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated
financial position, statements of operations and cash flows.
F-
30
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
3.
CONCENTRATION OF RISK
(a)
Credit risk
Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash
equivalents, accounts receivable, other receivables included in prepaid expenses, other current assets, and amounts due from related
parties. As of December 31, 2021 and 2022, RMB
238,792
and RMB
172,514
(US$
25,012
), respectively, were deposited with major
financial institutions located in the PRC. There is a RMB
500,000
deposit insurance limit for a legal entity's aggregated
balance at each mainland PRC bank, and the bank deposits with financial institutions in the Hong Kong Special Administrative Region
are insured by the government authority up to HKD
500,000
. Management believes that these financial institutions are of high credit
quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are
secure due to the state policy on protecting depositors' interests.
For the
credit risk related to accounts receivable, the Company performs ongoing credit evaluations of its customers. The Company establishes
an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific customers and other information.
The allowance amounts were immaterial for all periods presented.
(b)
Currency convertibility risk
Substantially
all of the Company's businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994,
the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People's Bank
of China. However, the unification of the exchange rates does not imply the convertibility of RMB (
¥
)
into US$ ($) or other foreign currencies. All foreign exchange transactions continue to take place either through the People's Bank
of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China.
Approval of foreign currency payments by the People's Bank of China or other institutions requires submitting a payment application
form together with suppliers' invoices, shipping documents and signed contracts.
(c)
Significant customers
For the
years ended December 31, 2020 and 2021, no customer individually represents greater than
10%
of the total revenue. For the year ended
December 31, 2022,
one
customer accounted for
11.2%
of the Company's total revenue.
(d)
Significant suppliers
For the
year ended December 31, 2020,
one
vendor accounted for
30.8
% of the Company's total purchases and
three
vendors accounted for
13.1
%,
10.4
%
and
10.0
% of the Company's accounts payable as of December 31, 2020. For the year ended December 31, 2021,
one
vendor accounted
for
19.6
% of the Company's total purchases and
one
vendor accounted for
10.9
% of the Company's accounts payable
as of December 31, 2021. For the year ended December 31, 2022, no vendor accounted for greater than
10
% of the Company's total purchases
and no vendor accounted for greater than
10
% of the Company's accounts payable as of December 31, 2022.
F-
31
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
4.
ACQUISITION
4.1 Acquisition
of Weiliantong
On December
29, 2021, the Company entered into an Equity Acquisition Framework Agreement (the "Framework Agreement") with Golden Shield
Enterprises Limited ("Golden Shield"), Beijing Weiliantong Technology Co., Ltd. ("Weiliantong"), Tianjin Yieryi Technology
Co., Ltd. ("Yieryi"), Wolter Global Investment Limited ("Wolter Global") and Qingdao Weilaijin Industry Investment
Fund Partnership (Limited Partnership) ("Weilaijin"), which is one of the shareholders of Yieryi. Pursuant to the Framework
Agreement, the Company, or its affiliates designated by the Company, acquires all of the outstanding equity interests of (i) Weiliantong
from its shareholder Yieryi and (ii) Golden Shield from Wolter Global (the "Acquisitions"). Yieryi and
Wolter Global are under common control.
Pursuant
to the Framework Agreement, the Acquisition requires both cash and share considerations (the "Considerations"). The Company
is required to pay RMB
180,000
in its Class A ordinary shares, consisting of
(1) the shares consideration of RMB20,800 to Weilaijin (the
"Weilaijin Share Consideration"), a shareholder of Yieryi, and (ii) the shares consideration of RMB159,200 in its Class
A ordinary shares to Wolter Global (the "Wolter Global Share Consideration"), including 20% of the Wolter Global Share Consideration
are subject to certain performance conditions (i.e., earn-out provisions) and requirements over the following two years (earn-out arrangement).
The Company is also required to pay cash consideration of RMB
13,800
cash to Yieryi. The total fair value of the Considerations was determined
at RMB
181,958
, based on a valuation performed by an independent valuation firm engaged by the Company.
In addition,
the Company is required to repay Weilianton's loan payable in aggregated of RMB
86,200
on behalf of Weilianton, consisting of
RMB
77,400
loans payable to Yieryi and RMB
8,800
loan payable to a third party.
The objective
of the Acquisition is to support the Company's strategic growth initiative of acquiring the top-tier online live streaming platform
Hongle.tv and expanding the NFT business scope. The Acquisition was closed on January 1, 2022.
The Acquisition
was accounted for as business combination in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not
material. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition
date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent
valuation firm engaged by the Company.
Amount
RMB
USD
Cash acquired
9,497
1,377
Accounts receivable, net
937
136
Prepaid expenses and other current assets
893
129
Deferred tax assets-current
6,163
894
17,490
2,536
Property and equipment, net
163
24
Intangible assets, net
190,021
27,550
Long term deposits and other non-current assets
136
20
Goodwill
75,742
10,982
Total assets
283,552
41,112
Current liabilities
101,594
14,730
Total liabilities
101,594
14,730
Total consideration
181,958
26,382
F-
32
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
4.
ACQUISITION (CONTINUED)
4.1 Acquisition
of Weiliantong (continued)
The intangible
assets are mainly attributable to Trademark and license as well as software acquired through the acquisition, which are generally amortized
over
5
-
10
years, except that the license acquired for Weiliantong platform is determined to have an infinite useful life and
is not subject to amortization.
Weiliantong
began its business since 2015. The following table summarizes unaudited pro forma results of operations for the year ended December 31,
2021, assuming that acquisition of Weiliantong occurred as of January 1, 2021. The pro forma results have been prepared for comparative
purpose only based on management's best estimate and do not purport to be indicative of the results of operations which actually
would have resulted had the acquisitions occurred as of the beginning of period:
For the
Year ended
December 31,
2021
For
the
Year ended
December 31,
2021
RMB
USD
Pro forma revenue
1,860,448
269,740
Pro forma gross profit
332,864
48,261
Pro forma income from operations
179,664
26,049
Pro forma net income
184,552
26,758
4.2 Acquisition
of Chuangda Huizhi
In January
2022, SG consummated the acquisition of the
100
% equity interest in Chuangda Zhihui (Beijing) Technology Co., Ltd. ("CDZH")
and its wholly owned subsidiary, Beijing Huayi Dongchen Technology Co., Ltd. ("HYDC") from its original shareholders for a
cash consideration of RMB
10
(the "CDZH acquisition"). The consolidated operating results of CDZH for the years ended
December 31, 2021 were not significant to the Company. The Company believes the CDZH acquisition will help to enrich the Company's
product line, expand its user base and capitalize on the growth potential in the live streaming market. The CDZH acquisition was accounted
for as business combination in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not material. The
following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents
the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged
by the Company.
Amount
RMB
USD
Cash acquired
168
24
Accounts receivable, net
97
14
Prepaid expenses and other current assets
15
2
Amounts due from related parties
6,563
952
6,843
992
Intangible assets, net
100
14
Goodwill
4,971
721
Total assets
11,914
1,727
Current liabilities
11,814
1,713
Total liabilities
11,814
1,713
Total consideration
100
14
The intangible
assets are mainly attributable to a license acquired through the acquisition, which are generally amortized over
6
years.
F-
33
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
5.
ACCOUNTS RECEIVABLE, NET
Accounts
receivable and allowance for doubtful accounts consist of the following:
As of December 31,
2021
2022
2022
RMB
RMB
USD
Accounts receivable
208,522
320,203
46,425
Less: allowance for doubtful accounts
(
2,215
)
(
3,546
)
(
514
)
Accounts receivable, net
206,307
316,657
45,911
An analysis
of the allowance for doubtful accounts is as follows:
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Balance, beginning of year
10,266
3,813
2,215
321
Bad debt allowances from acquisition
1,800
-
(
1,459
)
(
212
)
Additions (recovery)
(
8,253
)
(
1,592
)
2,739
397
Exchange difference
-
(
6
)
51
8
Balance, end of year
3,813
2,215
3,546
514
Two unrelated
distributors accounted for
23.7
% and
20.6
% of the Company's accounts receivable as of December 31, 2021, respectively.
Four unrelated distributors accounted for
34.2
%,
14.9
%,
13.9
% and
10.0
% of the Company's accounts receivable as of December
31, 2022, respectively.
F-
34
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
6.
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid
expenses and other current assets consist of the following:
As of December 31,
2021
2022
2022
RMB
RMB
USD
VAT recoverable
12,454
25,004
3,625
Prepaid expense
8,553
9,679
1,403
Prepayment for property and equipment (1)
19,000
34,000
4,930
Investment buyback receivable (2)
30,000
30,000
4,350
Advance to Weiliantong (3)
86,858
-
-
Loan receivable (4)
8,000
15,000
2,175
Other receivables
544
1,487
216
Prepaid expenses and other current assets
165,409
115,170
16,699
(1)
The Company subsequently terminated the related purchases after
December 31, 2022 and the prepayment balance of RMB
34
million was fully refunded and collected by the Company as the date of report.
(2)
The Company invested RMB
30,000
in
Tianjing Yieryi Technology Co., Ltd ("TJ YEY") for its
12
% equity interest on August 17, 2021. As part of the Framework
Agreement signed on December 29, 2021, one of the shareholders of Yieryi bought such equity interest back from the Company for RMB
30,000
.
(3)
The balance represented advance
of RMB
86,858
to Beijing Weiliantong Technology Co., Ltd. ("Weiliantong") related to the acquisition (Note 4),
which was subsequently offset against acquisition consideration.
(4)
On October 20, 2021, the Company lent RMB
8,000
to Jiada Hexin
(Beijing) Technology Co., Ltd for working capital purpose. The loan was from October 20, 2021 to December 31, 2022 with annual interest
rate of
2.4
% from October 20, 2021 to December 31, 2021 and annual interest rate of
6.0
% from January 1, 2022 to December 31, 2022
，
Jiada
Hexin (Beijing) Technology Co., Ltd's another shareholder pledged its
32
% equity interests to the Company. The loan was extended
to December 31, 2023 with annual interest rate of
6.0
% from January 1, 2023 to December 31, 2023.
On April 11, 2022, the Company lent RMB
7,000
to Jiada Hexin (Beijing) Technology Co., Ltd for working capital purpose. The loan was from April 11, 2022 to December 31, 2023 with annual interest rate of
2.4
% from April 11, 2022 to December 31, 2022 and annual interest rate of
6.0
% from January 1, 2023 to December 31, 2023.
7.
PROPERTY AND EQUIPMENT, NET
Property
and equipment, including those held under capital leases, consists of the following:
As of December 31,
2021
2022
2022
RMB
RMB
USD
At cost:
Computer and transmission equipment
7,472
8,953
1,298
Furniture, fixtures and office equipment
584
1,937
281
Total
8,056
10,890
1,579
Less: accumulated depreciation
(
6,382
)
(
8,155
)
(
1,182
)
Property and equipment, net
1,674
2,735
397
For the
years ended December 31, 2020, 2021 and 2022, depreciation expense was RMB
555
, RMB
745
and RMB
1,149
(US$
167
), respectively.
F-
35
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
8.
INTANGIBLE ASSETS
Intangible
assets, consists of the following:
As of December 31,
2021
2022
2022
RMB
RMB
USD
At cost:
Trademark
26,956
50,102
7,264
Patent
122
122
18
Copyright
140
172
25
Software
6,995
9,985
1,448
License acquired
207,600
371,700
53,891
Total
241,813
432,081
62,646
Less: accumulated depreciation
(
5,943
)
(
13,026
)
(
1,889
)
Intangible assets, net
235,870
419,055
60,757
For the
years ended December 31, 2020, 2021 and 2022, amortization expense was RMB
1,749
, RMB
4,090
and RMB
7,038
(US$
1,020
), respectively.
The estimated
annual amortization expense for each of the five succeeding fiscal years is as follow:
Amortization
Amortization
Twelve months ending December 31,
RMB
USD
2023
6,961
1,009
2024
6,961
1,009
2025
6,434
933
2026
5,688
825
2027
5,066
735
Thereafter
16,345
2,370
Total
47,455
6,881
F-
36
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
9.
LONG TERM INVESTMENT
Equity
investments
accounted
for using the
equity
method(ii)
Cost method
investments
without
readily
determinable
fair value(i)
Total
Total
RMB
RMB
RMB
US$
Balance as of January 1, 2021
-
5,000
5,000
785
Additions
75,000
54,725
129,725
20,356
Share of loss in equity method investee
(
2,998
)
-
(
2,998
)
(
470
)
Disposal
-
(
30,000
)
(
30,000
)
(
4,708
)
Impairment
-
-
-
-
Balance as of  December 31, 2021
72,002
29,725
101,727
15,963
Equity
investments
accounted
for using the
equity
method(ii)
Cost method
investments
without
readily
determinable
fair value(i)
Total
Total
RMB
RMB
RMB
US$
Balance as of January 1, 2022
72,002
29,725
101,727
14,748
Additions
75,000
32,000
107,000
15,514
Share of gain in equity method investee
25,449
-
25,449
3,690
Balance as of December 31, 2022
172,451
61,725
234,176
33,952
(i)
Investments of RMB
234,176
included the following items:
Investments of RMB
5,000
represented of
1.76
%
equity investment in the privately-held entity ("Zhejiang Qusu Technology Co., Ltd" or "QS"), in which the Company
does not have significant influence and such investment do not have readily determinable fair values.
On May 27, 2021, the Company invested RMB
10,000
for
4.44
%
equity interest in Qingdao Weilai JingChanye Investment Fund LP ("QD"), in which the Company does not have significant influence
and such investment do not have readily determinable fair values.
On March 8, 2021, the Company invested RMB
8,000
for
13.79
%
equity interest in Jiada Hexin (Beijing) Technology Co., Ltd. ("Jiada"), in which the Company does not have significant influence
and such investment do not have readily determinable fair values.
On December 8, 2021, the Company invested RMB
2,925
for
19.50
%
equity interest in Liujiaoshou Drink Co., Ltd., in which the Company does not have significant influence and such investment do not have
readily determinable fair values.
On December 8, 2021, the Company invested RMB
3,800
for
19.00
%
equity interest in Beijing Dunengmaihuo Culture Media Co., Ltd., in which the Company does not have significant influence and such investment
do not have readily determinable fair values.
On May 6, 2022, the Company signed an investment
agreement to invest up to RMB
5,000
into Valley Hongyuan (Hangzhou) Technology Partnership LP for its
14.28
% equity interest, in which
the Company does not have significant influence and such investment do not have readily determinable fair values. For the year ended December
31, 2022, the Company invested RMB
2,000
into Valley Hongyuan (Hangzhou) Technology Partnership LP.
On December 9, 2022, the Company invested RMB
5,000
for
1.55
% equity interest in Chengdu Tianfu Yuanhe Jingu Venture Capital Center LP, in which the Company does not have significant influence
and such investment do not have readily determinable fair values.
On December 19, 2022, the Company invested RMB
25,000
in Banyou Century (Hangzhou) Technology Co., Ltd. for its
7.6923
% equity interest, in which the Company does not have significant influence
and such investment do not have readily determinable fair values.
(ii)
On October 9, 2021, the Company signed an investment agreement
to invest up to RMB
150,000
into Qingdao Sixiang Zhuohong Private Equity LP ("Qingdao LP"), which further invests in
broadcaster, IT, Big Data, Artificial Intelligence and logistic industry.  The Qingdao LLP is managed by two unrelated general partners
(GPs). The Company, as a Limited partner, neither participate in the daily operation of Qingdao LP, nor has the exclusive rights to control
the partnership meeting and investment decisions. As a result, the Company considers it has significant influence on this investment
based on its voting power. As of December 31, 2021, the Company invested RMB
75,000
into Qingdao LLP. For the year ended December
31, 2022, the Company further invested RMB
75,000
into Qingdao LLP and had shares of gain of RMB
25,449
.
As of December 31, 2022, the Company believes
there was no material market environment change or any other factor that indicating the fair value of the above investments was less than
its carrying value, hence, the Company concluded there is no impairment of the above investments.
F-
37
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
10.
LONG TERM DEPOSITS AND OTHER ASSETS
Long term
deposits and other assets consist of the following:
As of December 31,
2021
2022
2022
RMB
RMB
USD
Rent deposits
418
684
99
Advertising deposits
734
269
39
Long term deposits and other assets
1152
953
138
11.
RIGHT OF USE ASSETS
The Company
has several operating leases for offices. The Company's lease agreements do not contain any material residual value guarantees or
material restrictive covenants.
Effective
January 1, 2022, the Company adopted the new lease accounting standard using a modified retrospective transition method which allowed
the Company not to recast comparative periods presented in its consolidated financial statements. In addition, the Company elected the
package of practical expedients, which allowed the Company to not reassess whether any existing contracts contain a lease, to not reassess
historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected
the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company combines the lease and
non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of
operating lease ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as
of January 1, 2022. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining
lease payments over the lease term.
Total lease
expense for the year ended December 31, 2020, 2021 and 2022 amounted to RMB
5,221
, RMB
5,424
and RMB
6,398
(US$
928
), respectively.
Supplemental
balance sheet information related to operating leases was as follows:
As of December 31,
2022
2022
RMB
USD
Right-of-use assets, net
19,209
2,785
Operating lease liabilities - current
7,174
1,040
Operating lease liabilities - non-current
12,773
1,852
Total operating lease liabilities
19,947
2,892
The weighted
average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2022:
Remaining lease term and discount rate:
Weighted average remaining lease term (years)
2.75
years
Weighted average discount rate
4.75
%
The following
is a schedule of maturities of lease liabilities as of December 31, 2022:
Twelve months ending June 30,
RMB
USD
2023
7,911
1,147
2024
8,360
1,212
2025
4,210
610
2026
707
103
Total future minimum lease payments
21,188
3,072
Less: imputed interest
1,241
180
Present value of lease liabilities
19,947
2,892
F-
38
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
12.
Bank Loan
On August 12, 2022,
the
Company entered into a loan agreement with Bank of Hangzhou to obtain a loan of RMB5,000 (US$725) for a term of one year and at a fixed
rate of 4.5% per annum. The loan was guaranteed by WXZJ.
13.
INCOME TAXES
Enterprise
income tax
British
Virgin Islands
Under the
current laws of the British Virgin Islands, the Company incorporated in the British Virgin Islands is not subject to tax on income or
capital gain. Additionally, the British Virgin Islands does not impose a withholding tax on payments of dividends to shareholders.
Cayman
Islands
Under the
current laws of the Cayman Islands, the subsidiary of the Company incorporated in the Cayman Islands is not subject to tax on income or
capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
Hong
Kong
Under the
current Hong Kong Inland Revenue Ordinance, the subsidiary of the Company in Hong Kong is subject to
16.5
% Hong Kong profit tax on
its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiary incorporated in
Hong Kong to the Company are not subject to any Hong Kong withholding tax.
The PRC
The Company's
subsidiaries and the VIE that are each incorporated in the PRC are subject to Corporate Income Tax ("CIT") on the taxable
income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws
("PRC Income Tax Laws") effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company's PRC subsidiaries
and the VIE are subject to a CIT statutory rate of
25
%.
Under the
PRC Income Tax Laws, an enterprise which qualifies as a High and New Technology Enterprise ("the HNTE") is entitled to a preferential
tax rate of 15% provided it continues to meet HNTE qualification standards on an annual basis. SG qualifies as an HNTE and is entitled
for a preferential tax rate of 15% from 2018 to 2024. HX qualifies as an HNTE and is entitled for a preferential tax rate of 15% from
2017 to 2023. LH qualifies as an HNTE and is entitled for a preferential tax rate of 15% from 2016 to 2024. WLT qualifies as an HNTE and
is entitled for a preferential tax rate of 15% from 2017 to 2023. CX qualifies as an HNTE and is entitled for a preferential tax rate
of 15% from 2018 to 2021. The HNTE certificate of CX expired in July 2021.
Under the
PRC Income Tax Laws, during the period from January 1, 2010 to December 31, 2030, an enterprise which established in region of Holgus
and Kashgar is entitled to a preferential tax rate of 0% in five consecutive years and a preferential tax rate of 9% for the next five
years since the first-year income generated from operations provided it continues to meet the conditions within the required scope.
Holgus X
qualifies for the conditions and entitled for a preferential tax rate of 0% from 2017 to 2021 and a preferential tax rate of 9% from 2022
to 2026. Kashgar Times qualifies for the conditions and entitled for a preferential tax rate of 0% from 2016 to 2020 and a preferential
tax rate of 9% from 2021 to 2025. Holgus H qualifies for the conditions and entitled for a preferential tax rate of 0% from 2020 to 2025
and a preferential tax rate of 9% from 2026 to 2030. Kashgar Lehong qualifies for the conditions and entitled for a preferential tax rate
of 0% from 2020 to 2025 and a preferential tax rate of 9% from 2026 to 2030.
For the years ended December 31, 2020, 2021 and 2022,
total tax saving for the preferential tax rate were RMB
39,876
, RMB
34,561
and RMB
33,892
(US$
4,914
), respectively, the impacts on basic
EPS were RMB
1.7
, RMB
1.1
and RMB
0.7
(US$
0.1
), respectively, and the impacts on dilutive EPS were RMB
1.5
, RMB
1.1
and RMB
0.7
(US$
0.1
),
respectively.
F-
39
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
13.
INCOME TAXES (CONTINUED)
Uncertain
tax positions
The Company
evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based
on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2021 and 2022, the
Company did not have any significant unrecognized uncertain tax positions.
The Company
did not incur any interest or penalty related to potential underpaid income tax expenses for the years ended December 31, 2020, 2021and
2022, and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December
31, 2022.
The income
tax expenses comprise:
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Current income tax expense
5,459
5,285
19,469
2,822
Deferred income tax expense (benefit)
1,945
319
(
1,402
)
(
203
)
Income tax expenses
7,404
5,604
18,067
2,619
A reconciliation
of the differences between the statutory tax rate and the effective tax rate for EIT for the years ended December 31, 2020, 2021 and 2022
is as follows:
For the years ended December 31,
2020
2021
2022
Income tax computed at PRC statutory tax rate
25.0
%
25.0
%
25.0
%
Effect of tax-preferential entities
(
22.2
)%
(
23.2
)%
(
15.9
)%
Non-deductible expenses
1.2
%
1.2
%
(
0.6
)%
Income tax expense
4.0
%
3.2
%
8.5
%
The components
of deferred taxes are as follows:
As of December 31,
2021
2022
2022
RMB
RMB
USD
Deferred tax assets:
Allowance for doubtful accounts
171
630
91
Net operating losses carried forward
4,181
3,707
538
4,352
4,337
629
Based upon
the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are
recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable
income to realize the deferred tax assets for the Company. Thus, there were no valuation allowances as of December 31, 2020, 2021 and
2022 for the deferred tax assets.
The components
of deferred liabilities are as follows:
As of December 31,
2021
2022
2022
RMB
RMB
USD
Deferred tax liabilities
Intangible assets acquired through acquisition
58,746
61,236
8,878
58,746
61,236
8,878
F-
40
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
14.
RELATED PARTY BALANCES AND TRANSACTIONS
In addition
to the information disclosed elsewhere in the financial statements, the principal related parties with which the Company had transactions
during the years presented are as follows:
Name of Related Parties
Relationship with the Company
Mr. He Xiaowu
Chief Executive Officer and Chairman of the Board
Sixiang Times (Beijing) Technology Co., Ltd.
Where the Company's executive is one of the major shareholders
Beijing Junwei Technology Co., Ltd.
Controlling shareholder of SG and HX
Beijing WanPu Century Technology Co Ltd
Subsidiary company of Beijing NQ Mobile Inc., which was holding company of Sixiang Times (Beijing) Technology Co., Ltd
Lavacano Holdings Limited
Where Mr. He Xiaowu acted as director
ENMOLI INC
Where Mr. He Xiaowu acted as director
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)
Controlled by a direct relative of CEO
Chengdu Brightfututure Education Technology Co.,Ltd
Controlled by a direct relative of CEO
For the
years ended December 31, 2020, 2021 and 2022, significant related party transactions were as follows:
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Sixiang Times (Beijing) Technology Co., Ltd.
Rental and service fees
2,106
531
-
-
ENMOLI INC
Interest expense
-
480
-
-
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)
Interest income
-
462
-
-
As of December
31, 2021 and 2022, the amounts due from related parties are as follows:
2021
2022
2022
RMB
RMB
USD
Amount due from related parties
Lavacano Holdings Limited
7
-
-
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)
. (1)
1,052
1,052
153
Chengdu Brightfututure Education Technology Co.,Ltd
-
63
9
Total
1,059
1,115
162
1)
The balance represented loan receivable
balance from Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership). The loan was interest free
and due on December 31, 2022. The loan was collected on March 16, 2023 subsequently.
F-
41
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
15.
SHAREHOLDERS' EQUITY
Ordinary
Shares
The Company
is authorized to issue an unlimited number of no par value Class A ordinary shares and Class B ordinary shares. As of December 31,
2019, there was
2,461,983
Class A ordinary shares remain issued and outstanding. After redemption of
212,633
Class
A ordinary shares prior to the SPAC transaction on May 7, 2020, the number of outstanding Class A ordinary shares became
2,249,350
.
In connection with the SPAC Transaction, the Company issued approximately
19.4
million Class A ordinary shares including
3
million
shares as part of earn-out consideration that was issued to the previous owners of Scienjoy Inc.
At the closing
of the SPAC Transaction, a convertible promissory note of RMB
4,038
(US$
619
) with the related rights previously issued to the shareholder's
of Scienjoy, Inc. was automatically converted into
63,250
Class A ordinary shares.
At the closing
of the SPAC Transaction, the Company issued
402,983
Class A ordinary shares to settle deferred underwriting commission of RMB
14,131
(US$
2,166
) in
connection of the Company's initial public offering on February 8, 2019. The effective conversion price was US$
5.0
per
Class A ordinary shares based on the volume weighted average price of the Company's Class A ordinary shares prior to the SPAC Transaction,
as a result, the fair value of Class A ordinary shares issued approximated the carrying value of deferred underwriting commission payable
settled.
Prior to
the SPAC Transaction, the Company issued certain Public Rights and Private Rights in connection with its previous initial public offering
and private placement. All these outstanding public rights and private rights were converted into
602,000
Class A ordinary shares
upon the completion of the SPAC Transaction.
Prior to
the closing of the SPAC Transaction, the Company issued 533,000 Class A ordinary shares to the financial advisors and underwriter with
fair value of RMB18,713 (US$ 2,868) based on share price of U$5.0 per ordinary share at the time of the transaction.
In connection
of the acquisition of BeeLive, the Company issued
3,786,719
Class A ordinary shares to the original shareholders of BeeLive
as
70
% of total RMB
250
million (or equivalent to RMB
175
million) worth share consideration (Note 4), which was calculated
based on US$
6.68
per share based on the
15
days average closing price of the Company's Class A ordinary shares
prior to the acquisition. The fair value of the shares issued approximated RMB
175
million (US$
26.8
million) as part of
the purchase consideration.
For the
year ended December 31, 2021 the Company issued
108,230
Class A ordinary shares to White Lion Capital LLC. The gross proceeds
were RMB
664,670
.
On November
8, 2021, the Company's 2021 annual general meeting of shareholders (the "AGM") approved the following shareholders'
resolutions:
(i) the adoption of a dual-class share structure, pursuant to which the Company's authorized share capital shall
be re-classified and re-designed into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled
to one (1) vote and each Class B ordinary share being entitled to ten (10) votes at a meeting of the shareholders or on any resolution
of shareholders; and (ii) the authorization to the Company to issue up to 50,000,000 Class A Preferred Shares with such designations,
powers, preferences and relative, participation, optional and other rights, if any, and such qualifications, limitations and restrictions
as the directors may determine among other matters. Additionally, together with the adoption of a dual-class share structure, 2,625,058
Class A ordinary shares held by Heshine Holdings Limited have been converted into 2,625,058 Class B ordinary shares.
In connection
of the acquisition of Weiliantong, the Company issued
3,898,511
Class A ordinary shares to the original shareholders of Weiliantong
as part of total RMB
180,000
(or equivalent to RMB
127
million) worth share worth share consideration (Note 4), which was calculated based
on US$
5.13
per share based on the
20
days average closing price of the Company's Class A ordinary shares prior to
the acquisition. The fair value of the shares issued approximated RMB
127,000
(US$
18,000
) as part of the purchase consideration.
As of December
31, 2022, the Company had
36,684,668
Class A ordinary shares and
2,925,058
Class B ordinary shares issued and outstanding.
F-
42
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
15.
SHAREHOLDERS' EQUITY (CONTINUED)
Treasury
Stock
In October,
2022, the Company repurchased an aggregate of
794,120
Class A ordinary shares at price of $
3.01
per share, which was recorded as treasury
stock. As of December 31, 2022, all these shares were held in an escrow account as reserve solely for potential needed.
Warrants
As of December
31, 2021, there were
6,023,700
warrants outstanding and exercisable, consisting of
5,653,700
public warrants issued in
connection with the Company's initial public offering and
370,000
private warrants issued for a private placement simultaneously
with the closing of the initial public offering. Two warrants are exercisable for one Class A ordinary shares. All these warrants were
issued and outstanding before the SPAC Transaction and no warrants have been exercised for the year ended December 31, 2022.
The Public
Warrants became exercisable upon the completion of the SPAC Transaction on May 7, 2020 with exercise price of US$11.5 per full share.
The Public Warrants will expire five years from February 5, 2019 (or February 5, 2024).
The Company
may call the warrants for redemption (excluding the Private Warrants), in whole and not in part, at a price of $
0.01
per warrant:
●
at any time while the Public
Warrants are exercisable,
●
upon not less than 30 days'
prior written notice of redemption to each Public Warrant holder,
●
if, and only if, the reported
last sale price of the Class A ordinary shares equals or exceeds $
16.50
per share, for any 20 trading days within a 30-trading day
period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and
●
if, and only if, there is a
current registration statement in effect with respect to the issuance of the Class A ordinary shares underlying such warrants at the
time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
If the Company
calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants
to do so on a "cashless basis". The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants
may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization,
merger or consolidation. The Public Warrants may only be exercised for a whole number of shares, meaning that the Public Warrants must
be exercised in multiples of two. However, the warrants will not be adjusted for issuances of Class A ordinary shares at a price below
its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.
The private
warrants are identical to the public warrants with the exercise price of US$
11.5
per full share and expiration by
February
4, 2024
, except that the private warrants and the Class A ordinary shares issuable upon the exercise of the private warrants will not
be transferable, assignable or salable until after the completion of the SPAC Transaction, subject to certain limited exceptions. The
private warrants may only be exercised for a whole number of shares, meaning that the private warrants must be exercised in multiples
of two. Additionally, the private warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held
by the initial purchasers or their permitted transferees. If the private warrants are held by someone other than the initial purchasers
or their permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis
as the public warrants.
F-
43
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
15.
SHAREHOLDERS' EQUITY (CONTINUED)
A summary
of warrants activity for the year ended December 31, 2020, 2021 and 2022 is as follows:
Number of
warrants
Weighted
average life
Expiration
dates
Public warrants assumed from Wealthbridge's initial Public Offering on February 5, 2019
5,750,000
-
-
Private warrants assumed from Wealthbridge's private placement on February 5, 2019
270,000
-
-
Balance of warrants outstanding as of December 31, 2020
6,020,000
3.1
years
February 4, 2024
Additional warrants upon exercise of UPO
100,000
-
-
Exercised
(
96,300
)
-
-
Balance of warrants outstanding as of December 31, 2021
6,023,700
2.1
years
February 4, 2024
Balance of warrants outstanding as of December 31, 2022
6,023,700
1.1
years
February 4, 2024
Balance of warrants exercisable as of December 31, 2022
6,023,700
1.1
years
February 4, 2024
As of December
31, 2022, the Company had warrants exercisable for
3,011,850
Class A ordinary shares with weighted average life of
1.1
years
and expired on
February 4, 2024
.
Unit
Purchase Option
On February
8, 2019,
the Company sold to Chardan, for $100, an option to purchase up to 375,000 Units exercisable at $11.50 per Unit (or an aggregate
exercise price of $4,312,500) exercisable on the completion of the SPAC Transaction on May 7, 2020. On February 20, 2019, in connection
with the underwriters' election to exercise the over-allotment option in full, the Company issued Chardan an option to purchase
up to an additional 56,250 Units exercisable at $11.50 per Unit for no additional consideration. Each Unit consists of one ordinary share,
one redeemable warrant and one right (together "UPO"). The unit purchase option may be exercised for cash or on a cashless
basis, at the holder's option, and expires February 5, 2024. For the year ended December 31, 2021, 100,000 UPO have been exercised
for 110,000 shares. As of December 31, 2022, the Company had UPO units exercisable for 530,000 Class A ordinary shares with weighted average
life of 1.1 years and expiring on February 5, 2024.
Liability
Classified Warrants
All of the
Company's outstanding warrants contain a contingent cash payment feature and therefore were accounted for as a liability and are
adjusted to fair value at each balance sheet date. The change in fair value of the warrant liability is recorded as change in fair value
of warrant liabilities in the consolidated statements of operations and comprehensive loss (Note 2).
F-
44
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
15.
SHAREHOLDERS' EQUITY (CONTINUED)
The Company
accounted for the unit purchase option, inclusive of the receipt of $
100
cash payment, as an expense of the Initial Public Offering
resulting in a charge directly to shareholders' equity. The Company estimated the fair value of the unit purchase option is approximately
$
1,286,000
, or $
2.98
per Unit, using the Black-Scholes option-pricing model. The fair value of the unit purchase option granted to
the underwriters was estimated as of the date of grant using the following assumptions: (1) expected volatility of
35
%, (2) risk-free
interest rate of
2.44
% and (3) expected life of
five years
. The option and such units purchased pursuant to the option, as well
as the Class A ordinary shares underlying such units, the rights included in such units, the Class A ordinary shares that are issuable
for the rights included in such units, the warrants included in such units, and the shares underlying such warrants, have been deemed
compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA's NASDAQ Conduct Rules.
Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing
180-day period) following the date of Initial Public Offering except to any underwriter and selected dealer participating in the Initial
Public Offering and their bona fide officers or partners. The option grants to holders demand and "piggy back" rights for
periods of five and seven years, respectively, from the effective date of the registration statement with respect to the registration
under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees
and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves.
The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the
event of a stock dividend, or the Company's recapitalization, reorganization, merger or consolidation. However, the option will
not be adjusted for issuances of Class A ordinary shares at a price below its exercise price.
Shares
to be issued
As of December
31, 2020, the earn-out liability related to SPAC Earn-out Target 2020 and Beelive Earn-out Target 2020 were met.
As a result, there
was 3,540,960 earn-out shares required to be issued and the Company classified the related portion of earn-out liability in aggregated
of RMB200,100 as shares to be issued in the equity of the Company.
On March 25, 2021, the Company issued
3,540,960
Class A ordinary
shares for this achievement of earnout target.
As of December
31, 2021, the earn-out liability related to SPAC Earn-out Target 2021 and Beelive Earn-out Target 2021 were met.
As a result, there
was 3,540,960 earn-out shares required to be issued and the Company classified the related portion of earn-out liability in aggregated
of RMB128,119 as shares to be issued in the equity of the Company.
On June 2, 2022, the Company issued
3,240,960
Class A ordinary shares
and
300,000
Class B ordinary shares for this achievement of earnout target.
As of December
31, 2022, Beelive has achieved
93.87
% of the Beelive Earn-out Target 2022 and Weiliantong has achieved
100
% of Weiliantong Earn-out Target
2022.
As a result, there was 995,118 earn-out shares required to be issued and the Company classified the related portion of earn-out
liability in aggregated of RMB13,106 as shares to be issued in the equity of the Company.
Upon issuance of this report, a total of
507,804
(
540,960
*
93.87
%) has been issued to Cosmic Soar, the previous shareholder of Beelieve and a total of
487,314
share has been issue to
Wolter Global, the previous shareholder of Weilingtong. In addition, in connection with the acquisition of Weiliantong (Note 4), the Company
is required to issue
636,691
Class A shares to Weilaijin (equivalent to RMB
20.8
million) after received exercise notice.
Shares
issued for service
On November
18, 2022, the Company issued
61,500
Class A ordinary shares for directors as part of compensations.
2021
Equity Incentive Plan
On August
3, 2021, the Employee Share Option Committee (the "ESOP Committee") of the Company approved a resolution which appointed the
Chief Executive Officer and Chief Operating Officer as Authorized Officer of ESOP Committee. In 2021, the ESOP Committee approved the
granting of
2,053,783
Restricted Share Units ("RSU") under the 2021 Equity Incentive Plan. As of December 31, 2021,
2,053,783
RSUs were issued and outstanding.
72,713
RSU was forfeited and
1,264,114
RSU was vested during the year ended December 31, 2022. As of
December 31, 2022, the Company had
716,956
RSU outstanding.
F-
45
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
16.
STATUTORY RESERVES AND RESTRICTED NET ASSETS
The Company's
ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory
laws and regulations permit payments of dividends by the Company's PRC subsidiaries only out of their retained earnings, if any,
as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial
statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company's
subsidiaries.
In accordance
with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company's PRC subsidiaries,
a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the
enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise's
PRC statutory accounts. A foreign-invested enterprise is required to allocate at least
10
% of its annual after-tax profit to the
general reserve until such reserve has reached
50
% of its respective registered capital based on the enterprise's PRC statutory
accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors
for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as
cash dividends. WXBJ was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on
distributable profits. As of December 31, 2021 and 2022, the Company had appointed RMB
31,775
and RMB
39,208
(US$
5,685
), respectively
in its statutory reserves.
Foreign
exchange and other regulations in the PRC may further restrict the Company's VIE from transferring funds to the Company in the form
of dividends, loans and advances. Amounts restricted include paid-in capital, additional paid-in capital and statutory reserves of the
Company's PRC Subsidiaries and the equity of VIE, as determined pursuant to PRC generally accepted accounting principles. As of
December 31, 2021 and 2022, restricted net assets of the Company's PRC subsidiaries and VIE were RMB
240,092
and RMB
394,521
(US$
57,200
).
17.
COMMITMENTS AND CONTINGENCIES
(a)
Capital and Other Commitments
The Company
did not have significant capital and other commitments as of December 31, 2021 and 2022.
(b)
Contingencies
From time
to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well
as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be
material to the consolidated financial statements.
18.
SUBSEQUENT EVENTS
The Company
evaluated all events and transactions that occurred after December 31, 2022 up through the date the Company issued these consolidated
financial statements on April 28, 2023, for disclosure or recognition in the consolidated financial statements of the Company as appropriate.
19.
C
ONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
The Company
performed a test on the restricted net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation
S-X Rule 4-08 (3), "General Notes to Financial Statements" and concluded that it was applicable for the Company to disclose
the financial statements for the parent company.
The subsidiary
did not pay any dividend to the Company for the years presented. For the purpose of presenting parent only financial information, the
Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed
balance sheets of the Company as "Investment in subsidiary" and the income of the subsidiary is presented as "share
of income of subsidiary". Certain information and footnote disclosures generally included in financial statements prepared in accordance
with U.S. GAAP have been condensed and omitted.
The Company
did not have other commitments or guarantees as of December 31, 2021 and 2022.
F-
46
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
19.
C
ONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
(CONTINUED)
PARENT
COMPANY BALANCE SHEETS
As of December 31,
2021
2022
2022
RMB
RMB
USD
ASSETS
Current assets
Cash and cash equivalents
373
3,127
453
Prepaid expenses and other current assets
1,317
1,245
181
Amounts due from subsidiaries
25,995
(
7,759
)
(
1,125
)
Total current assets
27,685
(
3,387
)
(
491
)
Non-current assets
Investments in subsidiaries and consolidated VIE
805,136
1,170,235
169,668
TOTAL ASSETS
832,821
1,166,848
169,177
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accrued expenses and other current liabilities
2,414
1,752
254
Warrant liabilities
10,324
166
24
Current portion of contingent consideration – earn-out liability
10,638
4,336
629
Total current liabilities
23,376
6,254
907
Non-current liabilities
Total liabilities
23,376
6,254
907
Shareholders' equity
Ordinary share,
no
par value, unlimited Class A ordinary shares and
Class B ordinary shares authorized,
28,219,583
Class A ordinary shares and
2,625,058
Class B ordinary shares issued and outstanding as
of December 31, 2021, respectively.
36,684,668
Class A ordinary shares and
2,925,058
Class B ordinary shares issued and outstanding as
of December 31, 2022, respectively
Class A ordinary shares
140,196
396,880
57,542
Class B ordinary shares
13,041
23,896
3,465
Treasury stocks
-
(
16,482
)
(
2,390
)
Shares to be issued
128,119
33,923
4,918
Statutory reserves
31,775
39,208
5,685
Retained earnings
479,199
665,099
96,430
Accumulated other comprehensive income
17,115
18,070
2,620
Total shareholder's equity
809,445
1,160,594
168,270
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
832,821
1,166,848
169,177
F-
47
SCIENJOY HOLDING CORPORATION
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in thousands,
except share and per share data or otherwise stated)
19.
C
ONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
(CONTINUED)
PARENT
COMPANY STATEMENT OF INCOME
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Equity income of subsidiaries
184,869
267,436
198,340
28,757
General administrative expense and others
1,395
33,473
(
21,377
)
(
3,099
)
Research and development expenses
-
13,946
(
6,522
)
(
946
)
Change in fair value of warrant liabilities
3,904
16,421
10,776
1,562
Change in fair value of contingent consideration
(
14,068
)
33,584
13,071
1,895
Net income
176,100
170,012
194,288
28,169
Other comprehensive income - foreign currency translation adjustment
14,802
2,313
955
138
Comprehensive income attributable to the Company's shareholders
190,902
172,325
195,243
28,307
PARENT
COMPANY STATEMENT OF CASH FLOWS
For the years ended December 31,
2020
2021
2022
2022
RMB
RMB
RMB
USD
Cash flows from operating activities
Net income
176,100
170,012
194,288
28,169
Equity in earning of subsidiaries
(
184,869
)
(
267,436
)
(
198,340
)
(
28,757
)
Change in fair value of warrant liabilities
(
3,904
)
16,421
(
10,776
)
(
1,562
)
Change in fair value of contingent consideration
14,068
33,584
(
13,071
)
(
1,895
)
Share Based Compensation
-
31,857
11,954
1,733
Changes in operating assets and liabilities
Prepaid expense and other current assets
(
392
)
(
925
)
72
10
Accrued expenses and other current liabilities
-
2,414
(
662
)
(
96
)
Net cash provided by (used in) operating activities
1,003
(
14,073
)
(
16,535
)
(
2,398
)
Cash flows from financing activities
Due to related parties
(
26,590
)
14,263
35,771
5,186
Net cash acquired in the reverse recapitalization
32,659
-
(
16,482
)
(
2,390
)
Payment of listing costs
(
6,924
)
-
-
-
Net cash provided by (used in) financing activities
(
855
)
14,263
19,289
2,796
Net increase in cash and cash equivalents
148
190
2,754
399
Cash and cash equivalents at beginning of the year
35
183
373
54
Cash and cash equivalents at end of the year
183
373
3,127
453
F-
48